Why Are Rich Stingy?

A month ago I suggested that left vs. right political attitudes roughly correspond to forager vs. farmer attitudes:

We acted like farmers when farming required that, but when richer we feel we can afford to revert to more natural-feeling forager ways. The main exceptions, like school and workplace domination and ranking, are required to generate industry-level wealth.

Today I should acknowledge some apparently conflicting data:

Data are from 31 nations and 66,777 individual respondents … In poor countries, but not in rich, most believe that family needs legitimate higher pay. Within countries—particularly English-speaking ones—low SES groups endorse family needs, but high SES groups reject them. (more)

Across 4 studies, lower class individuals proved to be more generous (Study 1), charitable (Study 2), trusting (Study 3), and helpful (Study 4) compared with their upper class counterparts. Mediator and moderator data showed that lower class individuals acted in a more prosocial fashion because of a greater commitment to egalitarian values and feelings of compassion. (more)

Two kinds of processes should interact here, and may work at cross-purposes. While on the one hand humans may be programmed to develop different attitudes when rich, on the other hand some attitudes may be more effective than others at creating wealth. While my forager-farmer hypothesis suggests that humans naturally return to more-forager-like egalitarian attitudes when rich, observed correlations between wealth and egalitarian attitudes should also be influenced whether egalitarian attitudes assist or hinder the accumulation of wealth.

So the above data showing that rich people and nations tend to be less egalitarian could still be consistent with my forager-farmer hypothesis if forager-style egalitarian attitudes tend on average to hinder the creation and accumulation of wealth, relative to farmer-style attitudes. And if this tendency is stronger than the other wealth causing attitudes tendency I postulate. For example, perhaps egalitarian envy discourages entrepreneurial risk, or prevents more efficient ventures from displacing less efficient ones.

Added 10a: Another response is to just consider this to be part of the “main exceptions” clause of my claim – a way in which we do not move to forager ways when rich, because it is central to what makes us rich.

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  • http://entitledtoanopinion.wordpress.com TGGP

    I think you are confused by between-nation differences, assuming they reflect between-individual differences. As Andrew Gelman pointed out in “Red State, Blue State, Rich State, Poor State” richer people really do vote more Republican even if the GOP gets more support from poorer states.

  • http://theylaughedatnoah.blogspot.com Sackerson

    Surely it should be, “Why are the stingy so rich?” – in which case the answer is in the question.

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  • http://hanson.gmu.edu Robin Hanson

    TGGP, the first link looks at nations and individuals, the second at individuals; all show the same sign.

    Sackerson, it seems very unlikely that rich nations are so mainly because they are stingy.

    • http://entitledtoanopinion.wordpress.com TGGP

      These links going against your theory show the same sign. I am saying that you originally developed your theory looking at the World Values Survey comparing nations, and that looking within nations would not lead you to believe rich=left and poor=right.

  • http://theylaughedatnoah.blogspot.com Sackerson

    Sorry, I thought you meant rich individuals.

  • dave

    Many rich people tend to act in a ruthless manner towards society but a very gentile manner towards the people immediately around them. For instance, a wall street banker who donates to the local arts museum, raises “awareness” about various things, and acts very polite to his friends and peers. Acting responsible on a societal scale gets him nothing, while acting in his self interest against strangers nets him great wealth and the social status associated with that. Naturally, he wants to be thought highly by those around him so he acts in a different manner amongst those that would pay no attention to him without the wealth acquired via raping society at large.

  • Doug

    I think this is closely related to a discussion theme I’ve been seeing a lot: assuming the SWPL phenomenon is real and represents the face of the upper class why does so much statistical evidence when looking at wealth, income or class as a variable often contradict. E.g. contrary to the SWPL image, wealthy people tend to be more conservative, rural and more focused on productive economic work.

