The relevance of a hypothesis on inequality caused by selfishness
PremiumSurprisingly uniform Indian perceptions of the rich could help us formulate new policy responses
Samuel Johnson was emphatic: “Getting money is not all a man’s business: to cultivate kindness is a valuable part of the business of life." As a normative observation, this is unexceptionable. What is perhaps just as important is knowing whether people are in fact generous—specifically the rich, who can afford to be.
Based on a sample of students in a laboratory experiment (Piff et al, 2010) arrive at surprising results. Lower class participants (as classified) allocated more of their points to their partner relative to upper class participants. The former also exhibited a greater tendency towards egalitarian social values relative to their upper class counterparts. Also, people who reported more egalitarian social values tended to engage in more pro-social behaviour. This suggested that while upper class individuals can use their material wealth to protect themselves against life’s disruptions, those in the lower class tend to rely more on the strength of their social bonds and are therefore more pro-social.
Another study (Rockenbach et al, 2021) conducted in a poor neighbourhood of Namibia, one of the world’s most unequal countries, found that the egoistic behaviour of the rich induces the poor to act more egoistically. The poor are surprised when they find that the rich do not share what they have. This changes injunctive norms: the failure of the rich to share leads others in society to view their own egoistic behaviour as acceptable. Thus, the behaviour of the rich damages the economy in two ways: through their lower contribution to helping the poor, and indirectly via lower contributions by others.
One of the key hypotheses tested in an analysis of the Gallup World Poll of 2018 by Almåsa et al (2022) is that of ‘Selfish Rich Inequality’; that is, whether the rich are richer than the poor because they have been more selfish in life than the latter. A valuable insight is that non- productive grabbing behaviour of the rich is typical of countries with weak institutions, due to weak rule of law, malfunctioning bureaucracy and corruption. Hence, people in such countries are more likely to believe that the rich have become richer because they have been involved in selfish grabbing activities. Although strong support is found for this hypothesis at the global level, there are substantial variations between and within countries. Support for the selfish rich inequality hypothesis rises with the level of corruption and decreases with an individual’s rank in the country’s income distribution. The study’s final analysis shows that popular belief in selfish rich inequality is positively associated with broad agreement that inequality in their country is unfair and that the government should aim to reduce it.
Our analysis using the Gallup World Poll Data of 2018 for India, along with the Fairness-Across-The-World module provided by FAIR: The Choice Lab, NHH Norwegian School of Economics, offers some insights. This is an analysis of respondents’ beliefs and not the actual behaviour of the rich. Also, as these responses are focused on the rich inequality hypothesis, we can’t disentangle these from beliefs about selfishness of the rich per se, so we restrict our analysis to the inequality hypothesis.
Our analysis shows that while there is more support for the selfish rich inequality hypothesis among richer people in India, and lowest among the country’s unemployed, there is less support among females, people above the age of 65 years and those living in urban areas.
Larger shares of lowest income and middle income groups believe both in the selfish rich inequality and the statement that it is not possible in the country to work hard and get ahead. On the contrary, a vast majority of the highest income group believes that people can get ahead by working hard, even when selfishness of the rich is seen as one of the big reasons for income inequality.
There is substantial support for the hypothesis that the rich are richer than the poor because they have been more involved in illegal activities, as large proportions of respondents across all age groups by gender, income, location and employment status strongly agree. Shares of those who agree that the rich engage in illegal activities are highest among men; nearly equal but higher among middle and high income groups, and among those living in rural areas; and lowest among the unemployed.
Large shares of respondents across all age groups by gender, income and employed-status strongly agree with the statement that such inequality is unfair. In particular, there is more conviction in this being unfair among those of high income, men and employed people.
In response to the survey’s question on whether government should aim to reduce economic differences, well over 80% of each income group expresses agreement/strong agreement, with nearly equal but highest shares among the middle and high income groups.
In conclusion, a broad Indian consensus on the rich inequality hypothesis, its unfairness and a key role for government in income redistribution is as surprising as it’s true. Whether there exist feasible policy options that could combine incentives for the rich to invest productively with severe punishment for any criminal activities is not self-evident, but deserves careful examination.
Aashi Gupta, Vani S. Kulkarni & Raghav Gaiha are, respectively, a doctoral student in economics, Delhi School of Economics; lecturer of sociology; and a research affiliate, Population Aging Research Centre, University of Pennsylvania, US