A new study by Paul Piff at the University of California at Berkeley shows that wealthy people are more likely to feel entitled and narcissistic. After publishing his results in the Personality and Social Psychology Bulletin, Piff told PsyPost, “there is something about wealth that gives rise to a sense of entitlement, a sense that one deserves more good things in life than others, which in turn gives rise to an increased or inflated sense of self-importance, vanity, grandiosity, and omnipotence.”
This study comes in a series in which Piff tries to isolate the ways that wealthier people differ socially. Last year, Piff published a paper showing that wealthy individuals are more likely to exhibit a number of unethical behaviors. As Piff told New York Magazine last year, “While having money doesn’t necessarily make anybody anything,” Piff says, “the rich are way more likely to prioritize their own self-interests above the interests of other people. It makes them more likely to exhibit characteristics that we would stereotypically associate with, say, assholes.”
Piff makes an important caveat about his research that having money does not necessarily make someone more self-important or more unethical. In many of his results, the causation could go either way or could be caused by a common third factor. Being wealthy may cause someone to become more narcissistic and unethical or, alternatively, narcissistic people who are willing to be more unethical may be more likely to become wealthy, and display wealthy entitlement. However, through some clever experimental design, some of his studies are able to simulate wealth by setting up laboratory situations resembling real wealth, and they find the same dehumanizing results.
In considering these results for the implementation of economic policy, it does not really matter whether the relationship between wealth and entitlement is causation or correlation. Either way, these results make a mockery of the assumptions that underlie our policy.
The first and second fundamental theorems of welfare economics are perhaps the most important justifications for the idea that free market outcomes can reach fair and efficient results. Roughly, the first fundamental theorem shows that all outcomes of a free market are efficient (putting aside the possibility of a market failure), and the second theorem says that any efficient outcome can be achieved by redistribution of allotments. Given the assumptions of a free market, no market failures, and redistribution of allotments, we can expect the economy to produce any fair and efficient outcome that we desire.
This result has been challenged in many ways. Much effort has been given to show that an unregulated market will in fact have market failures that prevent it from behaving as is assumed for a “free market.” This research suggests a different critique. If giving people more wealth is associated with their being entitled and narcissistic, then the entitled wealthy that come out on top of an efficient market outcome will fight to prevent redistribution. Where wealth gives power, the idea that there will be successful redistribution seems a cruel and unrealistic promise to the unfortunate many.
It does not matter whether becoming wealthy creates entitlement or whether the entitled become wealthy, the important point is that the entitled can be expected to fight against redistribution. Even if redistribution is theoretically possible, it will not happen because the wealthy will prevent it from happening.
This result is not radical or surprising. Arguing for inclusive economic institutions that encourage wide participation and economic opportunity, Clark medal winner Daron Acemoglu and James Robinson argue in Why Nations Fail that “Inclusive economic institutions also tend to reduce the benefits the elites can enjoy by ruling over extractive political institutions.” (82–83) By reducing the benefits to power, inclusive economic policies reduce the incentive for the powerful to exclude the masses. The powerful will fight redistribution less when they have less to gain from avoiding it. It is an idea deeply rooted in economic theory.
Piff gives interesting insight into a possible solution. Piff told PsyPost, “simple interventions can reduce narcissism among the wealthy, suggesting their narcissism is neither innate nor fixed. When wealthier participants in one study were asked to think about three benefits of treating others as equals, they subsequently became less narcissistic. Egalitarian values can reduce narcissism. The implications of this are fairly profound.”
This insight is an even stronger challenge of economic policy. It suggests that economics, which is often anti-egalitarian, makes the problem worse by convincing the wealthy that they are, in fact, entitled to their rewards. There is a long literature that suggests that economists are more selfish.
In one study, “There is real debate about whether economics makes people more selfish or whether selfish people are more likely to become economists, but it is clear that economists are less likely to consider fairness in distribution of wealth. If this unusually selfish group of people is predominantly advising on our economic policy, then we can expect less pushback against wealthy interests and less pushback against anti-redistribution policies.”
I want to be careful in my conclusions. I would not go so far as to say that this evidence argues for an egalitarian regime or an abandonment of free-market economic policy. That argument would overinflate the importance of this evidence as compared to years of generally positive economic results. This is not a call for radicalism.
Instead, economists and policymakers should be aware that these factors exist. We should not blindly expect redistribution to happen simply because it is possible. In practice, people lose from economic policies and are not compensated for their loss. Expecting a free market to solve those issues without any intervention is willful blindness that substitutes assumptions for evidence.