As a ranting leftist, I have a little economic news to impart to you. It seems that what people like me have been saying for a long time is backed up by economic data: both the private views of the rich and the public views of the mainstream are driven by the self-interest of the power elite. Who that is allowed on network television would ever have imagined?
Last week I saw a segment on The Young Turks, What Changes When You Win The Lottery. It was about an article by Andrew Oswald and Nattavudh Powdthavee, Money Makes People Right-Wing and Inegalitarian. As I’ve written about here, in general, the rich are conservative and the poor are liberal. So these researchers looked at why that is, “Rich people typically lean right politically. Are they motivated by deeply moral views or self-interest? This column argues that money makes you right-wing. It shows that lottery winners in the UK are more likely to switch their allegiance from left to right.”
Their conclusions are disappointing but hardly surprising. One can imagine someone like Daymond John (founder of FUBU) thinking that he made it on his own so anyone could and thus his being a conservative. That would be how humans acted if they were morally rational. But it seems what really drives us is our sense of self-justification. And I get that. We all want to think that the bad things that have happened in our lives are the result of bad luck, and the good things that have happened are the result of our own brilliance. But it is sad that we generalize about this to others, and use it to justify high levels of income inequality just because it makes us feel better. As the authors conclude, “Voting choices are made out of self-interest and then come to be embroidered in the mind with a form of moral rhetoric.”
Paul Krugman discussed this study today along with another paper that discusses a different aspect of inequality. The paper by two IMF scholars, Davide Furceri and Prakash Loungani, is, Who Let the Gini Out? Searching for Sources of Inequality. They find that the standard neoliberal economic policies actually make income inequality worse. The two issues they look at are austerity (which lowers employment rates) and increased capital flows (which allows companies to move operations away to cheaper countries).
These two studies do not bode well for the world. It means that mostly the rich are trapped in thinking that high levels of income inequality are good simply because it is good for them. Related to this is that the neoliberal policies that almost everyone who is given a voice in the economic debate accept as God given. In fact, it is quite common for economic reporters to scoff at anyone who argues that “free” trade agreements might not be so great.
Krugman puts it exactly the way I would, so I will leave the conclusion to him:
