We’ve been brainwashed

stiglitz rectIt's no accident that Americans widely underestimate inequality. The rich prefer it that way

By Joseph E. Stiglitz — From: Salon

This article was adapted from the new book The Price of Inequality

How, in a democracy supposedly based on one person one vote, could the 1 percent could have been so victorious in shaping policies in its interests? It is part of a process of disempowerment, disillusionment, and disenfranchisement that produces low voter turnout, a system in which electoral success requires heavy investments, and in which those with money have made political investments that have reaped large rewards — often greater than the returns they have reaped on their other investments.

Misperceptions

There is another way for moneyed interests to get what they want out of government:

. . . convince the 99 percent that they have shared interests. This strategy requires an impressive sleight of hand; in many respects the interests of the 1 percent and the 99 percent differ markedly.

The fact that the 1 percent has so successfully shaped public perception testifies to the malleability of beliefs. When others engage in it, we call it “brainwashing” and “propaganda.” We look askance at these attempts to shape public views, because they are often seen as unbalanced and manipulative, without realizing that there is something akin going on in democracies, too. What is different today is that we have far greater understanding of how to shape perceptions and beliefs — thanks to the advances in research in the social sciences.

It is clear that many, if not most, Americans possess a limited understanding of the nature of the inequality in our society: They believe that there is less inequality than there is, they underestimate its adverse economic effects, they underestimate the ability of government to do anything about it, and they overestimate the costs of taking action. They even fail to understand what the government is doing — many who value highly government programs like Medicare don’t realize that they are in the public sector.

In a recent study respondents on average thought that the top fifth of the population had just short of 60 percent of the wealth, when in truth that group holds approximately 85 percent of the wealth. (Interestingly, respondents described an ideal wealth distribution as one in which the top 20 percent hold just over 30 percent of the wealth. Americans recognize that some inequality is inevitable, and perhaps even desirable if one is to provide incentives; but the level of inequality in American society is well beyond that level.)

Not only do Americans misperceive the level of inequality; they underestimate the changes that have been going on.

Only 42 percent of Americans believe that inequality has increased in the past ten years, when in fact the increase has been tectonic. Misperceptions are evident, too, in views about social mobility. Several studies have confirmed that perceptions of social mobility are overly optimistic.

Americans are not alone in their misperceptions of the degree of inequality. Looking across countries, it appears that there is an inverse correlation between trends in inequality and perceptions of inequality and fairness. One suggested explanation is that when inequality is as large as it is in the United States, it becomes less noticeable — perhaps because people with different incomes and wealth don’t even mix.

Reprinted from The Price of Inequality by Joseph Stiglitz. Copyright © 2012 by Joseph Stiglitz.

Winner of the 2001 Nobel Memorial Prize for Economics, Joseph E. Stiglitz is the best-selling author of  "Making Globalization Work;  Globalization and Its Discontents";  and, with Linda Bilmes,  "The Three Trillion Dollar War."

He was chairman of President Clinton's Council of Economic Advisers and served as senior vice president and chief economist at the World Bank.  He teaches at Columbia University and lives in New York City.

More Joseph E. Stiglitz

More in this category: « Brainwashing
Layouts
Colors