Dan Ariely on Our Ideas About the Distribution of Wealth

Tuesday, April 26, 2011

Behavioral economist Dan Ariely talks about the study “Building a Better America—One Wealth Quintile at a Time,” conducted together with Harvard Business School professor Michael Norton, and what it reveals about Americans’ ideas about the distribution of wealth in this country.


Dan Ariely

Comments [19]

Vane Lashua from 12508

Xue Shen / Hongbo Zhao ice skaters
athleticism, grace, strength of character

Jul. 12 2011 11:58 AM
Gerald Fnord from Palos Verdes, Ca

Anyone who believes in property rights, likes their liberty, and further that human beings tend to work in their own self-interests, should support a more equitable society.

Simply put, if there aren't enough people with enough property that they benefit from the government's protecting property (that is to say, far above the limits of accumulation in the state of Nature), their backing of property rights will be at best one based on moral principle, and those tend to erode in our more-sceptical age as they begin to seem more like tricks used to keep people down.

Without the support of enough people, the government will eventually have to become incredibly punitive to protect rights that the majority will see as doing nothing for them.

Jul. 04 2011 10:48 AM

this was great!

Apr. 27 2011 08:28 AM

for Hugh Sansom: read "Why do Republicans vote against their own interests" a great article!

Apr. 26 2011 04:21 PM
Jane from Millstone Twp, NJ

The segment was really interesting.
I think that the anger in the comments proves Dan Ariely's point. Feelings and expections regarding taxes and equality are complex. Despite the desire for equality and the patriotic attachment to these ideals - the self interested impulses run counter to these ends. I think what was most fascinating was the incorrect perception of American wealth. Who is going to help or advocate for the lower 40% (who only hold .03% of the wealth?!

Apr. 26 2011 02:42 PM

@ Gary.
Bee Ess. I earned less than $50,000.00 and paid more than $5,000.00 in federal income tax. And yes, I know that FICA is different from income tax.

Apr. 26 2011 02:17 PM
resident alien from Brooklyn

i completely agree with mr ariely!
(love his book, too)
after having lived in the us for 19 years (spending my first 30 years in Germany), i just want to add 3 observations:

1. the rules (tax & otherwise) here are way too complicated and seem to be designed with loopholes in mind &/or just to keep all the lawyers civilized democracy needs that many lawyers, seriously! if the US would switch to a "written law" (i.e. with hyperlinks) even laymen could do the first 90% of the work by themselves. less cost for everyone.
also, the jury system should be reversed!
the verdict should be made by the professionals. a smaller group of citizen "peers" should oversee due process.
juries can be duped more easily than professionals! (yes, i watched the first oj simpson trial)

2. as long as politicians (mostly lawyers!) desperately rely on donations, mostly by the rich & special interest groups & their lobbyists, nothing will change. the US need a serious campaign finance reform! (in Germany, parties who get into the parliament = who get more than 5% of the vote, get (partially) reimbursed for their campaign expenses).

3. while there is an awful lot to be proud of, with the US being one the world's oldest democracies, it's also getting very long in the tooth. the current two party model, where the winner takes it all and all the other votes are disregarded, even if they are as high as 49,99% is not really democratic, i.e. if you consider all the manipulative redistricting & gerrymandering...
again, nothing will change until there is not put a system into place that will not make it virtually impossible for a 3rd or 4rth party to participate in government...

and you thought healthcare reform was difficult! ;-)
actually, i would love to hear mr. ariely's take on this, too. i'm sure, an accomplished economist could come up with some better solutions...
it's not like re-inventing the wheel.

Apr. 26 2011 01:28 PM
gene from NYC

For a decade or more, Nobel Prizes in Economics were given to economists who often pointedly ignored any relation whatsoever between economics and emotions.

I liked what Noel Prize winner in chemistry Dr. Peter Agre said when Steven Colbert asked him the provocative, "Do they give a Nobel Prize for throwing your own feces?"

He was taken aback, thought for a second, then said, "That’s the economics prize, I think."

Apr. 26 2011 12:58 PM
Ken from Brooklyn

Hey Gary @ Upper Left Side you are flat wrong. People making less than 50,000 a year still pay tax because I did.

