Classical Values :: when earned is unfair, unearned is fair!

May 30, 2008

when earned is unfair, unearned is fair!

Today's WSJ Science Journal has a piece by Robert Lee Hotz called "Revenge of the Freeloaders -- Study Finds Culture Influences Reaction To Reward, Rebuke." Naturally, I was fascinated, and I was even more fascinated by some of the unexamined premises raised in both the study and the piece.

We all bristle at people who put themselves ahead of the common good, whether it is by evading taxes, shirking military service, cheating on bus fares or littering. Many of us will go out of our way to shame, shun or otherwise punish them, researchers have shown. That's how we foster a community that benefits everyone, even at some cost to ourselves.

Sorry, but that first sentence contains too many premises for comfort. While most fair-minded people bristle at tax evaders, I'm not entirely sure it's because they're placing themselves ahead of the common good, because increasing numbers of people are inclined to see the government as wasteful, and see those who'd fall into the category of "undeserving tax eaters" as at least as morally egregious as those who evade taxes. Thus, the objection to tax evaders is often more rooted in the fact that the tax evader got an unfair advantage (and broke the law) than in the quaint and antiquated idea that tax revenues necessarily go to the common good. In fact the more the government is seen as a freeloader (if not a thief), the less immoral the tax evader becomes. However, his evasion remains fundamentally unfair, especially to the rest of us who complied with the law, so we resent him. What is being forgotten is that in many parts of the world, governments are seen as little more than robber barons, and tax evasion is considered about as immoral as going in excess of a posted 55 MPH speed limit would be on a eight lane superhighway.

As to shirking military service, what about so many of the Vietnam generation draft evaders who spent years in college avoid military service by way of student deferments and the like? We elected one president, and Bill Clinton was followed by George W. Bush, who did reserve duty. It strikes me that while there are many people who bristle at those who avoided service in Vietnam, their reasons differ. For those on the left, draft evasion in the form of deferments was the right and moral thing to do only if you were opposed to the war; if you supported the war, you became a hypocrite for not serving. If we apply this standard to taxation, "principled" tax evasion by those who oppose taxation would be justified, while those who believe in the system but evade for selfish reasons would be immoral.

But how is anyone supposed to ascertain whether both claims of principle might not be driven by selfishness? It is not just as selfish to not want to risk dying in a war as it is to not want to hand over your money to the government? I honestly don't know, but I don't think we all feel the same way about these things.

As to cheating on bus fares and littering (assuming the fare cheater can afford the fare), it's very tough to come up with any moral justification at all for such sleazy behaviors, so the vast majority of us would properly bristle at such behavior, and for the same reasons. To my mind, littering is especially animalistic behavior, and I suspect most litterers would benefit from being imprisoned in dumpsters for a weekend or forced to scrub sidewalks with toothbrushes, except that would violate the 8th Amendment. I saw a guy throw a coffee cup on the ground over the weekend, and as he glanced glaringly at the people around him it occurred to me that he might consider putting the cup in a nearby trashcan to be beneath his "dignity" -- or even "sissy" behavior. (An unfortunate truth is that society once had the whipping post precisely to deal with miscreants like that.)

But I'm afraid I've strayed dramatically from the scientific study of freeloaders, retaliation, and cooperation. Not surprisingly, results varied by countries.

To explore cooperation across cultures, Dr. Herrmann and his colleagues recruited 1,120 college students in 16 cities around the globe for a public-good game. The exercise is one of several devised by economists in recent years to distill the complex variables of human behavior into transactions simple enough to be studied under controlled laboratory conditions.

The volunteers played in anonymous groups of four. Each player started with 20 tokens that could be redeemed for cash after 10 rounds. Players could contribute tokens to a common account or keep them all to themselves.

After each round, the pooled funds paid a dividend shared equally by all, even those who didn't contribute. Previous research shows that a single selfish individual riding on the generosity of others can so irritate other players that contributions soon drop to nothing.

