TOPICS > Economy

Exploring the Psychology of Wealth, ‘Pernicious’ Effects of Economic Inequality

June 21, 2013 at 12:00 AM EDT
It's been said that money is the root of all evil. Does money make people more likely to lie, cheat and steal? Economics correspondent Paul Solman reports on new research from the University of California, Berkeley about how wealth and inequality affects us psychologically.
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JEFFREY BROWN: Last night the question, was can more money make you a happier person? Tonight, does the amount of wealth you have affect the kind of person you are?

NewsHour economics correspondent Paul Solman is at it again, part of his ongoing reporting on “Making Sen$e of Financial News.”

PAUL SOLMAN: In California, you’re supposed to stop for a pedestrian at a crosswalk. And, in a recent study, some 90 percent of drivers did, except for those driving luxury cars, like this BMW. They were almost as likely to run the intersection as wait for the person to cross the street.

PAUL PIFF, University of California, Berkeley: Drivers of those BMWs, those Porsches, those Mercedes were anywhere from three to four times more likely to break the law, than drivers of less expensive, low-status cars.

PAUL SOLMAN: In a country more and more polarized by inequality, UCal Berkeley’s Paul Piff led a series of startling studies showing an apparent link between wealth and, well, unseemly behavior.

WOMAN: Oh, by the way, there’s candy there. It’s actually for children for another study, but you’re welcome to take a few pieces if you want to.

WOMAN: Thank you.

PAUL SOLMAN: That’s the script an experimenter recited to every subject. And the results?

PAUL PIFF: Wealthier participants took two times as much candy from children as did poor participants.

PAUL SOLMAN: Another experiment tested honesty in reporting dice scores when cash was on the line.

PAUL PIFF: People all the way at the top who made $150,000 dollars, $200,000 dollars a year were actually cheating four times as much as someone all the way at the bottom who made under $15,000 dollars a year just to win credits for a $50 dollars cash prize.

PAUL SOLMAN: So, experimental evidence that rich people are more likely to break the law while driving, help themselves to candy meant for children, cheat in a game of chance, also to lie during negotiations and endorse unethical behavior, including stealing at work.

The academic paper that resulted made headlines everywhere, the Wall Street Journal article leading with the question, “Ready the Pitchforks?”

DACHER KELTNER, University of California, Berkeley: It is very clear that this study of social class touched a nerve.

PAUL SOLMAN: Psychology professor Dacher Keltner is Paul Piff’s boss and co-author.

DACHER KELTNER: We publish these studies in relatively obscure scientific journals, and literally the next day were getting hundreds of e-mails from around the world, and a lot quite hostile.

PAUL PIFF: I have gotten a lot of vitriol and hate mail from people calling me out for junk science and having a liberal agenda.

PAUL SOLMAN: Hey, but, wait, didn’t those who complained have a point: that the research was done at a famously, some might say infamously, liberal university?

Hey, they’re in Berkeley. What other results did you expect them to get?

PAUL PIFF: I regularly hear the Berkeley idiot scientist who’s finding what they expect to find. Let me tell you, we didn’t expect to find this. Our findings apply to both liberals and conservatives. It doesn’t matter who you are. If you’re wealthy, you’re more likely to show these patterns of results.

PAUL SOLMAN: Results consistent across 30 studies he’s run on thousands of people all over the United States. So, what is it about wealth that might make people behave differently?

What are we doing here?

PAUL PIFF: We’re playing a game of Monopoly that’s rigged.

PAUL SOLMAN: This game is typical of another kind of experiment Piff likes to run. Instead of studying actual rich people, Piff gets subjects to feel rich in the lab. The designated Monopoly moneybags starts with a few legs up, $2,000 dollars vs. the poor man’s $1,000 dollars, an upscale playing piece the Rolls vs. an old shoe, the right to toss two dice instead of just one.

Two. I have got snake eyes — meaning I, assigned the role of rich person, get an extra turn.

So, but I roll again, because I have got …

PAUL PIFF: Yes, because you rolled doubles.

PAUL SOLMAN: Doubles. Six. One, two, three, four, five, six, and that’s Tennessee Avenue, and, of course, I will buy that.

Meanwhile, poor Paul Piff.

PAUL PIFF: I only get to roll one die. And as it says here, when I pass go, I collect a lower salary. I collect $100 dollars.

