Heard something pretty interesting on NPR a couple days ago. The link to the NPR article http://www.npr.org/2011/04/16/135472478/study-americas-wealth-not-widely-distributed The link to the studay http://www.people.hbs.edu/mnorton/norton%20ariely%20in%20press.pdf One percent of the U.S. population owns approximately 40 percent of the nation's wealth. That's a distribution that most Americans don't know about, Dan Ariely of Duke University discovered in a recent study. Respondents of all demographic categories mistook Sweden's even wealth distribution for that of the United States. Host Noah Adams speaks with Ariely about his study. Copyright © 2011 National Public Radio®. For personal, noncommercial use only. See Terms of Use. For other uses, prior permission required. (Soundbite of educational film reel) Unidentified Man: In order to have a proper appreciation of the American economic system, we must know how the national income is divided in America. NOAH ADAMS, host: What you're listening to now is an educational film reel from back in 1955, the waning days of McCarthyism, on wealth in America. (Soundbite of educational film reel) Unidentified Man: Is the distribution widespread? Or is the wealth of America concentrated in the hands of a few, as the socialists and communists say? ADAMS: Well, as you might imagine, the statistics offered here give a rosy view of the strength of the middle class and the relatively small percentage of wealth wielded by the super-rich. (Soundbite of educational film reel) Unidentified Man: Mary, what can be learned from this graph? MARY: It seems that our national wealth is very widely distributed. ADAMS: Well, not so fast, Mary. According to many estimates, just 1 percent of the U.S. population takes home almost a quarter of the nation's income, and 40 percent of its wealth. And Dan Ariely is surprised that most people don't know that. Dan's a behavioral economist with Duke University. He recently authored a study with Harvard's Michael Norton about America's knowledge of its own wealth distribution and joins us now from his home in Durham, North Carolina. Welcome, Dan. Professor DAN ARIELY (Behavioral Economics, Duke University): My pleasure. ADAMS: What were you going after with this study? What did you want to find out? Prof. ARIELY: So the first question we're interested is what do people think is the wealth distribution in the U.S. And we basically asked them to say how much do you think of the wealth is owned by the top 20 percent, the next 20, the next 20. And what we found was that people dramatically underestimated how much wealth the wealthy have, but also dramatically overestimated how much money the poor have. And the second question we're interested in was if you gave people the right to design the distribution of wealth in the U.S., how would it look like? You know, we often think about distribution of wealth in the question of efficiency, of the economy and what will motivate people. And we wanted to just ask if you just gave people the right to say, what would you think is a just society, how would people draw that distribution. ADAMS: Now, you showed people three pie charts, I understand. And those charts showed the distribution of income in different countries. But you didn't give it away. You didn't tell them which countries they were looking at. Prof. ARIELY: That's right. So - and we actually have a very equal distribution, which doesn't exist anywhere. We had the distribution of the U.S., and then we had a distribution that was based on Sweden, but we actually made it even more equal than Sweden itself. And we say, which of those would you like to live in? ADAMS: Americans, you found, prefer Sweden the way it looked in that pie chart. Prof. ARIELY: Yes. So 92 percent of Americans prefer the distribution of the U.S. that is much more equal than what we have right now. But perhaps the most interesting and also most optimistic part of the study was that when we broke the sample by Republicans and Democrats, there were differences there, but they were actually quite small. So, for example, if the average was 92 percent prefer the Swedish distribution; for Democrats, it was 93 percent; and for Republicans, it was 90.5 percent. So there's a difference. But it seems to me that when we go kind of underline and we ask people about the true ideology, Americans are much more equal than we think and the differences between the different parties are smaller than we think. ADAMS: Well, what about income levels of the people who were responding, looking at these pie charts, what would low-income people see and what would rich people see? Prof. ARIELY: Similar to the Republicans and Democrats, there were differences. The wealthy basically wanted slightly more unequal distribution. The poor wanted slightly more equal distribution. But the fact is that the differences between them were, again, very, very small. ADAMS: I've heard this speculated that if you're low income, you don't mind the wealthy people making a lot of money, having a big chunk of that pie because you're going to get there someday. Prof. ARIELY: Yeah. So this is something that we're looking at right now, which is the question of what happens if people believe in social mobility, and we do find evidence for that. The truth is that the social mobility in the U.S. is not that high. And so there's a question of what people believe is a social mobility and what does social mobility really is. And if people believe that social mobility is actually much higher than it really is, maybe this is what's allowing people to be much more tolerant to this income inequality without there actually being basis for it. ADAMS: After you look at all those data, is there a mystery remaining in your mind, something you can't figure out about it? Prof. ARIELY: Yeah. So the thing that puzzles me the most after all of this is that the aversion that people have to the word taxes. So if you look at it, there are, basically, a few ways to change the distribution of inequality of wealth, taxes is one of them. But the moment in the U.S. that you mention the word taxes, people have an incredibly aversive reaction. And that's something I'm kind of battling with. Where did this aversion to the word taxes come from? I don't yet understand and I hope to understand better. ADAMS: That's Dan Ariely, a behavioral economist with Duke University, author of the book "Predictably Irrational." Thank you very much, sir. Prof. ARIELY: My pleasure. Copyright © 2011 National Public Radio®. All rights reserved. No quotes from the materials contained herein may be used in any media without attribution to National Public Radio. This transcript is provided for personal, noncommercial use only, pursuant to our Terms of Use. Any other use requires NPR's prior permission. Visit our permissions page for further information. NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR's programming is the audio.
