{"id":"600aa4106cee070008e3bb49","slug":"the-broken-ladder-en","title":"The Broken Ladder","audio_url":"https://hls.blinkist.io/bibs/600aa4106cee070008e3bb49/600aa4116cee070008e3bb4b-T1611310197.m4a?Expires=1656622577&Signature=MPS3noGOjRDsx--lImfOnt3W2YiV~juLhqufH~vxnduMdEHp8ZkcFyQLDFxLPl6P9fsApgTm9Qy9r6MDrEdWtTepW0MvypnEJ2CVztCrl5SNkA5X1JkQFO3Do8m53KFe~mPCj0~lRWQ~Bc83oCDyJHkvplWJf7O7BLQmQ1XTE7V5GQTj3EkxzSMQ7YLpTGQzoViHtwrblMDftOWymxxjK95E86WYChhGKAnp~T93JJo5jByOZcRoyhWgTC7Cn99zIbzM6ObcLLdPVdIWXuVeTuXB6TZH3DvwhhvSTnUif4~v7TK8m8BMBriwCaKTl9l7b~N47jGG~V1pAIWOoH0NVg__&Key-Pair-Id=APKAJXJM6BB7FFZXUB4A","chapters":[{"id":"600aa4116cee070008e3bb4b","title":"Feeling poor has less to do with your material circumstances than with how they compare to those of others.","text":"

Have you ever visited an old castle and wondered what it was like to live there? Maybe you’ve imagined yourself master of Versailles, feasting on the finest foods, strolling the perfectly manicured gardens.

But if you consider the nitty-gritty of daily existence, life in a seventeenth-century palace suddenly seems less appealing. Louis XIV didn’t have hot water or air conditioning, after all. And he definitely didn’t have a microwave. In fact, by today’s standards, he lived in utter deprivation.

The key message here is: Feeling poor has less to do with your material circumstances than with how they compare to those of others.

Research shows that only about 20 percent of people who report feeling poor actually are poor. So what’s happening with the other 80 percent? Why do so many people see themselves as poor even when their income places them squarely in the middle class? Or even, in some cases, the upper-middle class?

Consider a family doctor earning $200,000 a year. She probably lives in a big home in a safe neighborhood, drives a nice car, and owns a lot of nice things. She may have everything she wants, but if she compares herself to the brain surgeon next door, the one making $800,000, she’ll feel poor. Depending on her expenses, she may even feel as though she’s living paycheck to paycheck, barely scraping by. That may sound crazy, but it’s actually quite normal.

Consider yourself. Let’s say someone asks you how much money you make. You might be put off, but you know the answer. Now imagine someone asks you if you make enough money. What do you say? What does enough mean? How do you measure it?

If you’re struggling to come up with a good answer, there’s a reason. While we have physiological sensors in our bodies that help us answer a material question like “do you have enough food?” we don’t have sensors for answering an abstract question like “do you have enough money?” The only way we can make a judgment about that is by comparing ourselves with everyone else. Do other people seem to have nicer things? Do they seem to suffer less financial difficulty? If the answer is yes, we feel poor, no matter our actual income.

In the coming blinks, we’ll explore the impact that has on us as individuals and on the societies we create and inhabit.

"},{"id":"600aa4116cee070008e3bb4c","title":"Even people who aren’t objectively poor suffer negative consequences when they feel poor relative to others.","text":"

Here are some things that are more likely to happen to you if you feel poor – brace yourself, it’s not a pretty list. You’re more likely to experience depression, anxiety, and chronic pain. You’re more likely to have weight issues, diabetes, and heart problems. And not only that, you’re more likely to believe in conspiracy theories, underperform at work, and make bad life decisions. All that, not because you actually are poor, but only because you feel poor.

Yup, you heard that right. It’s not just poverty itself that has devastating consequences – it’s also the feeling of poverty.

The key message here is: Even people who aren’t objectively poor suffer negative consequences when they feel poor relative to others.

