What’s the link between inequality and social unrest? It’s tempting, looking at Tunisia and Egypt and even student demos in the UK, to believe that inequality causes unrest*. Such an inference might, however, arise from a couple of errors: the availability heuristic which leads us to infer too much from high-profile rare events; and a confusion of correlation and causality.
We need, then, better evidence. And some comes from a laboratory experiment - which highlights a remarkable thing.
Economists at the University of Rennes got subjects to play a game in which they could buy lottery tickets. Subjects were split into two groups, with an advantaged group enjoying better pay-offs than the disadvantaged. This stage of the experiment generated inequality.
Subjects were then given the chance to destroy some of the other groups‘ prizes; if two of three chose to destroy, the destruction occurred, but if only one of three chose to do so, he suffered a financial penalty. This stage of the game corresponds to a decision to riot/protest; doing so is costly if only a few do it and succeeds only if many do, and so the choice of doing so depends upon one’s expectations of what others will do.
And here’s the strange thing. They found that the greater was inequality, the less “rioting” there was. Far from causing unrest, greater inequality actually caused more peace.
If you find this surprising, you shouldn’t. It’s consistent with recent UK history. Inequality has risen since the 1980s and yet there has been less rioting than there was then: back in 1981, you couldn’t walk down the street without tripping over a rioter.
But why is this? In another experiment, the researchers found that individuals were more willing to destroy others’ wealth if the result led to rough equality than they were if doing so merely led to still-high inequality.
This suggests that when inequality is very high, people resign themselves to it, believing there is nothing they can do.
For me, the lessons here are important.
One is that adaptive preferences can arise very easily. But if circumstances shape preferences, then it is simply fallacious to infer that a social structure exists because it is what people want. "False consciousness" is not a Marxist fiction.
Secondly, “stability”- to use that fetish of pompous geopolitical pundits - is no indication whatsoever of a just society.
* In fact, the data suggest that income inequality is not very high in Egypt or Tunisia: it is inequality of political power that is/was acute.
What about status inequalities? Media reports indicate that a big part of the unrest, at least in Tunisia, was the lack of graduate jobs for graduates.
Posted by: Marcin | February 02, 2011 at 04:45 PM
A lack of graduate jobs for graduates? We''ll all be on the streets soon.
Posted by: Mark Brinkley | February 03, 2011 at 11:35 AM
"It is almost never when a state of things is the most detestable that it is smashed, but when, beginning to improve, it permits men to breathe, to reflect, to communicate their thoughts with each other, and to gauge by what they already have the extent of their rights and their grievances. The weight, although less heavy, seems then all the more unbearable."
Alexis de Tocqueville
Posted by: Nick Cohen | February 10, 2011 at 10:16 AM