Burn the Rich

A recent study suggests that envy comes naturally.

An old Russian joke tells the story of a peasant with one cow who hates his neighbor because he has two. A sorcerer offers to grant the envious farmer a single wish. "Kill one of my neighbor's cows!" he demands.

Research by two British economists, Daniel Zizzo of Oxford University and Andrew Oswald of Warwick University, suggests there is a good bit of truth behind that joke. In a recent study, Zizzo and Oswald ask, "Are People Willing to Pay to Reduce Others' Incomes?" "The short answer to this question is: yes," they report. "Our subjects gave up large amounts of their cash to hurt others in the laboratory."

Zizzo and Oswald set up an experiment in which groups of four subjects were initially given nearly equal amounts of money. They then played a computerized gambling game. During the game two of the players received an extra endowment of cash, a fact to which all of the players were alerted.

At the conclusion of the gambling sessions, each player was given the chance to spend his own money to anonymously "burn" some of the cash won by his fellow participants. It was made clear that there was no prospect that burning his fellow player's winnings would in any way make him richer. In fact, if he chose to burn another player's money, he had to pay between 2 cents and 25 cents for each dollar subtracted from the other player's take.

Zizzo and Oswald found that nearly two-thirds of players happily paid for the privilege of impoverishing their fellow participants. Even as the price of burning went up, the percentage of people who chose to burn other players did not fall substantially.

Why would people pay to hurt others without any benefit to themselves? Is it not the height of irrationality for a person to harm himself just so he can harm another more? Zizzo and Oswald believe the desire to burn other people's cash "appears to be strong evidence for the existence of some kind of envy or concern for fairness."

The poorest players chose to burn more of the winnings of the wealthiest, but big winners also burned other players, in their case indiscriminately. The researchers speculate that winners may have chosen to burn others as a way of maintaining their rank: They wanted to be first more than they wanted to maximize their cash holdings.

Apparently, it matters a great deal whether people believe that others deserve their good fortune. If they don't believe they do, then less well-off people will further impoverish themselves to bring the rich bastards down a peg or two. Perhaps the opposition in the Senate to eliminating the death tax on estates over $625,000 can be traced to the sense that trust fund heirs are undeserving.

Oswald and Zizzo's findings may be related to those of a study in which two Swiss economists, Ernst Fehr from the University of Zurich and Simon Gachter from the University of St. Gallen, determined that people will incur substantial costs to punish cheaters. Such subjects engage in what the researchers call "altruistic punishment."

Fehr and Gachter set up a public goods game with a common pot in which all the players could invest. After all the players were given an opportunity to invest in the pot, the amount in the pot was increased and then split between all players at the end of each round. The game was set up so that defectors could increase their total winnings by not investing at all, then taking a quarter of whatever was in the pot once the round was over.

In the games in which players had no opportunity to punish defectors, cooperation soon broke down completely and no one invested. But once the ability to punish–say, by fining cheaters–was added, cooperation became widespread. Even if punishers lost more than the cheaters they punished, they still deterred cheating.

It turns out that cooperation depends not just on reciprocity–"I'll scratch your back and you scratch mine"–but also on retribution–"If I scratch your back and you don't reciprocate, I will punish you, no matter the cost to me." The fear of vengeance keeps would-be cheaters in line.

Perhaps players who received extra cash in the game devised by Oswald and Zizzo, analogous to the inheritors of great fortunes, are seen as somehow "cheating." This perception may incite the leveling instincts that apparently lurk within the human heart.

Socialists often claim that capitalism is based on humanity's worst impulses, greed and selfishness, despite the fact that people who live in societies that participate in markets tend to be more generous and cooperative than those who don't. Oswald and Zizzo's research suggests that socialists who believe that their ideology appeals to humanity's better instincts have it backwards. Envy is behind the leveling spirit of socialism. A truly generous and rational soul would wish others well, especially if they have done no one any harm.

Only an open society in which people clearly see that they have an opportunity to rise seems capable of containing and channeling humanity's envy instinct. The task for champions of freedom is to encourage people to want more cows for everybody.