Like all primates, we’re highly attuned to our social status. We’re constantly making comparisons between ourselves and those around us. Also, like other primates, we don’t respond well when we think others have been dealt a better hand. Research by primatologist Sarah Brosnan illustrates this point. In one experiment, she gave a monkey a small stone, then held out her hand for him to return it. When the monkey gave the stone back, Brosnan gave him a piece of cucumber in exchange. Again and again, the monkey made the trade.

Then Brosnan introduced a change. She played the game with two monkeys at the same time so they could watch each other’s transactions. The first monkey got cucumber in exchange for the stone, just like before. But the second got a grape, a much tastier treat. When Brosnan went back to just the first monkey and tried the original game, he threw the cucumber back in her face. Strictly speaking, this made little sense: the cucumber was more valuable to him than the stone. But his desire for food was apparently trumped by his frustration at the injustice he had just experienced.

Like the monkeys in the experiment, we're a species that not only cares about status but also about fairness. With the richest 85 people in the world holding as much wealth as the poorest 3.5 billion, is it any wonder we’re increasingly frustrated? As the exorbitantly wealthy grow ever more exorbitantly wealthy, most of us are feeling poorer and poorer by comparison.

In the next blink, we’ll see how that feeling can cause us to make bad decisions and take unnecessary risks.

"},{"id":"600aa4116cee070008e3bb4d","title":"Inequality changes the way we think and act, encouraging risky and self-destructive behavior.","text":"

Imagine you’re taking part in a study. An interviewer asks you a series of questions about your finances, spending habits, and personal interests. A computer program, you’re told, will use this information to calculate a score indicating how much money you have compared to other people similar to you. The interviewer clicks away at the keyboard, a progress bar loads on screen, and voila! A number appears showing that you either have more net worth than most people like you or less.

After that, the interviewer gives you $20 and offers you two choices: you can either pocket the money or use it to gamble and, if you’re lucky, go home with a bit more money. Do you think your decision would depend on the comparative income score you received? In other words, would your relative income relation to your peers affect the way you make choices about risk-taking? If you’re like most people, it would.

The key message here is: Inequality changes the way we think and act, encouraging risky and self-destructive behavior.

In the real-life version of this experiment, 60 percent of participants made to feel relatively rich chose to gamble the money. That number rose to 88 percent for those made to feel poor. In reality, neither group was richer or poorer. The number people were given was completely arbitrary; it didn’t actually reflect their relative wealth compared to others like them. And yet, even objectively affluent participants were more likely to gamble the $20 when they were made to feel poor. The subjective feeling of being worse off than others was enough to trigger the risky behavior.

In another version of the experiment, participants were asked to make a series of financial decisions after they got their score. Would they prefer to receive $100 today or $120 next week? What about $100 today and $150 next week? The study found that participants made to feel poor were much more likely to take what they could get immediately, even if it meant less money overall. Those made to feel rich, by contrast, took the long view, opting to wait a couple of weeks if it meant receiving a greater payout. Again, the responses didn’t correlate to participants’ actual income, but to their perception of where they stood compared to others.

The takeaway? Inequality itself causes people to engage in risky behavior, regardless of their incomes.

In the next blink, we’ll zoom out and look at how inequality affects us not just as individuals, but as members of a society.

"},{"id":"600aa4116cee070008e3bb4e","title":"Inequality leads to social division and political partisanship.","text":"

If you’ve been paying attention at all the past years, you know that a lot of democracies have grown more and more divided. Politics are polarized, pundits scream at each other on TV, and protestors exchange blows in the streets. Sometimes, you even have to avoid conversation topics with members of your own family! Our societies, in short, are more divided than ever.

So what does that have to do with inequality? According to researchers, a lot.

The key message here is: Inequality leads to social division and political partisanship.

To test that proposition, the author and his colleagues designed an experiment. Participants were given real-life seed money to invest in a selection of stocks whose performance, they were told, would be realistically simulated. Everyone could keep their earnings, but those who earned more would be taxed 20 percent to offset the losses of the low earners.

After a period of time, half the participants were told they’d done better than the others, half that they’d done worse. In reality, they’d all been given the same amount, a 30 percent profit off the original investment. They were only told they’d done better or worse than their peers.

