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Is it best to be greedy in tough economic times?

Rodolfo Mendoza-Denton, professor of psychology | February 10, 2012

There’s a certain logic to the idea that greed is good when resources are scarce: when there’s not a lot to go around, what could be better than hogging the goods for oneself to ensure one’s survival?

If this logic were to hold true, one would expect natural selection to have favored self-interested behavior as a response to a lack of resources. In fact, however, new research seems to suggest just the opposite. My colleagues at Berkeley (Piff, Kraus, Cote, Cheng, and Keltner, 2010) have found that across many indexes of self-interest, those with fewer resources choose a strategy of sharing their limited resources with others. In one striking example, the researchers (which include Berkeley’s own Michael Kraus, I should point out– check out his blog) had upper- and lower- class individuals play a simple economic game, in which generosity could be measured directly by the amount of money that participants decided to give to an anonymous game partner at their own expense. Lower class participants allocated more of their money to their anonymous partners than did upper class individuals, who kept more for themselves.

These data are in line with national survey data showing that, relative to their income, lower class individuals give more to charitable causes relative to their high class counterparts. This is a striking finding, particularly because in an experimental study in which participants were induced to compare themselves to people higher versus lower than them in social class, the researchers found greater support for charitable causes among participants who had been induced to compare themselves to those higher in social class than they. Thus, something about being “lower on the ladder” seems to draw out a motivation to share, rather than hog.

Avarice by Pieter Bruegel the Elder

Avarice by Pieter Bruegel the Elder

What is it about a lack of resources that reduces self-interest and greed? The logic of the researchers is as follows: when people have few resources, they are in a position of being more vulnerable to the whims of the context or the environment. Thus, when resources are not secure, people may actually be more motivated to strengthen their social connections, fostering a host of psychological processes that include trust, compassion, and empathy. By contrast, when one is relatively resource-rich, one has the luxury of focusing on oneself, and feeling that others don’t matter as much. Psychologically, this focus on the self reduces attention to the needs and even the emotions of others. Paradoxically, then, greater resources may make self-interested and even greedy behavior more likely.

Historicallly, science has tended towards a fascination with the darker impulses of life, such as anger, aggression, and greed, and relegated more positive conditions such as love and altruism to the hopey, gooey world of non-scientists. As my colleague Dacher Keltner argues in his book “Born to Be Good,” however, there is now growing evidence for the importance of cooperation and compassion in many different social animals, with “sticking together” making survival significantly more likely than the strategy of “dog eat dog.”

Isn’t it amazing to think that the key to human survival may not have been our tendency towards aggression, territoriality, and greed, but rather our tendency towards compassion, altruism, and trust?

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Copyright 2012 by Rodolfo Mendoza-Denton; all rights reserved. Cross-posted from Psychology Today.

Comments to “Is it best to be greedy in tough economic times?

  1. Over the winter holidays my family and I took a vacation to New Mexico and decided to visit a Native American pueblo north of Albuquerque. We were surprised to find such stark differences in living conditions just a few miles from an affluent US city (the pueblo reminded me of the village sojourns of my childhood in Pakistan).

    After a few minutes of walking around the village (we were looking for the kiva which was the venue for that day’s “dance”) we were beckoned by a local woman who invited us to come inside the house of the “newly appointed lieutenant governor” and have some food. After many years of living in the US and having internalized the prevalent social norms, my wife and I were quite hesitant to accept a stranger’s invitation to come into a house and share a meal. Nevertheless, perhaps caught off guard, we relented and entered the small house.

    The house was full of people sitting around the living room (almost all locals Amerindians), some talking in low voices and some just sitting quietly. We were welcomed by another woman and taken to an adjoining room with a long dining table laden with food and with a mix of young and old sitting around it. Spaces were quickly vacated for the five of us, and we were told repeatedly but politely, “Please eat. There is plenty of food.” After about ten minutes, we thanked whoever we thought might be one of the hosts and asked for our leave. As we left, the woman told us, “Come back for lunch. Please come by again.”

    This unexpected act of hospitality left a strong impression on us, and I later remarked to my eldest daughter that in our much richer Bay Area suburb this sort of act of hospitality towards strangers or even neighbors would be unheard of and perhaps even considered strange. This was a uniquely positive experience for my daughters, but for me it was also reminiscent of an earlier time in different place.