    One thing to consider is that even if someone is rich there’s a difference in how secure their wealth feels. The typical SWPL tends to be born into a family of money. Even if you have a high income, if you’ve come from a working class background and have built up a career or business where you’re the primary breadwinner you may “feel” less rich than your kid who has always had access to wealth without any work or worry. The former’s “forager” tendencies are unlikely to come out because he probably doesn’t feel as secure in the wealth as his kids. I.e. he can’t drop his farmer values because he’ll feel he’ll lose his farmer level wealth if he does.

    This might be one explanation for why there’s been a shift in the popular conception of rich in the past generation from stodgy country clubs and butlers to hipster apartments in San Francisco/Manhattan and overpriced organic food. Lower social mobility relatively more upper class people today grew up upper class. My contention is that those who have been rich their whole lives are more likely to exhibit your forager tendencies for the above arguments.

    • http://entitledtoanopinion.wordpress.com TGGP

      Are the wealthy really more rural? I’ll have to check that in the GSS. UPDATE: Here are my results.

      You seem to be referencing the “nouveau rich” vs “old money” dichotomy. The “old rich” are actually more conservative. Steve Sailer suggested that a higher ratio of education to income predicts being on the left (and the reverse predicts being on the right). I think that might better fit your stylized facts about children of the upwardly mobile being more liberal than their parents.

  • lemmy caution

    There may be something to the “Protestant work ethic” too. Catholic peasants tended to have a high commitment to egalitarian values plus a surprising number of holidays in the middle ages (about 100 days a year according to this cite: http://library.thinkquest.org/10949/fief/medpeasant.html). This suggests that some “forager” values lasted deep into the middle ages. If the protestant reformers are to believed, the holidays involved a lot of drunkeness and fornification. The catholic peasants sure were not lobbying to get rid of the holidays so that they could work more.

    On the other hand, if you own the land, like settlers in America, working hard all the time makes sense. Also, the gladwell book outliers makes a case that rice farming in china was more work and IQ intense.

  • http://un-thought.blogspot.com/ Floccina

    I can only speak for myself:
    When I was 28 I was in lowest 20% of earners now I am in the top 20% of earners. I find it is harder for me to write a $10,000 check for charity than a $200 check was when I was poorer even though it is a smaller percent of my income.

    Also IMO older people tend to be cheaper and richer.

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  • Karl Hallowell

    Sackerson, it seems very unlikely that rich nations are so mainly because they are stingy.

    Thinking about it, I’d have to disagree. If you’re loose with the public purse and with enforcement of law, then how does the infrastructure that a rich nation needs get built?

    For example, North Carolina used to have for almost 25 years, a State Treasurer by the name of Harlan Boyles. While googling for some supporting evidence, I came across this from his obituary:

    Boyles went to work for the state after college, and his abilities caught the eye of Edwin Gill. When Gill was elected state treasurer, he took Boyles into the office with him. Gill assigned him to find ways to improve the state’s credit rating, and in the early 1960s North Carolina was awarded the highest rating available, AAA.

    When Gill retired, Boyles, then his deputy, ran for the office and succeeded him. That was in 1977, and Boyles remained in the office until he elected to retire in 2001.

    In 24 years as state treasurer, the soft-spoken Boyles won universal respect for his conservative approach to the handling of state money and his wise counsel to governors and legislative leaders. North Carolina maintained its AAA credit rating, saving the state’s taxpayers millions of dollars in interest. The state lost the rating in the year following his retirement. Boyles had warned that state government was growing larger than the tax base could maintain it.

    The obituary was probably written by a relative or friend who shared Boyles’s values. Note the emphasis on Boyles’s advocacy for conservative fiscal policy (ie, stingy fiscal policy) and the AAA rating for North Carolina’s bonds (and why I voted for him all the years I could vote in NC). This guy was stingy and proud of it. In return, the North Carolina government had access to the cheapest credit available. It’s an anecdote that shows a solid correlation between stingy and rich at the government level.

    Another thing to consider is cronyism, which economically is the transfer of other peoples’ resources to a relative or ally. One definitely is not being stingy here, and the result is to make the country poorer through corrupt and inefficient economic transfers of wealth.

  • Karl Hallowell

    BTW, Harlan Boyles was the son of a farmer.