How Visible Inequality Erodes Communities

Poverty and inequality are bad enough on their own, but a recent Yale study published in Nature suggests that the mere visibility of income disparity can be socially and psychologically disruptive. As The Atlantic reported:

“Making wealth visible was a very corrosive force. It resulted in the rich exploiting the poor”, said Nicholas A. Christakis, the co-director of Yale Institute for Network Science and one of the senior authors of the study. When wealthy people find out that their neighbors don’t have the resources they do, researchers find, they’re less likely to help them, or anyone else …

… Researchers found that when rich subjects knew that their neighbors were less wealthy than they were, they became less likely to cooperate with them. The poor, however, chose to keep cooperating. This leads to what researchers call an exploitation scenario, in which the poor keep lowering their own wealth to invest in their local network, “making them worse off relative to their neighbors and allowing the rich to get richer”, the researchers write.

When rich subjects don’t know the wealth of their neighbors, though, they are more likely to cooperate than are poorer subjects. This leads to what researchers call a “fairness” scenario, in which the rich invest their wealth into a local network, which then grows richer as a whole.

Overall, visible poverty reduces overall cooperation, interconnectedness, and wealth. But inequality itself has “relatively little” impact on cooperation or interconnectedness. “Most people thinking about inequality today may be confusing two distinct phenomenon”, Christakis told me.

This might explain why famously egalitarian societies like Sweden and Japan tend to report higher than normal levels of social cohesion: not only is income broadly distributed, but any disparity that exists is plastered over through public policy and communitarian values. Broad access to education, healthcare, and quality housing means that the material markers of poverty are absent. There are also cultural taboos against the ostentatious displays of wealth and conspicuous consumption that are common in the U.S. and elsewhere. No doubt these factors make cooperation and social trust a lot easier, as people do not feel worlds apart despite what their actual incomes and lifestyles might be.

As for any public policy implications, there does not seem to be much that can be done.

The researchers suggest that concealing personal-wealth information might lead to lower income inequality. But it seems that allowing the rich to hide their wealth wouldn’t be effective unless the rich also had no way of knowing how poor others are. That’s unlikely since wealth and poverty marks everyone, in the clothes they wear, in the places they live, and how they get around. Short of requiring everyone to wear brown-paper sacks, live side-by-side in similar houses, and drive around in similar cars, there’s likely no way to disguise wealth and poverty in America today. The visibility of inequality may matter more than inequality itself, but no matter where you go, the discrepancy has a way of making itself known.

Though unmentioned in either the study or the article, I think a much bigger takeaway from the results is how greater wealth seems to have a corrosive effect on an individual’s morals and social disposition. The fact that having more money makes someone less inclined to cooperate with anyone beneath their station may explain why so many of the world’s rich continue to hoard trillions while much of humanity starves, or why they support public policies that neglect or hurt the poor. This psychological and political divide has been well documented elsewhere, and may be accounted for by the age-old observation that power, via great wealth, is a corrupting force.

Of course, none of this is to suggest that all rich people are nasty, callous, and selfish. But as a class there does seem to be a prevailing pattern of asocial behavior, visible in everything from corporate policy (business owners and executives sitting on billions of dollar of millions of people struggle) to political influence (gutting public funding and welfare while advocating for policies that enhance their own wealth). The old truism about money being the root of all evil entails this sort of dehumanization and disconnect from the needs of society, from the local to the global level.

What are your thoughts?

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