PAUL SOLMAN: Here’s your one die.

PAUL PIFF: Great. Thanks so much. I can’t roll doubles. I don’t get opportunities to move very far along the board.

PAUL SOLMAN: Piff has run this experiment with hundreds of people on the Berkeley campus. The rich players are determined randomly by coin toss, the game rigged so they cannot lose. And yet, says Piff, despite their presumably liberal bent going in …

PAUL PIFF: When we asked them afterwards, how much do you feel like you deserved to win the game? The rich people felt entitled. They felt like they deserved to win the game. And that’s a really incredible insight into what the mind does to make sense of advantage or disadvantage.

PAUL SOLMAN: So, even though a subject like myself is just play-acting — you consistently find that I begin to attribute success to myself, even though it’s a coin flip that got me on this side of the board as opposed to that?

PAUL PIFF: You, like a real rich person, start to attribute success to your own individual skills and talents, and you become less attuned to all of the other things that contributed to you being in the position that you’re in.

MAN: How is the American dream achieved?

PAUL SOLMAN: Piff is part of a team, headed by Dacher Keltner, that studies the psychological effects of both absolute and relative poverty and wealth.

MAN: We can also ask, do people believe in this dream?

PAUL SOLMAN: What they’re studying is economic inequality, which, as our viewers probably know, is as high as it’s been in almost a century in this country.

DACHER KELTNER: There are new data coming out on a daily basis from top laboratories showing, no matter how you look at it, the effects of inequality are pernicious upon things like bullying on school playgrounds, the quality of your physical health, how you handle disease.

PAUL SOLMAN: What’s somewhat surprising, says Keltner, is that even the haves suffer.

DACHER KELTNER: One of the things that wealth and money does is it comes with a set of values, and if you want a deeper ideology, and one of them is, generosity is for suckers and greed is good. But it turns out, there are a lot of new data that show, if you’re generous, and charitable, and altruistic, you will live longer, you will feel more fulfilled, you will feel more expressive of who you are as a person. You probably will feel more control and freedom in your life.

PAUL SOLMAN: Of course, there are plenty of wildly generous rich folks. Just look at the growing list of billionaires who’ve pledged to give the bulk of their fortunes to charity.

And six. I got a doubles again.

But, statistically speaking, there’s a significant tendency to look out for number one if you’re at the top.

What do I got?

PAUL PIFF: Oh, you got a “get out of jail free” card.

PAUL SOLMAN: Oh, excellent. That’s very nice, although I could probably, given the fact that I’m the rich person, get bailed out.

PAUL PIFF: You could.

PAUL SOLMAN: And, as Piff observed when he ran this experiment with hundreds of doggedly friendly Berkeley types, those in the role of top dog began to bark like one.

And so I get $200 dollars for …

PAUL PIFF: Yes, you get $200 dollars.

PAUL SOLMAN: Well, give me $140 dollars because I’m going to buy Mediterranean.

PAUL PIFF: OK, done.

Now, listen to the way that you just spoke to me. It was very directive, almost like a demand. But we found consistently with people who were the rich players that they actually started to become, in their behavior, as if they were like rich people in real life. They were more likely to eat from a bowl of pretzels that we positioned off to the side. They ate with their mouths full, so they were a little ruder in their behavior to the other person.

PAUL SOLMAN: While I was thanking God no pretzels were present, Piff continued. Those arbitrarily assigned the role of low dog became more nearly man’s best friend.

PAUL PIFF: If I take someone who is rich and make them feel psychologically a little less well-off, they become way more generous, way more charitable, way more likely to offer help to another person.

PAUL SOLMAN: So, when people are playing this Monopoly game and they’re in the poor person role that you’re playing, they, if they were rich in real life, become more understanding, more compassionate?

PAUL PIFF: Not just in this game of Monopoly, but in a whole bunch of other experiments that we have run where we make rich people feel poor or poor people feel rich, you find the same kind of differences.

PAUL SOLMAN: Differences that could conceivably help people understand their subconscious biases and perhaps even moderate the costly effects of economic inequality. But, until that happens, we would suggest you look both ways before crossing.

RAY SUAREZ: We have more of Paul’s conversation with psychologist Dacher Keltner about how wealth influences generosity on our Making Sen$e page.