You are confusing working people with corporations like GE. Last year GE made 14.5 billion dollars and paid no corporate taxes.

Spreading lies will not help our society address inequality.

Apr. 26 2011 12:48 PM
Ken from Brooklyn

I think another issue that helps paints taxes in a negative light is that in the US when you go to the register to pay for goods the price is not what is marked on the tag.

For example instead of a shirt being $19.99 it ends up being $21.58 or more. So now it feels as though the "state" is reaching into our pockets and stealing from us.

Most other countries show the percentage of taxes on the receipt but it is already included on the tag when the consumer is still in the midst of deciding on the purchase. It is included not an after thought seemingly cloaked in mystery.

I think the psychological effects of this are grossly under estimated and only serve to compound negative feelings on our societal responsibilities.

Apr. 26 2011 12:41 PM
Sheldon from Brooklyn

Should "rich" people pay more taxes? Probably. But, if Mr. Ariely thinks raising taxes will magically reduce inequality as opposed to simply enabling the State to spend for the sake of spending, he is rather naive.

Apr. 26 2011 12:30 PM
jgarbuz from Queens

In the US, the average person pays about 43% of what they earn in taxes to government. In Israel, it's about 56%. In Sweden it was about 59%.

But the US was created as a tax revolt. However, even in Jesus's time, tax collectors in Judea were hated and unpopular. However, Jesus said, "Render unto Caesar what is Caesar's." So there are different ideas about taxation.

Apr. 26 2011 12:29 PM
Sam Tresler from Brooklyn, NY

There is a cognitive disconnect regarding what the wealthy are paying higher tax for. We like to take the immediate context that the tax from the wealthy pays for the social programs of the poor.

This fails to account for the time factor. If we believe in the American Dream and social mobility we need to assume that the rich weren't always rich, nor will they necessarily always be so. So, are they paying for poor people now, or their grandparents in the Civil Conservation Corps, or their grandchildren on welfare?

The notion that we aren't a society of whole cloth is absurd.

Apr. 26 2011 12:27 PM

Americans allow lower taxes for the wealthy because we all believe in AMERICAN DREAM --- that one day we will become RICH.

Apr. 26 2011 12:27 PM
DarkSymbolist from NYC!

@ Gary

Well I have earned below $50,000 before and I know for a FACT that statement is inaccurate...because I had to pay taxes!!!

Apr. 26 2011 12:27 PM
Hugh Sansom

Note that Dan Ariely just described a student displaying remarkable ignorance -- a student at MIT, one of the most elite of elite universities, where students are supposedly geniuses.

Does this indicate that the "elite" students are just as dim (or dimmer) than the rest of us. Or does it mean that our "elite" schools are diploma mills for the brainwashed money-grubbers?

Apr. 26 2011 12:26 PM
Gary from Upper Left Side

One thing Dan Ariely and other left-wing economists fail to mention is that those making less than $50,000 in the U.S. pay ABSOLUTELY NO income tax at all, after all of the deductions and credits are accounted for!

(Note: Income tax is different from FICA tax.)

Apr. 26 2011 12:20 PM
jgarbuz from Queens

Historically, going back even thousands of years, the more trade that exists, the more income disparity grows. This is because capital is mobile whereas labor is static. Capital can move everywhere to get the greatest returns, whereas labor cannot migrate as readily as capital can move. Thus, owners of capital can take advantage of opportunities abroad, whereas laborers generally cannot.

But the Bible states, "Do not covet" that which is your neighbors. IT also calls on the wealthy to be charitable towards the poor.

Apr. 26 2011 12:12 PM
Fuva from Harlem

We must anatomize economic wealth in this country, then socialize this information throughout the citizenry.

WHO is making the money
It's myriad, ripple BENEFITS

This way, debates like the current deficit/ tax farce can at least be somewhat informed.

Apr. 26 2011 10:54 AM

Leave a Comment

Email addresses are required but never displayed.

Get the WNYC Morning Brief in your inbox.
We'll send you our top 5 stories every day, plus breaking news and weather.