That changes when players can identify and punish those who don't contribute (in this case, by deducting points that can quickly add up to serious money). Once such peer pressure comes into play, everyone -- including the shamed freeloader -- starts to chip in.

"Freeloaders are disliked everywhere," said study co-author Simon Gachter, who studies economic decision-making at Nottingham. "Cooperation always breaks down if people can't punish."

The students behaved the same way in all 16 cities until given the chance to punish those taking a free ride on the shared investment. Punishment was done anonymously, and it cost one token to discipline another player.

Among those punished, differences emerged immediately. Students in Seoul, Istanbul, Minsk in Belarus, Samara in Russia, Riyadh in Saudi Arabia, Athens, and Muscat in Oman were most likely to take revenge by deducting points from other players -- and to give up a token themselves to do it.

"They didn't believe they did anything wrong," said economist Herbert Gintis at New Mexico's Santa Fe Institute. And because the spiteful freeloaders had no way of knowing who had punished them, they often took out their ire on those who helped others most, suspecting they must be to blame.

Such a readiness to retaliate, researchers said, reflected relatively lower levels of trust, civic cooperation and the rule of law as measured by social scientists in the World Values Survey, which periodically assesses basic values and beliefs in more than 80 societies. In countries with democratic market economies, peer pressure goaded people to cooperate. Among authoritarian societies or those dominated more by ties of kinship, freeloaders instead lashed out at those who censured them, the researchers found.

"The question is why?" said Harvard political economist Richard Zeckhauser.

No one is sure. The freeloaders might be angry at being trumped by strangers, or be unwilling to share with people they don't know. They also might believe they are being treated unfairly.

Well, that last realization is nothing new. Mark Twain noticed it over a century ago, when he famously observed,

If you pick up a starving dog and make him prosperous, he will not bite you. This is the principal difference between a dog and a man.

If we put aside the issue of why some cultures are more retaliatory than others, the biggest problem I see with the above experiment is that it relies on "free" money as opposed to earned money.

Naturally, this distorts a very primal question: whose money is whose? It's a lot easier to consider unearned money to be other than your own, and thus, to give an extreme example, a lottery winner is less likely to feel resentful about forking over his winnings than the owner of a store who has built it from scratch.

And an independent contractor who builds fences for a living is likely to be far more resentful about writing the government a check out of his earnings than the same man would if he worked as an hourly employees for a large fence company and had the taxes deducted -- even if the work was identical, and even if the net after-tax income was the same. The question of whose money is it? so strikes at the core of what motivates people that if the tax withholding laws were abolished, the income tax system would become unsustainable.

Several years ago, I looked at a work situation a left-wing writer saw as an experiment in socialism -- by waiters at a New York restaurant who shared their tips. Like the experiment Hotz describes in today's journal, there was also a common pot. Unlike that experiment, the money that went into the common pot was not exactly "free" but was earned. Waiters who worked harder earned larger tips, and, as the author admitted, these harder workers tended to resent the waiters who didn't:

....which means that tips--no matter how much an individual brings in individually--were split equally. On nights that I sold our most expensive wines and entrees to the best Big Apple tippers, I divided what I've earned with the rest of the house.

Needless to say, this is an experiment in the successes and pitfalls of a socialist society. The good parts are plentiful; when a server gets weeded (waitspeak for "too busy to function"), it is the responsibility of the entire house to pick up the slack. The house does this out of respect for the concept of teamwork and, more importantly, out of a selfish desire to protect the common monetary interest.

Conceptually, this inspires in my coworkers different reactions. One particularly obnoxious workmate of mine constantly complained that some servers didn't hold up their end of the bargain. They're lazy, he says, or they don't sell the same amount of food as he does. (Emphasis added.)

Right there, the author touches on an fascinating resentment -- not of the harder workers for working harder and having more money to contribute, but a resentment of their resentment. There is a war with the idea that there should be any more entitlement to earned money than to unearned money.

And it needs to be resolved by getting rid of that typically American mindset of ownership -- and above all, of responsibility.

