Class Warfare

I’ve been hearing Duke University Behavioral Economist Dan Ariely on the Marketplace show for a while now, and I want to read his book. Here’s a bit I heard today:

“ARIELY: We posed people two questions, we said: What do you think the wealth distribution in the U.S. is? And what do you think is the ideal wealth distribution?

“Ryssdal: So in other words, what do you think in the United States now, who has most of the money and then what ought it be, right?

“ARIELY: That's right. And what happened is that first of all, people dramatically underestimate the wealth inequality in the U.S.

“Ryssdal: Underestimate. So the fact of the matter is fewer people have more of the money.

“ARIELY: That's right. So if you look at the whole world in terms of wealth distribution -- before the recession, I don't have data about after the recession -- but before the recession we're basically between the Western world and South America. We were the most skewed distribution of the Western world in terms of the haves and the have nots. But now the more interesting question is what do people think it should be. And what we found was that actually there's a huge agreement between people in terms of what it should be. And this happened to both your listeners and the general sample population. You would take, for example, Republicans and Democrats, and you would think that they would vary dramatically, and they don't, I mean they differ but they don't differ so much. So you take Republicans and they basically agree with Democrats, and you take people with low income versus high income, and they basically agree.

“Ryssdal: Can you quantify what we have right now? I mean, what percentage of people have what percent of the wealth?

“ARIELY: Right now the top 20 percent of the people have about 85 percent of the wealth. People think that they only own 68 percent of the wealth, so people underestimate the inequity, but if you ask them what's kind of an ideal world in the Rawls kind of sense that you would actually want to participate in, they say 33 percent. So they say in an ideal world, we want the top 20 percent to own more than 20 percent, we want them to be wealthier, but we want them to own about 33 percent of the wealth.”

Again, I’d like to quote Warren Buffet: “If there’s class warfare going on in this country, my class is winning.”