Welcome to DU! The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards. Join the community: Create a free account Support DU (and get rid of ads!): Become a Star Member Latest Breaking News Editorials & Other Articles General Discussion The DU Lounge All Forums Issue Forums Culture Forums Alliance Forums Region Forums Support Forums Help & Search

Ichingcarpenter

(36,988 posts)
Wed Mar 11, 2015, 03:42 AM Mar 2015

Inequality sustains itself by generating an ideology which favours the rich. This might sound like c

Inequality sustains itself by generating an ideology which favours the rich. This might sound like classic Marxism - which it is. But it is also orthodox social science, as a new paper from the NBER shows (ungated pdf).




Jimmy Charitie, Raymond Fisman and Ilyana Kuziemko ran a simple experiment. They randomly gave $5 and $15 to two people and then asked others whether they wanted to redistribute the money between those two people. On average, subjects voted to close 94% of the $10 gap. However, when subjects were told that the two people already knew whether they were getting $5 or $15, they closed only 77% of the gap.

This suggests that preferences for redistribution depend upon reference points. In the first experiment, the reference point is an equal allocation. In the second, however, there's another possible reference point - people's expectations. Such expectations reduce demand for equality.

The effect here is big. The experimenters also allocated the $5 or $15 according to scores on a SAT and then asked people to redistribute. On average, they closed 56% of the difference. This tells us that the effect of tweaking reference points on people's tastes for equality is equal to about half the effect of the difference between random allocations and merit-based ones. I reckon this is quite a lot.


http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2015/03/tolerating-inequality.html
1 replies = new reply since forum marked as read
Highlight: NoneDon't highlight anything 5 newestHighlight 5 most recent replies
Inequality sustains itself by generating an ideology which favours the rich. This might sound like c (Original Post) Ichingcarpenter Mar 2015 OP
Thanks! eom rogerashton Mar 2015 #1
Latest Discussions»Retired Forums»Socialist Progressives»Inequality sustains itsel...