.... that's an American mindset. We are possessionists, obsessed with belongings and ownership. We are a nation of deeds and titles, a nation mired in proving what we have. In the end, if we have shelter and freedom and family, that should be enough to sate any of us.

The fact that the fulfillment of these needs isn't enough is disconcerting, because if a pooled house is a microcosm of that elusive Communist society that has never entirely worked, the one truth is that success is a (distant?) possibility. But we need to divorce ourselves from the idea that each of us is directly responsible for certain things and take a more proactive role in living life. As the environment, economy, and government continue to suffer varying degrees of trauma, it feels increasingly important that we leave our individual bubbles and join a community. Call it a manifesto, or call it a practical approach to changing the world, but it seems to me that we could all be better people if we learned what our teachers tried to impart in kindergarten: sharing is good.

In a kindergarten setting, such lessons in altruism are much easier to impart, and easier to justify, because after all, whatever possessions or money children have is generally given to them by adult authority figures, and is thus "free."

The bottom line is that it's not only a lot easier to share free money, it's a lot easier to become morally indignant with those who don't. But those who didn't earn their fair share are much more likely to be "generous" with what they didn't earn, and less tolerant of the reluctance of those who earned their money to share it.

Carried to an extreme, this leads the freeloading classes to paradoxically accuse those on whose hard work they depend -- their benefactors -- of being greedy. Of being "freeloaders" for not wanting to pay "their fair share."

Which makes about as much sense as parasites accusing their host of parasitism.

AFTERTHOUGHT: I'm thinking that there may be a direct relationship between resentment and greed. Think about it this way: if the more productive classes are resented for having more, and if they are also resented even if they pay more, it begs the question of whether the resentment of them stems from a poorly understood aspect of human nature which touches on the Twain distinction between man and dog. Suppose for the sake of argument that there is some natural, biologically based resentment of the "helping" classes by the classes who are "helped." (Hence the quotes.) The result is that the productive are in a no-win situation; they are resented for having earned more, and also resented for helping the non-productive classes. OK, it being a given that humans dislike being resented, if they're going to be resented either way, what's in it for them by being helpers? Other than not wanting to go to prison, I don't know.

But I strongly suspect that the more the productive classes are resented for being "greedy," the greedier they'll actually become.

UPDATE: My thanks to Glenn Reynolds for linking this post, and a warm welcome to all!

Comments appreciated.

posted by Eric on 05.30.08 at 10:09 AM

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parasites accusing their host of parasitism

In some future post about conservative voters vs. McCain, remember the prominence of such perverse accusations as a campaign theme / personality trait of his.

The expectation that their side's politicians won't talk like that is a rhetorical (and, for some, ethical) standard that many Republican voters have a great long-term interest in maintaining.

If that kind of talk comes the winning factions of both sides, they have no side.

guy on internet · May 30, 2008 11:46 AM

This also seems related to the idea that people who work their way out of poverty somehow must "give back to the community".

Lovernios · May 30, 2008 01:24 PM

Yes, give back.

After all, they "took" so much!

Eric Scheie · May 30, 2008 02:55 PM

guy, I take your point but think it is exaggerated in McCain's case. You have gotten entirly focused on one side of the balance scale. Have a Guinness or something.

Eric, the topic has been treated at book length many times, so it is hard to know which of a dozen directions I might take to add in to your discussion. I've touched on similar things myself, and like very much what you put here. I'll think about this on the drive home and through the evening and come back to this.

Assistant Village Idiot · May 30, 2008 03:34 PM

Great post, Eric. Human nature and morality haven't changed in 35000 years, and cannot be legislated, no matter what those in power in governments and religions may think.

dr kill · May 30, 2008 06:30 PM

'lanched:

http://pajamasmedia.com/instapundit/archives2/019882.php

M. Simon · May 31, 2008 10:27 AM

Great post. I may be misunderstanding you on one point, though, so forgive me if that's the case.

Why is it an unfortunate thing that we once had the whipping post to deal with litterbugs? Or bullies? Or petty thieves? Or sturdy beggars?

