Bryan Caplan  

Move Over, Milgram

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In Stanley Milgram's famous Obedience to Authority Study, subjects were led to believe that they were giving another human being electric shocks. Many administered what they believed was a lethal dose, just because a man in a white coat told them to. The result is fascinating, but you've got to admit that the experiment was pretty twisted.

Last night, on the Class Action website, I came across a description of an experiment that strikes me as similarly twisted. But in this case, the subjects knew what they were getting into. In fact, they designed the experiment themselves! The background:

We are a group of six men and women-originally eight-from different class backgrounds who have been meeting over the past three years to talk intimately about our experiences with class and money... We are a laboratory group for one another, doing research on ourselves in hopes of being better organizers in our social change work and of sharing what we learn about bridging the class divide with others down the road.

Their first notable experiment:

In our first year, we held a two-day retreat, during which time we revealed to each other our total financial worth-bank accounts, portfolios, cars, houses, debt, and potential inheritances: all of our assets and debts. This was a very scary exercise, and we had to do much work to create safety for this sharing. The people of wealth, in particular, felt apprehensive about this process, so we took time to go around and put up on newsprint all the projections that each of us thought people from the other class backgrounds might feel about us.

Results?


The person with the most money had four times more than anyone else and so grappled with a sense of isolation even from fellow wealthy caucus members. A woman from a working-class background, by working multiple jobs, had managed to save a fair amount of money, and another member of the working-class/poor caucus was shocked by the amount. Another woman struggled with the shame she felt about having so much debt, even though it was her huge, unavoidable, and class-related health care bills that had put her in that position.

But they decided to go further. Next experiment:

Following the retreat, we decided to wade into even more revealing territory: telling each other exactly how much we had spent the previous year, and on what. This was an even scarier exercise for some, because all kinds of desires are exposed in one's check register or Quicken files. Although we are not personally responsible for our inheritances, or our lack thereof, we are all responsible for our spending choices. It was also painful to witness how unmindful or mindful we are with money. For example, one wealthy woman could not account for $8,000 that she had withdrawn from her ATM, while a woman in the working-class/poor group reported that she feels compelled to write down every cent she spends, since she needs to know exactly where she stands. Some of the folks from working-class/poor backgrounds found it hard to hear the amounts spent by people of wealth on self-care, from travel to massages.

I'm shocked, simply shocked! As Dr. Marvin Monroe said, "Well, my theory is that the subject will be socially maladjusted and will harbor a deep resentment towards me."

These experiments could probably ruin the friendships of eight people with identical incomes. To run them in an economically mixed group must have taken true masochists. Of course, the claim is that this was a great learning experience, but sounds more like a maniacal effort to cultivate envy and guilt. Why couldn't they have tried Gratitude Journals instead?


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COMMENTS (4 to date)
Matthew Cromer writes:

Perhaps these people are discovering that who they really are -- their real worth -- has absolutely nothing to do with how much money they have or what they spent it on, no matter how foolish or wasteful. And that is a priceless lesson that most people haven't begun to learn yet.

Thomas B writes:

sounds more like a maniacal effort to cultivate envy and guilt

I thought economists, especially those with a libertarian bent, were in favor of perfect information. But you seem to resent this project, so I'm confused.

Learning facts about how other people manage money might induce guilt. And that guilt might alter behavior. But is it clear such hypothetical behavioral modifications are inefficient? Generally, more facts lead to better decision making. Why do you believe this is an exception?

If I learn that people can get by spending far less than I do, I might more fully realize the marginal utility of money, and spend my time more efficiently as a consequence (whatever "more efficiently" means in my case).

On the other hand, if I am more intimately acquainted with the precise rewards associated with pursuing different skill sets and career choices, and if *real* people I know achieve those awards, it might motivate me towards more productivity.

This sounds like a great exercise in spreading information our social taboos usually keep secret. In the aggregate, information is directly correlated with efficiency. If there's a coincidental increase in equality alongside the increase in efficiency, then what a happy surprise.

This seems like a libertarian dream experiment, so my apologies. I'm either overemphasizing your disapproval, or don't understand it.

liberty writes:

I must be the only one who just thinks it sounds kind of boring. I am not embarrassed by how much money I have now - nor how little I have had at other times - nor what I spend it on. I think I would feel completely comfortable telling it to people who have both more and less. I certainly don't care how other people spend their money.

I don't think it ought to create envy or guilt in anyone - you have to be pretty twisted, in my opinion, to think that it should or that it makes sense if it does or that it would be bound to.

Harping on it and encouraging people to feel envy or guilt is wrong. Locking people into small quarters and forcing them to judge others and vote unanimously to grant one person a large sum of money (as they do on reality shows) is twisted and wrong.

Having people talk about how they spend their incomes and how much those incomes are just sounds like a experiment in boredom and accountancy.

I would feel much more passion and envy - and most of all curiosity - learning about the interesting talents, careers and children that some of those people probably have. Their money doesn't spark anything in me.

Half Sigma writes:

I read the PDF, and they seem to have come to the amazing conclusion that it's a lot better to be rich than to be poor.

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