Next, they were asked to vote on new rules for the next round of players. Participants who thought they’d earned more than others voted to cut taxes, while those who thought they’d earned less voted to increase them. No big surprise there – people do, after all, tend to vote according to self-interest. If you have money, it stands to reason you want to keep it.

But here comes the interesting part. Virtually across the board, participants who thought they’d outperformed other players saw those who disagreed with them – that is, those who voted for higher taxes – as incompetent, irrational, and biased. Not only that, but when asked whether players who disagreed with them should have a vote in writing the new rules, they said no.

Let’s take a second to think about that. People who saw themselves as high performers wanted the low performers excluded from decision-making – wanted them literally disenfranchised. Participants who saw themselves as low performers, by contrast, wanted everyone to have an equal vote, even those who disagreed with them. Feeling superior in status, in other words, magnifies people’s contempt for those who disagree with them.

Is it any wonder that our politics have become so divided as our societies have grown so unequal?

"},{"id":"600aa4116cee070008e3bb4f","title":"Societies with high inequality have worse health outcomes than those with more equal distribution.","text":"

You probably know that life expectancy is higher in rich countries than in poorer countries. And that, within rich countries, people with more money tend to have better health outcomes than people with less. But what you probably don’t know is that within these wealthy countries, people’s subjective experience of status is a better predictor of health than their actual income.

That’s right. If you live in a developed country, feeling poor affects health and longevity as much as being poor.

The key message here is: Societies with high inequality have worse health outcomes than those with more equal distribution.

Of course, people aren’t dying from acute attacks of “I feel poor” syndrome. Rather, inequality and health are linked through a number of specific conditions, especially those associated with high levels of stress.

You might not be surprised to hear that people experiencing economic hardship are more stressed than those who are not. But did you know that there’s also a correlation between stress levels and low social status?

Many studies have confirmed this connection. Consider an experiment conducted with laboratory monkeys at Wake Forest University. First, the researchers confirmed that the monkeys lower on the status ladder had higher levels of stress hormones and inflammation. Next, they removed all the top monkeys from the group. The result? The monkeys who had previously been in the middle tier of the hierarchy experienced a drop in stress levels. Simply by moving up a notch on the status ladder, they experienced improved health.

True, humans don’t have quite the same dominance hierarchies as monkeys, but we do have plenty of hierarchical structures. And just like monkeys, we experience higher stress when we perceive ourselves to be lower down in the ranks. That helps explain why a middle-class person living in high-inequality Singapore has statistically worse health outcomes than a middle-class person living in low-inequality Finland. The more equal a society, the healthier its inhabitants.

"},{"id":"600aa4116cee070008e3bb50","title":"Inequalities in power, wealth, and status skew our perceptions of reality.","text":"

What would you do if you had $28,000 to spend? Buy a new car? Pay off your student loans? How about spending it on a grilled cheese sandwich?

Sound crazy? In 2004, someone did just that. Why? Because the sandwich had toasted in such a way that it seemed to show the face of the Virgin Mary. This wasn’t an isolated incident. People see these kinds of apparitions all the time. In Wales, a family saw Jesus in a smear of savory Marmite paste spread on its morning toast. In Russia, a whole village worshipped a birch tree whose bark showed the image of Christ. All over the world, humans detect patterns in randomness. But in places with high inequality, they detect them more often.

The key message here is: Inequalities in power, wealth, and status skew our perceptions of reality.

This tendency to see patterns in randomness is called pareidolia, and it’s more common among people who see themselves as having low status. Why? Because those at the bottom tend to feel powerless. They have less control over their lives and work compared to those at the top. For them, the predictability of patterns – their order and reliability – provide some solace in a world that feels out of their control.

Psychologists Jennifer Whitson and Adam Galinsky have tested the relationship between powerlessness and pareidolia in several experiments. In one, they asked half the participants to recount a detailed story about a time they felt completely in control and the other half to recount one where they felt completely out of control. All the participants were then shown images of random markings and told that some contained a hidden picture, which wasn’t true. Those who had just told a story about feeling powerless were three times more likely to see the non-existent images as those who had just told stories about feeling in control. Even a fleeting feeling of helplessness made them more likely to spin meaning out of meaninglessness.