There's nothing cruel about whipping when compared to imprisonment, and it's certainly more economical, and would probably be more effective in actually changing behavior.

Corporal punishment is not cruel, and it's too bad that it's become unusual as a tool of justice.

sobi · May 31, 2008 10:59 AM

Brilliant post.

Jonathan · May 31, 2008 11:07 AM

Why is anyone shocked to find that those who "freeload" are also resentful? Sitting around and wanting what others have is the very definition of greed. Being denied one's desire by someone most able to fulfill that desire cements the victim-as-martyr attitude. It all goes hand in hand.

As one "client" fumed at my inability to pay his rent for him, "what are ya'll doing with all that money?"

I patiently explained that we were not a government agency and did not have unlimited funds. Our money comes from private citizens who, at this point, have donated twice to meet his "need."

My co-worker just asked him, "well, what are doing with all of your money?"

Resentment can flow both ways. For different reasons.

Joan of Argghh! · May 31, 2008 11:07 AM

The German farmer looks at his rich neighbor down the road, shakes his fist and declares, "If I have to work my whole life and my wife too and even if it kills us, one day we will be as rich as you!"

The Russian farmer looks at his rich neighbor down the road, shakes his fist and declares, "If I have to work my whole life and my wife too and even if it kills us, one day you will be as poor as us!"

That little insight has been share with me by several Russian immigrant friends over the years.

Charlie · May 31, 2008 11:11 AM

All of this comes as no surprise to some of us (although I enjoyed your well written and informative post-as I usually do). One need look no further than Obama's church pews to see a large group of folks, many of whom have benefited from programs that put our cash in their pockets in one form or another. And still their anger at "white privilege" seethes just below the surface at all times, easily enflamed by the likes of demagogues like Wright, Moss, and Phleger.

That particular crowd will never be happy-no matter how much they are given by the society at large. Although they speak of fairness and reparations, what they really want is revenge against "whitey"; their ersatz benefactors, under the Marxist entitlement programs, that they've been taught to hate. And, they've been taught to hate in many of our publicly funded schools and universities........

But don't get me up on my soapbox about the school systems indoctrination of our children with their "correct" values. To hell with us instilling our own values in our children; we've given a permission slip to the teachers unions to brainwash them as they wish!

Bob · May 31, 2008 11:52 AM

What favor have I done for you that you should hate me?

Our politicians are wonderfully extravagant with money they haven't earned;perhaps the way to end this destructive behavior is restrict the franchise to those who are paying the freight and not the takers.
Those who want tax cuts are greedy,not those on the public teat, or so one might think from our MSM. Strange that bloodsuckers should be so self rigtheous.

renminbi · May 31, 2008 12:33 PM

Labor unions which charge "fair share fees" to non-members are also an interesting case. In California, state government workers who choose NOT to join the union have their paychecks garnished of 90% of the union dues. Before these fees were levied in the late 1990's (on the basis of fairness) all of the many union activists I know thoroughly resented the non-members who "gained" from the contract bargained by the union.

The union activists resent one class of freeloader (the non-members) but actively lobby for another class of freeloader (the non-taxpayers). They support higher taxes, free services for illegal immigrants, etc.

It would be extremely interesting to perform the same "public good" experiment using union activists instead of students. I, for one, would LOVE to read about that!

Joe · May 31, 2008 12:42 PM

Yeah, occasionally, when the freeloaders realize that they've REALLY hit the Jackpot Of Free Stuff, they feel 'proud of America for the first time in their adult lives'.

Les Nessman · May 31, 2008 12:49 PM

"Are you spending your time giving back now?" a woman from my daughter's upscale private school asked, after grilling me about what I do for a living now that I've had a number of successful companies and am taking time off.

"Not really", I answered. I explained to her that I earned every penny myself and while I feel great compassion to all people, I always question the value of giving people money.

Does it really help them? If someone is truly starving, it might make a huge difference, but if a corrupt government or relief organization steals my donation, who am I helping?

Many "charitable" organizations are nothing more than a way to benefit the rich donors, i.e. operas, private schools for spoiled kids who already have too much, etc. Most of this isn't charity.

