Home > #OWS, musing > Envy, greed, and the American Dream #OWS

Envy, greed, and the American Dream #OWS

April 11, 2014

I was sent this Falkenblog post entitled Why Envy Dominates Greed a while back (hat tip David Murrell). The post suggests an interesting thought experiment which I’d like to discuss this morning.

Namely, it asks us to examine the extent to which our economic assumption that “everyone is working in their own self-interest” can be replaced by the assumption that “everyone is working to improve their relative ranking” and whether you’d get more clarity from economics that way.

I’ve done myself the favor of ignoring everything author Eric Falkenstein actually says about the economic theory, because he’s focusing on investing in the stock market, which honestly only a minority of people ever do even once. Even so I’d like to consider this idea of envy versus greed and try to make sense of it.

First of all, I do think that a certain kind of relativity combined with proximity is deeply important to humans. When members of my Occupy group talk about living on $2 a day while sleeping at homeless shelters in New York City, surrounded by men in suits with chauffeurs, it is very relevant that the privations described are combined with with a deep sense of humiliation of their understanding of their relative position. These are highly intelligent people who know how things look and they feel it keenly.

Similarly, when I think about poor people in other countries, it’s a different level of destitution than we see here, and yet it doesn’t make me want to drop everything and work in India. There’s something about proximity that we all respond to, and which has been well examined by social scientists.

Going back to my New York friend: is that envy being displayed, exactly? I don’t think so. I think it’s something more like dispossession and despair. And it’s honestly something I believe our natures would rather avoid, but sometimes just slaps us in our face, especially in places like New York City.

I’m not throwing envy out altogether. In fact, I do think envy is strongly at work, but only at a local level. I am working at Columbia now, so it’s natural and proper that I am envious of my colleague’s slightly-larger office. I ignore the stuff I don’t see like how the trustees are chosen and treated. A person in a given town is envious of their neighbor’s house or car or job or wife, but they don’t think about what’s happening in a different neighborhood. In fact they might obsess over such things. It happens. But again, it’s local.

Evidence that people only think very locally about wealth and inequality is everywhere; so when people are polled and asked to describe income or wealth inequality, they always think it’s much less skewed than it is. Why? I’ll guess. It’s because they extrapolate from their very local experience, where there the outliers are not so very outlying at all. It’s a safe kind of assumption that doesn’t boil the blood.

So envy is there, it’s powerful, but it biases us enormously. If anything, I’m starting to think envy is something to distract us from something more dangerous, which is that sense of privation and dispossession, which runs deeper and is more anarchic. By contrast, envy seems like a myopic feeling that keeps us acting safely inside the system, where if we follow the rules but we’re a little bit better at them, we will get that bigger office or bigger car.

In the end, I reject envy as a unifying glue that describes our world, at least in times of severe inequality like now. It just doesn’t address the growing hostility that I’m sensing, which is that second kind of feeling, which exists beyond envy.

Moreover, I think the assumption that everyone is feeling something as small as envy, or rather the projection of envy onto the entire population, is damaging.

So, for example, there was an New York Times Op-Ed recently entitled Capitalize Workers! that suggested we get more people involved for saving for their retirement by investing in the stock market with “minimum pensions”.

I think the idea here is that everyone wants a piece of that amazing stock market return. But if you think about where people actually are financially, it’s such a weirdly out-of-touch plan, the idea that everyone is a Wall Street trader or wants to be.

For most people I meet and talk to, at this point retirement is not at all about the thrill of risk-taking, but rather the avoidance of risk altogether. If you asked those people, they’d rather just have their Social Security benefits doubled. They are not trying to take their chances to double their money, but rather trying to eke out a retirement without severe pain.

Why is this happening? Why are the authors of this piece, who both work at the think tank Third Way,  making such bizarre assumptions about how poor people want to retire? My first guess was that they are just working with the funds on Wall Street who would reap (even more) profits if more people invested.

But another less suspicious possibility is given by my above observation. Namely, they are projecting their myopic envy, that makes sense in their world, onto the poor and middle class worrying about retirement.

In their neighborhood, the way envy works is about trading and making big gains with extra money, but of course to do that you have to have extra money to start out with. In other words, the distance between the authors and the people they claim to be trying to help is too large for their system of envy to translate meaningfully.

 

Categories: #OWS, musing
  1. Guest2
    April 11, 2014 at 8:36 am

    Exactly right! This basic notion first emerged in conflict theory of sociology, and now serves as the basis of the new economic sociology.
    From Wikipedia:
    The contemporary period of economic sociology, also known as new economic sociology, was consolidated by the 1985 work of Mark Granovetter titled “Economic Action and Social Structure: The Problem of Embeddedness”.[2] These works elaborated the concept of embeddedness, which states that economic relations between individuals or firms take place within existing social relations (and are thus structured by these relations as well as the greater social structures of which those relations are a part).
    http://en.wikipedia.org/wiki/Economic_sociology
    Envy based on relative position in regard to others known to oneself is derived from embeddedness. The 1940s relative deprivation studies also point to how we construct social reality, and how that serves to motive us. Roger Gould has a book out on this, subtitled “How Ambiguity about Social Rank Breeds Conflict” (Collision of Wills, 2003).
    The insight into the essential positional value of status (and the envy it generates) is also in social network theory, and various approaches to social stratification and education. The applications are limitless.