  2. One reason is that upper class Americans are not more charitable is that they are already giving 50% or more of their income to the government and already feel they are doing more than their fair share to support the welfare state already. Statistics show that the top 5% of earners are already paying over 50% of the total tax burden.

    At any rate, I just met today with someone who actually runs a non profit and he is telling me the exact opposite is true — the affluent are much more likely to support his foundation. So I’m going to believe someone who actually is working in the real world as opposed to some theoretical study. I also think that these studies are funded and conducted by people who are looking for a result and inevitably come up with a predetermined conclusion in order to further their ideological prejudices. So if you look at what the sum total of what the wealthy are giving the figures would show that they are already contributing more than their fair share.

    The real intent of these studies is to discredit free market, laissez-faire economic policies and those like myself who believe in them. Those people advocate socialism and basically want to run our lives. You always have to look at the biases of the people who conduct research and what the logical conclusions are their so-called findings. Usually more government intervention, less economic freedom and continuation of the same welfare state policies that driving us into the ground. If you want to find out what the future of our society holds look at Greece since that is exactly where we going.

    • @Tea Party Rocks:
      Do you know what Roger Ailes and Mitch McConnell are doing while they wait to tee off?
      They’re laughing about you. You’re the one keeping their nests feathered.

      The American people know in their guts that when the next Katrina happens we don’t want Republicans in charge of the recovery.

      I would also add that you always have to look at the biases of the people who post anonymously and their so-called conclusions, especially when we know that various unscrupulous agencies mount massive organized astroturf campaigns to make it appear as though real Americans actually believe in policies that go against their interests and conflict with their moral character. We the people know better than to fall for this kind of craven scheming.

      • The real problem I have with you Mr. Rosenzweig, is that you cannot respond in a manner that is logical, based in facts or even relevant to the discussion. Please try harder to come up with worth spending my time refuting, so far you are making this too easy.

        • “Tea Party Rocks” isn’t even astroturf. I bet it’s either a re-purposed telemarketing firm or perhaps even computer-generated catch phrases like a promotional smartphone app intended ‘for entertainment purposes only’.

          They think the American people are all idiots because they assume other people are no different from themselves. Most people know better than to buy what they’re selling. Do you imagine for a moment that Roger Ailes eats his own cooking? That Restore Our Future (oxymoronic!) cares about anything more than the almighty dollar? Remind yourself of Dick Cheney’s jawline and you’ll know in your gut how to cast your ballot.

  3. Has any research looked at the role of how people feel about luck in this context? Or superstition? Or karma? Or, heaven forbid, tax breaks for charitable donations?

    It’s not that I think people aren’t capable of rising above self-interest, but does your definition of self-interest include that of someone who gives to a panhandler because they’ll feel bad about it if they don’t and know that that bad feeling will ruin their day?

    Also, people can be greedy for self-affirmation (and public affirmation) as a generous person.

    I guess I’m asking for the definitions of “self-interest” and “greed” that were used in the research.

  4. I was just today having a long discussion with a friend about the true story of a homeless man who found (my friend’s good friend’s parents’) wheeled cart with laptop, expensive headphones, and other hi-tech gear. The parents had left it in a parking lot near Alta Bates Hospital; they are old and ill and under very significant stress.

    The man who found it was unable to get the local police to take him seriously, so he wheeled it from Alta Bates to the UC Campus, where he knows the cops (for the non-Berkeley folks, this is most of a mile). The UC cops took it and were able to identify the owners and return it. The owners provided a reward for both the finder and the cop who found them.

    I think stories like these are much more common than we hear.

  5. Great confirmation of the fact that if the republicans win in 2012, then humanity is doomed.

    Whereas, if the democrats win the presidency and dominant majorities in both the house and senate, then there is hope for humanity.

    Then all we have to do is solve the world’s out of control population, resources (healthy food, clean water, etc.), climate changes, diseases, animal and plant species losses, brain limitations (Us/Them dichotomies), then there shall truly be more hope than ever before in history for the survival of our civilization.

    That is, assuming that Berkeley professors and scholars have implementable solutions to all these threats when the democrats take control of Washington in 2012.

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