Am I doing it out of a sense of guilt to make myself feel better and not out of compassion?

Most everything in your article talks to greed and guilt, some of the most basic human emotions.

Chris Kitze · May 31, 2008 01:17 PM

Let's put this another way via a quote:

Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded � here and there, now and then � are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.
This is known as "bad luck." --- Robert A. Heinlein
*******

wjr · May 31, 2008 01:42 PM

You are all looking at it wrong. Oh, just so wrong!
As governments get more greedy and intrusive people look for ways around. It's the "get off my back, out of my pocket and leave me alone" drive. Money is power! Keep as much as you can.
Think of a modern "communilistic" government as an organization in charge of a large POW camp. You know if someone escapes, the guards and their bosses will punish those that remain behind. (They do this in hopes someone will "rat-out" the next escape attempt. This is known to work, unfortunately). The inmates know this also and as the beatings continue, take heart in the knowledge the escapee might get away and make it to freedom. That "hope" sustains those that remain behind. (...makes the injustice lighter; easier to bear).
You don't ever tell the guards how the escape was managed as you yourself might want to use it someday. You take your lumps and bide your time.
Come on there, it's us against them. There is no Fairness. That's a word the guards use against the inmates to control them. Let's not forget that.

Pixelkiller · May 31, 2008 01:47 PM

Do Not Covet.

Seems there is a very good reason that there are 10 Commandments instead of nine.

flicka47 · May 31, 2008 01:50 PM

wjr, you're so wrong, too.

It's all about clients. Create clients, be a client.

Every business works that way. And government is the biggest business there is. As long as they keep creating clients, they stay in business. Those that keep creating clients out of the toil of the non-clients are the greediest of them all.

Joan of Argghh! · May 31, 2008 02:17 PM

We had this scenario play out in our district when evacuees from Katrina were given apartments to live in. Even though the students were given food and clothing and gift cards, many of the evacuees participated in theft, gang style behavior, fights and such. We are still seeing shootings in the neighborhood, which is one of the more affluent and diverse areas of Dallas. What is puzzling is that many of the kids who were victims of various acts were the same ethnicity as those who committed the crime. And the resentment went both ways causing a great deal of acrimony until the vouchers dried up and the students moved away. Our kids are not poor, but they aren't wealthy either, and they absolutely had no compassion for kids who committed crimes regardless of their race or socio-economic backgrounds. These same students participated in numerous food, money and clothing drives to support these same evacuees, so they felt doubly wronged when in return they were victims. Nobody likes to be the Little Red Hen, doing all the work and forced to share the rewards, yet those are the rules our current society seems to support. Is it any wonder that few young people feel the need to work as hard as they can, when in return they will only be supporting someone who doesn't work at all?

Ellen K · May 31, 2008 04:16 PM

Jesus taught that the widow's gift of two coppers meant more than the gifts of the wealthy, because she'd given all she could while they wealthy hadn't. Play out the logic and those with everything to give must give everything, while those with nothing to give must give...nothing.

The real problem doesn't start with a sense of entitlement. It starts with an artificial sense of helplessness that makes people think they can't do it on their own so they shouldn't be expected to. Minorities are told they can't compete without affirmative action. Workers are told they can't compete without "fair trade." Farmers are told they can't compete without price supports. And welfare recipients were told they couldn't even take care of themselves. Look at Al Gore's promise to fight for the people against the powerful. There's an underlying theme here, and it's not just that you have a right to freeload. No, the real theme is that you can't succeed or even survive unless and until you give someone, somewhere in some government power over your destiny.

Once you learn that the route to your own success is to let someone else give it to you in return for your giving them power, it's logical to think that those who have success now have made a similar deal. If the route to your own success isn't earning it, why would that be the route to success for other people? It's not that when earned is unfair, unearned is fair. Rather, in a culture of victims, nothing is actually earned - only taken or given - so "fair" is based solely on what you're perceived to have.