  2. Michael L
    April 11, 2014 at 8:36 am

    Cathy,
    You might be interested in taking a look at Robert Frank’s (of Cornell University) work on positional externalities and expenditure cascades if you’re not already familiar with it. As I recall, he doesn’t use the term “envy” but has a lot to say about how people evaluate their socioeconomic standing by comparing themselves to others in their reference group. Such comparisons lead to a kind of “arms race” in spending which he calls expenditure cascades. He also argues that this entire process is driven to some extent by inequality, which is why I think you’ll find his work interesting even if you don’t ultimately agree with it. Here are two links which provide an overview of his perspective:
    http://www.brookings.edu/gs/events/externalities.pdf
    http://www.aeaweb.org/assa/2005/0108_1015_0601.pdf

    • April 11, 2014 at 9:51 am

      Was just about to mention Robert Frank! His book-format version of these ideas is “The Darwin Economy.” I really liked it.

      • April 11, 2014 at 10:50 am

        “The Darwin Economy” is excellent on these ideas. From an evolutionary perspective, the local level of envy (and all competition) is all that matters. If a lion is chasing us, it doesn’t matter whether or not I can outrun the lion – I can’t; it only matters that I can outrun my fellow humans.

    • Guest2
      April 11, 2014 at 1:03 pm

      Well, expenditure cascades are driven by uncertainty of status — for example, whose yacht is bigger? McMansions have the same underlying dynamic. This applied to CEO salaries, too.

      It is unlikely that inequalities drive expenditure cascades (i.e., “arms race”) for the same set of reasons that the unemployed don’t revolt.

      • Michael L
        April 11, 2014 at 2:05 pm

        A section of this paper:

        http://www.brookings.edu/gs/events/externalities.pdf

        by Frank spells out how he sees the relationship between inequality and expenditure cascades. I don’t know if he’s right but you can take a look (if you haven’t already) and decide for yourself.

        • Guest2
          April 11, 2014 at 8:27 pm

          Yes, this is what I was responding to.
          Anton Blok talks about this in Freud (!!) as “the narcissism of minor differences” (cf. Roger Gould’s idea, that status ambiguity potentiates conflict and violence). Interesting that BOTH scholars studied Sicilian violence, and found paradoxically that it is the small differences that lead to trouble. Gould’s advantage is that he situates this in the context of prevailing sociological theory.
          Rod Aya (1990) looks at why, typically, the unemployed, the homeless, and the downtrodden do not mount successful rebellions. The literature on this is enormous. Randall Collins limits himself to violence, in a book of the same name (2008).

        • Guest2
          April 14, 2014 at 4:35 pm

          I think Frank’s choice of example with housing is flawed — this was during the build-up to the housing bubble, and the expectation of easy, steady returns on investment is why people bought as high as they could, NOT because their kids would end up in a decent school district. The result was the bubble, which has yet to deflate.

          I also think that his choice of car-weight is flawed, although status competition plays a role in car purchases, as every car salesman knows.

  3. April 11, 2014 at 7:52 pm

    Good article which points out some very obvious facts. The majority of people I know have no wish for fame, glory or mega billions, just enough to get by and maybe the odd treat. The ability to look after ourselves and ours has always trumped envy of others.
    One emotion you have overlooked is anger. The bankers being bailed out for their mistakes and, in the UK, MPs helping themselves with impunity to the public purse, no we are not angry just bloody furious.
    And why the hell shouldn’t we be as rules and the law are applied unequally?

  4. April 12, 2014 at 4:47 pm

    Right on, I read an article about how they can’t find enough jurors in NY for the trial of the woman charged with assault as all of them dislike the Occupy movement. That kind of tells me the jury pool must be full of bankers and you probably know more about that than me just being a reader of the news:) Same thing as what you said here on the marketing going on with the article you referenced. By the way I loved your article on the heartbleed bug, very realistic and down to the point and blogged it. You are so right that the public needs to come to terms with the fact of how difficult programming is. I beat people up over that fact all the time too.

  5. Guest2
    April 14, 2014 at 4:31 pm

    Ralph Waldo Emerson (1841) “On Compensation” shares your point:

    “Whilst I stand in simple relations to my fellow-man, I have no displeasure in meeting him. We meet as water meets water, or as two currents of air mix, with perfect diffusion and interpenetration of nature. But as soon as there is any departure from simplicity, and attempt at halfness, or good for me that is not good for him, my neighbour feels the wrong; he shrinks from me as far as I have shrunk from him; his eyes no longer seek mine; there is war between us; there is hate in him and fear in me…” and he warns:

    “… Fear is an instructer of great sagacity, and the herald of all revolutions. One thing he teaches, that there is rottenness where he appears. He is a carrion crow, and though you see not well what he hovers for, there is death somewhere.” wow…..

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