[H]ere's a chart from this week's edition of Too Much, an online weekly publication of the Institute for Policy Studies. It turns out that over 90% of Americans would prefer to live in Sweden, rather than the US, so far as wealth distribution is concerned:
The chart was based on a paper, "Building a Better America - One Wealth Quintile at a Time" by Michael I. Norton of Harvard Business School and Dan Ariely of Duke University, and is Forthcoming in Perspectives on Psychological Science. The abstract begins as follows:
Disagreements about the optimal level of wealth inequality underlie policy debates ranging from taxation to welfare. We attempt to insert the desires of "regular" Americans into these debates, by asking a nationally representative online panel to estimate the current distribution of wealth in the United States and to "build a better America" by constructing distributions with their ideal level of inequality.
This is, in fact, as the authors go on to explain, an attempt to essentially operationalize philosopher John Rawls "veil of ignorance" from his Theory of Justice. And the results are truly eye-opening:
First, respondents dramatically underestimated the current level of wealth inequality. Second, respondents constructed ideal wealth distributions that were far more equitable than even their erroneously low estimates of the actual distribution. Most important from a policy perspective, we observed a surprising level of consensus: All demographic groups - even those not usually associated with wealth redistribution such as Republicans and the wealthy - desired a more equal distribution of wealth than the status quo.
What this tells us, in essence, is that our political system is far out of whack in creating the sort of nation that the vast majority of Americans want to live in. The Constitution says in its preamble that it exists in part to "promote the general welfare", and this is what almost all Americans believe that the general welfare looks like. Something is deeply and seriously wrong, and it's not just a matter of liberal opinion. This is cold, hard data.
It's also worth noting the vast gap between the outcomes of the "marketplace" (which is, of course, nothing like the simple, idealized competetive market of early capitalist economics) which are assumed to reflect the totality of individual preferences and the explicityly expressed preferences found in this poll. This is but another indicator of the profound disconnect in the field of economics.
We take a different approach to determining the "ideal" level of wealth inequality: Following the philosopher John Rawls (1971), we ask Americans to construct distributions of wealth they deem just. Of course, this approach may simply add to the confusion if Americans disagree about the ideal wealth distribution in the same way that policymakers do. Thus, we have two primary goals. First, we explore whether there is general consensus among Americans about the ideal level of wealth inequality, or whether differences - driven by factors such as political beliefs and income - outweigh any consensus (McCarty, Poole, & Rosenthal, 2006). Second, assuming sufficient agreement, we hope to insert the preferences of "regular Americans" regarding wealth inequality into policy debates.
There's one caveat before proceeding. The authors use Swedish income distributions in their study, since even Swedish wealth distributions are relatively concentrated (I know, Newt will have a heart attack), and thus would not present as clear a contrast as using income distribution does.
Here's what they found in terms of preferences between the Swedish income distrubtion, the US wealth distribution, and complete equality:
Next, here's a comparison of the actual distribution, the perceived distribution, and the ideal distribution:
Finally, here's a breakdown of the perceived and ideal distributions of various different sub-groups, which shows that even relatively conservative subgroups--Bush voters, those making over $100K, men--have an aggregate preference for much higher levels of equality--quite contrary to what their political representatives call for and defend:
Concerning this figure, the authors write:
What is most striking about Figure 3, however, is its demonstration of much more consensus than disagreement among these different demographic groups. All groups - even the wealthiest respondents - desired a more equal distribution of wealth than what they estimated the current United States level to be, while all groups also desired some inequality - even the poorest respondents. In addition, all groups agreed that such redistribution should take the form of moving wealth from the top quintile to the bottom three quintiles. In short, while Americans tend to be relatively more favorable toward economic inequality than members of other countries (Osberg & Smeeding, 2006), Americans' consensus about the ideal distribution of wealth within the United States appears to dwarf their disagreements across gender, political orientation, and income.
Finally, in conclusion the authors write:
Given the consensus among disparate groups on the gap between an ideal distribution of wealth and the actual level of wealth inequality, why don't more Americans - especially those with low income - advocate for greater redistribution of wealth? First, our results demonstrate that Americans appear to drastically underestimate the current level of wealth inequality, suggesting they may simply be unaware of the gap. Second, just as people have erroneous beliefs about the actual level of wealth inequality, they may also hold overly optimistic beliefs about opportunities for social mobility in the United States (Benabou & Ok, 2001; Charles & Hurst, 2003; Keister, 2005), beliefs which in turn may drive support for unequal distributions of wealth. Third, despite the fact that conservatives and liberals in our sample agree that the current level of inequality far from ideal, public disagreements about the causes of that inequality may drown out this consensus (Alesina & Angeletos, 2005; Piketty, 1995). Finally, and more broadly, Americans exhibit a general disconnect between their attitudes towards economic inequality and their self-interest and public policy preferences (Bartels, 2005; Fong, 2001), suggesting that even given increased awareness of the gap between ideal and actual wealth distributions, Americans may remain unlikely to advocate for policies that would narrow this gap.
All this may be true. But the stunning fact that (1) there is such a strong preference for much greater equality and (2) that it is broadly shared strongly suggests that there is a sleeping political giant here, just waiting to be awakened. It would behove us to devote a good deal of thought and energy to considering how that might be done.