When the experimenters used the same method to test the relationship between powerlessness and conspiracy theories, they got similar results: participants who saw themselves as powerless were more likely to believe such theories than those who saw themselves as being in control.

What does this mean for us as our societies grow increasingly unequal? Finding Mary’s face on a piece of toast or Christ in the bark of a tree may not sound particularly dangerous. But large masses of people growing more and more susceptible to conspiracy theories? That sounds like a much bigger problem.

"},{"id":"600aa4116cee070008e3bb51","title":"Inequality undermines workplace performance and heightens dissatisfaction.","text":"

The average person will experience inequality most directly and frequently at work. Silicon Valley’s flat structures notwithstanding, workplaces are still largely organized as hierarchies.

You’ve probably been taught that this is a good thing. Hierarchies create incentives, right? Without a ladder to climb, without more money to aspire to, we’d grow lazy and unproductive. Alas, the data tells another story. While pay inequalities can be motivational, they can also breed resentment. Today, they’ve reached such staggering heights that they’re more demotivating than inspiring. Far from improving outcomes, increasingly enormous pay differentials are making things worse.

The key message here is: Inequality undermines workplace performance and heightens dissatisfaction.

Let’s take a look at how this plays out in one of America’s most beloved workplaces: Major League Baseball. Economist Matt Bloom analyzed the record of every baseball team over an eight-year period. If you believe that pay inequality motivates better performance, you’d expect the teams with greater pay differentials to win more games. In fact, the opposite was true: teams where inequality was high – usually because a small handful of top players were paid extremely large salaries – actually performed worse. Not only that, but the top players themselves performed worse on teams with high inequality. More equitable distribution, it seems, boosted morale so much that even the top earners played better when their salaries were more in line with those of their teammates.

In addition to performing worse, people in highly unequal workplaces also suffer more anxiety. And we’re not just talking about the sleep-deprived, Type-A, workaholic CEO here; we’re talking about the people who work for her. According to empirical data, the most stressed-out workers are not, in fact, the high achievers at the top of the food chain, but those following their orders in the middle and bottom. As the wages of these ordinary workers stagnate and the executive pay rate shoots through the roof, the vast majority of workers will experience high levels of stress and fail to perform at their full capacity.

Is that really the best system we can imagine?

"},{"id":"600aa4116cee070008e3bb52","title":"There are things we can do to mitigate the negative effects of living with inequality.","text":"

By now, you might be feeling a bit depressed. Income inequality is higher than ever with no sign of letting up. It’s making us unhappier and unhealthier and tearing apart the social fabric of our lives. The poor are suffering from both poverty and inequality, and even the affluent feel and act as though they’re poor.

And yet, there’s still some hope!

The key message here is: There are things we can do to mitigate the negative effects of living with inequality.

There are two key things we can do to combat inequality: One, reduce it. Two, exert more control over the way we compare ourselves to others. To achieve the first, we need wholesale political change. That means organizing, voting, and putting pressure on lawmakers to create new redistributive policies that not only raise the bottom rungs of the ladder, but also, crucially, lower the top one. That, of course, is a long-term project.

In the short term, you can learn to recognize when you’re in the throes of comparing yourself to others and consciously decide to choose your comparisons more wisely. Instead of focusing on what you don’t have, for example, focus on what you do have. Or redirect your comparisons from other people to your own past – what is better about your life today than your life ten years ago?

Another change you can make is to your context; we tend to compare ourselves to the people around us. If your social milieu makes you feel inferior – get a new one! The most effective method though, is to take a few minutes to think about what you really value in life. Write down your answers. Are any of them about climbing a social ladder? Probably not. Consciously thinking about what really matters to us is an antidote to the unconscious default of looking to others to figure out how much we value ourselves.

Once we get there, we might find ourselves better equipped to answer the question “do you earn enough money?” And beyond that, to join up with others to build a more egalitarian world.

"}]}

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