Friday, March 22, 2013
How Much Is Too Much?
One of the things the Bible is very clear about is that a large gap between poor people and rich people is not a good thing. As Paul wrote to the church in Corinth, recalling the story of Manna in the desert, the goal is a society in which “the one who had more did not have too much, and the one who had less did not have too little.” In the parable of the rich man and Lazarus, Jesus is telling a story that is not meant to be taken literally, but he places responsibility on the rich man to do something about the divide between those who have nothing and those who are able to dress well and feast “sumptuously every day.”
But the Bible does not give much guidance on what sort of income gap is acceptable.
Dan Ariely of Duke University and Michael Norton of the Harvard Business School recently published an interesting study, asking a random sample of 5,500 Americans which of three possible patterns of wealth distribution would be best for the country.
In one pattern, the wealth was divided equally. The bottom fifth had 20% of the wealth, as did the top fifth, and each of the three fifths in between.
Another pattern, represented the current situation in the United States, where the bottom fifth has just .1% of the wealth (one tenth of a percent), and the top fifth has 84%.
The third pattern showed the income distribution in Sweden, where the bottom fifth has 11% of the wealth, and the top fifth has 36%.
Of course, the participants were not told that two of the distributions represented real countries, and they were not told that one was the United States and the other was Sweden. Without knowing what the countries were, over 90% preferred the pattern in Sweden to the pattern in the United States. And this was true of Democrats and Republicans, Conservatives and Liberals. It was also true of people in every income group, from the bottom to the top. With small differences among the groups, almost everyone wanted to live in a country where the wealth is more evenly divided.
Ariely and Norton asked two more important questions.
They asked participants what they believed the wealth distribution in the United States was right now. On average, they believed that the top fifth had 59% of the wealth.
And they asked participants how much the top fifth should have, and on average they responded that the top fifth should have just 32% of the wealth. On average they believed that the poorest fifth should have 11% of the wealth.
In other words, the average American thinks that the richest Americans should have much less and the poorest Americans should have much more. And the average American would rather live in Sweden in terms of income distribution, but believes that even there the gap is too much.
The study also revealed (no big surprise) that Conservatives and Liberals have very different ideas about what we should do in order to move toward a more equitable distribution. But at least we agree on the goal. I count that as a win for the Jesus and Paul and the Hebrew prophets.