Consider this recent experiment by a team of scientists at Caltech, published earlier this year in the journal Nature. The study began with 40 subjects blindly picking ping-pong balls from a hat. Half of the balls were labeled "rich," while the other half were labeled "poor." The rich subjects were immediately given $50, while the poor got nothing. Such is life: It's rarely fair.
The subjects were then put in a brain scanner and given various monetary rewards, from $5 to $20. They were also told about a series of rewards given to a stranger. The first thing the scientists discovered is that the response of the subjects depended entirely on their starting financial position. For instance, people in the "poor" group showed much more activity in the reward areas of the brain (such as the ventral striatum) when given $20 in cash than people who started out with $50. This makes sense: If we have nothing, then every little something becomes valuable.
But then the scientists found something strange. When people in the "rich" group were told that a poor stranger was given $20, their brains showed more reward activity than when they themselves were given an equivalent amount. In other words, they got extra pleasure from the gains of someone with less. "We economists have a widespread view that most people are basically self-interested and won't try to help other people," says Colin Camerer, a neuroeconomist at Caltech and co-author of the study. "But if that were true, you wouldn't see these sorts of reactions to other people getting money."
What's driving this charitable brain response? The scientists speculate that people have a natural dislike of inequality. In fact, our desire for equal outcomes is often more powerful (at least in the brain) then our desire for a little extra cash. It's not that money doesn't make us feel good—it's that sharing the wealth can make us feel even better. "What this experiment demonstrates is that context matters," says Elizabeth Tricomi, the lead author on the paper. "You can completely flip the response of the brain by putting a person in a state of wealth, even if that state is determined by a ping-pong ball."
In reality, of course, we're not nearly as egalitarian as this experiment suggests. After all, the top 1% of earners aren't exactly lobbying for higher taxes or for large lump-sum payments to those on welfare. (Bill Gates is a rare exception. He recently joined his father in endorsing a new income tax on the wealthiest residents of Washington State.)
This is probably because the rich believe they deserve their riches. Unlike the subjects in the study, whose wealth was randomly determined, the top earners in America tend to feel that their salaries are just compensation for talent and hard work. Previous experiments, for instance, have demonstrated that making people compete for the initial payout can dramatically diminish their desire for equal outcomes. The end result is that our basic aversion to inequality—the guilt we might feel over having more—is explained away.
For too long, our political conversation about taxes and wealth has been framed by a set of misguided assumptions. We've assumed that people always want to be wealthier than their peers, that higher taxes are an inevitable source of displeasure. But that's not the case. As the scientists note, culture and context play a decisive role, which is why different countries have such different tax structures, and why even America had a top marginal tax rate of 91% in 1960.
Though neuroscience can't speak to the merits of this public policy debate—economists continue to argue about the impact of taxes on the economy—it should remind us that our response to financial rewards and losses depends on a larger set of shifting beliefs. Do we believe that our riches are deserved? Is America still a land of opportunity? Those are the questions that matter.
