Friday, November 7, 2008

Closing the Gap

Russ Roberts’ latest EconTalk (the best podcast on the webs) is an interview with Richard Epstein about happiness, inequality, and envy. It’s a great listen, and it gave me some insight. I had read some of the research on happiness and have seen that happiness is correlated more with relative wealth (how much more your less you have than others around you) than it does with how much wealth you have at all. Epstein brought up something that I hadn’t considered before, even though it’s very obvious. Happiness correlates with inequality in everything, not just wealth. Physical appearance, athletic ability, intelligence, power, whatever.

This leads naturally to happiness actually being a function of status. I’m sure that there’s an evolutionary basis in there somewhere worth studying, but right now I’m interested in the effects. Since people are less happy with bigger status gaps between themselves and others, they will be interested in closing that gap. There are two ways to close the gap: Either get some more of what you’re “missing” or remove some of what “they” have. If your neighbour has a nice car, you can either spend the effort to earn the money to buy one yourself or you can key his. It’s pretty obvious which one of these is the more moral option, but it’s also obvious which one is easier.

It’s preferable to have a society which encourages the first and discourages the second, otherwise we end up in Harrison Bergeron’s world. I’m afraid, though, that democracy tends to encourage the latter. Not strongly, not obviously, and not personally, but the process of voting on things that will effect your neighbour makes an easy process seem easier. Taxation, for example, isn’t just about getting money to help lift the poor, but it’s also about holding down the rich. In that regard the equivalent of keying your neighbour’s car because it’s nicer than yours.

Since there will always be more people with lower status than higher, democracy will tend to create a society which tries to pull down the rich rather than pull up the poor. Not all at once, but slowly and by degrees. Happiness and envy are very powerful motivations, and democracy makes it too easy to give in to envy to increase happiness.

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