Billionaires Are People, Too!

Last January, the Wall Street Journal published a spectacularly hyperbolic letter. Written by billionaire venture capitalist Tom Perkins, it likened today’s “rich” to Jewish Germans living in the shadow of the Nazis, defended novelist Danielle Steel (Perkins’ ex-wife) against allegations of snobbery, and warned of “a rising tide of hatred of the successful one percent” that is bound to culminate in a “progressive” Kristallnacht. As this fretful piece made the rounds, it was ridiculedpartially recantedawkwardly defended, and, as is par for the course, made worse in the retelling.

Perkins, who is also the author of Sex and the Single Zillionaire—surely an inspiration to E. L. James if ever there was one—may seem like something of a nut. Whether he is or he isn’t, I can’t say. (I’m not that kind of a psychologist.) But I am reasonably confident that his knee-jerk moralism is actually garden-variety stuff. Were I in the same luxury yacht as Perkins, I suspect that I might feel similarly beset by the “unsuccessful progressives” out there.

That, at least, is the message from a growing body of work on motivated reasoning. The idea, according to Jonathan Haidt, is that we first intuit a position (triggered by whatever motives happen to be salient) and thereafter use reason to circle the wagons around it. Reason does not elevate us above our motives; it serves them instead.

The evidence makes this troubling claim hard to reject. For instance, Haidt and his colleagues have given research participants fictitious stories about a pair of opposite-sex siblings voluntarily having sex in which (1) they use contraception, (2) find the experience rewarding, and (3) agree never to do it again. When presented with these scenarios, most participants claim that the siblings’ behavior was immoral but cannot explain why—recall that no one was harmed, physically or emotionally, and no inbreeding was possible. Moreover, when experimenters hypnotized participants to find either the word “often” or “take” briefly disgusting, the participants reacted more strongly to morally ambiguous scenarios containing the trigger word than to scenarios containing the other word. And when presented with data that contradict our positions, the most reasonable among us turn out to be the most vulnerable to the pernicious influence of motive.

So, we can’t really be surprised when those who benefit from massive inequality contort themselves like so many moral gymnasts to defend it. Take this gem, for example:

Looking back to Perkins, then, it seems natural that a hard-done-by magnate’s language is peppered with intimations of entitlement (“the successful one percent”, the “job creators”) and accusations of persecution (“fascist Nazi Germany”, “demonize the rich”). These sentiments undoubtedly reveal true feelings of entitlement: I earned my income. I worked for it. I deserve to be rich.

So it follows that people may develop a sense of entitlement even when there’s absolutely no justification for it. Indeed, the study by Pat Barclay and Stephen Benard that I described in my last post shows exactly this: merely occupying a position of power can foster a psychology of privilege.

Recall that Barclay and Benard had research participants play a cooperative game where contributions to the group fund helped others. This help came at a personal cost and anything a player withheld from his group simply lined his own pockets. The twist in the study was that one person in each group was randomly assigned to start off with more money than others. Hence, inequality was built right into the game, but it was the consequence of luck, not skill: high-ranking players did not earn their position—it was handed to them. Yet, two findings (that I didn’t mention in my previous post) show that these players acted as if they were entitled to plunder all the same.

First, high-ranking players contributed proportionately less of their endowments to the group than did low-ranking players, something that works just like a regressive taxation system. Second, in a variant of the game where the high-ranking players could choose how to divvy up the group fund in any way they wished, these players took 57% for themselves—the lion’s share of the fund—despite having only contributed 37% of the group fund. This is rent-seeking, plain and simple.

The high-ranking players in Barclay and Benard’s study couldn’t logically argue that they were entitled to contribute proportionately less or take proportionately more than the low-ranking ones because they “earned” their positions or were “job creators”. Both claims are demonstrably false, as participants were randomly assigned to make more money than their counterparts and their contributions had no more impact, dollar for dollar, on the group than anyone else’s.

These were ordinary people—well, as ordinary as university students get. They were not corporate executives who could excuse their behavior by leaning on their years of experience clawing their way to the top. Nevertheless, they behaved just like plutocrats. No doubt they would find a way to justify their behavior if they had to.

All of this paints a disturbing portrait of human nature, but it is one we need to appreciate. We have a moral psychology that evolved to protect our interests, not to seek out the truth. This makes the world a more complicated, but also more nuanced, place. Under different circumstances, a poorer Perkins could have been the very sort of “progressive” that he currently derides and I could have been the sort of fat cat who thinks I earned my keep through grit and genius rather than a very long line of lucky breaks.

We’re not so different, billionaire and I.