See: http://sociology.ucsc.edu/whorulesamerica/power/wealth.html One of the best reads ever. Even scrolling through and just looking at the graphs and tables really show how screwed up things are. I think, left or right, this problem the ONLY thing we should be concerned about. I don't see how anyone can defend the current wealth distribution regardless of political ideology.
two things, the subject should be "people think wealth is evenly distributed" and you posted the transcript twice, please go back and edit the point isn't that wealth isn't distributed equally, the point is people think it it is, and they believe it should be. but the bigger point is the former, that people have no idea how much wealth the top percentage of the country hold.
Sorry about the double copy. Republicans have done a really good job to misinform the people in this country on many economical issues and make these uninformed voters vote against their economical self interest on many issues.
If you are not within the top 25%, you can pretty much forget about wealth distribution. Wealth is distributed upward, the more distribution there is, the more the top 1% get.
No, but you don't see this thread at 10 pages while threads about gay rights, abortion, birther, etc threads are blowing up.
in fairness to the disparity that has been built up over the last 20 years, part of it is due to the stock market explosion in the nineties. the wealthy have a lot of their income derived from the stock market which has had an incredible amount of growth.
What caused this explosion? Trickle down? Hell no. The rich "investing" in the economy is nothing compared to the Low and Middle Classes busting their ass to have their company's stock go up but see no equal returns for their blood spilt.
By wealth is distributed upwards, you mean that people who buy things give money to people who own things in exchange for goods and services, right? It isn't like the government is taking money from the poor and giving it to the rich, quite the opposite in fact. It just doesn't do it so fast that it counteracts the normal process of capitalism.
that's not fair. the companies that did well particularly tech companies shared wealth. i have a cool story bro about this when i was still in college i was a floating teller for Comerica Bank. this meant i worked at different locations around town where help was needed. Commerica had (i don't know if it still has) a branch in the BMC building particularly for employees I worked their two weeks, but the first friday i was there happened to be bonus day, and this is in 98 and companies are still handing out checks. mid level managers were coming down with checks for quarterly bonuses in the range of $15K to $50K. no kidding, i'm not even gonna say what the ceo's check was because that's too much info but it was crazy. the branch had only one worker, i turned around when the ceo handed me his check and said, "look, i know these guys are getting bonuses but is this okay". she says to me, "oh, [my name], this is the ceo, so and so". it was crazy. back in the nineties when the employment rate was tight, all kinds of companies were giving away signing bonuses to kids fresh out of college. signing bonues, an unheard of concept today.
Well, hell. I got excited there for a minute. I guess I'll just have to continue to rely on myself to earn a living.
I you take everyone's money away, distribute $1M to every adult... What is the likelihood that the people that has money now, don't take it all back, and the people on welfare, stay off to the welfare line within 3 years?
If you tossed people a bunch of money they'd waste it buying clothes, getting tattoos, and other BS. Look at how the funds were spent by people impacted by Hurricane Katrina. People were using their FEMA cards to purchase worthless crap strolling around in the Galleria. Not a smart use of money. Also, arent the top wealth earners in that 1% also paying the top or majority percent of taxes? Where is that money going? Government waste. Our government acts and spends money just like those people with the FEMA cards, and those cards are paid for by our tax dollars.
