This is Your Brain on Wealth: How Money Hacks Your Brain

For ages when we talk about wealth inequality we focus on the effect it has on the poor. Yet, this video from PBS Newshour, made me reflect this week that perhaps we need to also start talking about how wealth inequality impacts the rich:

The video cites various studies connecting wealth with a lack of empathy for one’s fellow man. For example, one study shows that people with luxury cars are less likely to stop for pedestrians, while another reveals students from wealth are more likely to take candy from children. The results seem to suggest one conclusion: money turns us into less compassionate, more immoral, selfish people.

A study from Harvard University and the University of Utah showed that simply having money on the mind changed the way participants made decisions. One group was given phrases like “She spends money liberally” to get them thinking about money while another group was given neutral phrases like “She walked on grass.” The two groups were then given a slew of tests that determined whether they would engage in immoral behavior such as stealing paper from the school copier or deceiving a friend for financial gain. Those who were thinking about money were more likely to make immoral decisions to the detriment of their social bonds than those who were given neutral phrases. As one researcher concluded, “These findings suggest that money is a more insidious corrupting factor than previously appreciated, as mere, subtle exposure to money can be a corrupting influence.”

Does this mean we are better off living without money? Money allows us to get everything we need without much social interaction. We no longer need to depend on each other to survive. Wealthy people do not need to rely on social bonds. Perhaps this is why upper class people are less able to pick up social cues and exhibit empathy with others who are suffering as found in research from UC Berkeley. “These latest results indicate that there’s a culture of compassion and cooperation among lower-class individuals that may be born out of threats to their wellbeing,” said one researcher describes. While viewing a video showing a family dealing with a child with cancer, lower-class participants were more likely to lower their heart rate, a sign of compassion, while higher-class participants were more likely to remain neutral. “It’s not that the upper classes are coldhearted,” the author of the study said, “They may just not be as adept at recognizing the cues and signals of suffering.”

While I believe there are other ways of transaction that better strengthen social bonds and build community, I think the real problem is not money, but the abundance of it. What concerns me is the skewed perception we have of wealth and those who have it. The changes that occur in the participants are a result of the power we perceive comes with wealth, a greater power than that of our social bonds. Part of this connection between power and wealth is forged by a strong belief in the American Dream. This national fable teaches us we can achieve whatever we want if we make enough money through hard work. It also teaches us that those who are rich must have gotten there through their own hard work, and not a set of advantages they were born with. One study featured in the video above involves a rigged monopoly game where one participant gets an extra dice to roll and double the money of the other players. Even though this participant is far more likely to win the game, when they were interviewed afterward they would attribute their success to their individual skills and talent. They would feel like they “deserved to win” the game.

Our perception that wealth is created solely through hard work doesn’t take into account the many challenges people in poverty have to face that those with money do not. Just as the abundance of money changes the way the mind works, so does the lack of it. Humans have a limited mental bandwith and when our minds our focused on getting our basic needs, we are less able to focus it on other higher orders of thinking.  A study recently  published in Science showed people concerned about making ends meet made worse decisions, were more forgetful, and were less likely to notice things. The impact of poverty is equivalent to losing 13 IQ points. “All the data shows it isn’t about poor people,” one of the researchers said, “it’s about people who happen to be in poverty.” 

The staggering wealth inequality in the United States creates unhappiness not only for the poor but for the rich. Research shows that the happiest countries in the world are those with the most equality. As the saying goes “money can’t buy you happiness.” Happiness comes from both money and from social bonds. The poor lack money to sustain themselves, yet create a strong community. The rich on the other hand maximize their wealth while destroying relationships. The kind of wealth had by the 1% at the top is making no one happier. Not the haves, not the have nots. A study from Princeton showed that after you reached a salary of $75,000, having more wealth didn’t continue to increase your happiness. Having a ridiculous amount of wealth doesn’t really make any one happier and makes rich people into worse human beings, it’s a pretty raw deal for all involved. It’s seems to me like it is time for a new American dream.