GeoffB · May 31, 2008 04:33 PM

This study was done by academics, right? I'm in academia, at the bottom (i.e., I'm unemployed). I've seen what leftist academics are like when it comes to sharing: they aren't interested. We've got a jobs crisis in academia right now. Is there any talk of job-sharing? No. How about sharing grant money? No. How about sharing of publishing opportunities? No.

When I started looking for jobs in academia, I was a socialist, but after seeing how stingy the "socialists" of academia were, I now vote Republican.

JFP · May 31, 2008 04:47 PM

The word covet is effective. This issue comes up regularly on the blog I comment to and this challenge tends to quiet the crowd quickly.
Who is greedier... the person that wants to keep more of their own earnings, or the person that covets those earnings for himself?

Shooter242 · May 31, 2008 05:00 PM

Your conclusion sounds pretty much like the entire point of Atlas Shrugged. Nothing new, but it's amazing how the freeloading classes will never realize just how messed up their mindsets are.

Ben · May 31, 2008 05:41 PM

Wow. I guess waiting a bit worked out for me. Other people have covered much of what I would have mentioned, and better than I would have.

From the linked WSJ article: Among students in the U.S., Switzerland, China and the U.K., those identified as freeloaders most often took their punishment as a spur to contribute more generously. But in Oman, Saudi Arabia, Turkey, Greece and Russia, the freeloaders more often struck back, retaliating against those who punished them, even against those who had given most to everyone's benefit. Hmm. Those two lists seem significant. I was surprised and pleased to see China on the good list. Certain cultures seem to produce more people who get enraged when caught freeloading. Isn't it automatic to relate that to how those cultures respond as nations in the world? I'm waiting for the multicultural spin of how that response is actually just as moral as the other cultures'.

Spending of one's own resources to punish freeloaders is called "altruistic punishment," and can also be seen in such things as stepping in to stop bullies or thieves. It's a fascinating topic for those who want to google up on it.

The more you give people, the less grateful they are. Not at first, but the status imbalance becomes too much to bear over time. The first gift is received with gratitude, but people complain that the fifth gift arrived late.

Assistant Village Idiot · May 31, 2008 05:58 PM

Been there. People that get mad at you because you're not as generous with your time and money as they are (with your time and money).

As for the resentment-greed link, people want to feel good about themselves, so when they see a chance to profit by harming someone else, they tell themselves their victims deserve what�s coming to them. Rapists and thieves think their prey are �asking for it�. Nazis and Communists and Socialists think they�re just getting back what the Jews and kulaks / intellectuals and capitalists have stolen. Thought crime human rights tribunals think people who disagree with them shouldn�t be allowed to harm society. So do the �love the sinner, hate the sin� folks (funny how it always seems to have gone the other way �round when you hear about them in the news).

And of course when we appease and thus subsidize resentment, we naturally get more of it.

One more point: notice how all of this depends on an extended list of �rights�; laissez faire doesn�t get you there. You can dress them up in communitarian clothing, but rights over other people � rights to their time and property and speech and beliefs � are predators� rights. (Which doesn't mean they'll always be used for predation, but...)

Larry Knerr · May 31, 2008 07:52 PM

The two most destructive of human emotions are envy and resentment. When you think about it, they're actually two versions of the same thing.

I'm sure that Dr Helen would agree with me.

If you examine the real "root causes" of any human pathology; when you get past the superficial reasons, poverty, crime, drugs, etc, you will find envy and resentment.

Every religion recognizes this and has some version of "thou shalt not covet they neighbor's ass". But practicing it is another matter.

It's like saying, 'all we have to do to end war is to quit killing each other".

John D · June 1, 2008 03:56 AM

A lot of the resentment depends on how you believe rich people become rich. Some view wealth as a fixed in society. If I have more money you must have less. These people are going to resent the wealthy because the money the wealthy have was theirs to begin with. Others believe that money is created by productive people making things or providing services that other people want. Most productive people probably believe the latter. Many unproductive people believe the former. I wonder how much of their lack of productivity is based on this belief system?

Sam S · June 1, 2008 07:17 AM