Given the chance to redistribute wealth, neither rich nor poor in a new academic study are all that interested. Americans don’t seem that fired up about the income gap between the 1% and the rest of us.
The study, penned by political scientists at Stanford, Washington University in St. Louis and St. Gallen Universiy in Switzerland, comes at a time when the income gap between the richest and poorest Americans is at its widest since The New Deal, according to the Motley Fool.
Voters in modern democracies like the U.S. and Germany have long held the power to take from the rich, give to the poor and erase the economic inequalities that separate the vast majority of citizens from its super-wealthy elites.
In this study, a randomized and representative sample of about 5,000 adults in Germany and the U.S. was given the chance to play Robin Hood by redistributing funds on Amazon gift cards in the amounts of $25, $50 and $75.
But respondents from both countries chose to redistribute just 12 percent of the funds to make up the economic gap between themselves and the “other” cardholder, whether they were richer, poorer or when their gift card had the same amount as the other’s.
“Participants in our experiment were willing to tolerate a considerable degree of inequality even in a setting where they have full control over the final distribution of wealth and there are no costs of redistribution,” study co-author Michael Bechtel, associate professor of political science in Arts & Sciences at Washington University in St. Louis said in a news release.
The study, which is among the first to examine how individuals change the distribution of wealth when confronted with clear-cut cases of economic inequality, will be released in the newest volume of “Proceedings of the National Academy of Sciences.”
The experiment worked like this. One respondent was paired off with another and randomly given one of three scenarios: 1) You're rich, the other is poor (you got $75 card and the other got $25). 2) You're poor, the other is rich (reverse). 3) Equality (both assigned $50 gift cards).
In all three scenarios, everyone had the option to give or take as much as they wanted using a slide bar to transfer funds to or from the other card, but only 12 percent of the funds in the cards was ever moved. That only made up for about 20 percent of the wealth gap between the two cards in scenarios 1 and 2.
“Our findings show that when individuals are exposed to inequality and given the chance to equalize wealth, many still refrain from doing so,” Kenneth Scheve, a professor of political science at Stanford University and study co-author said in the release. “We also found that this behavior predicts in meaningful ways whether an individual supports heavy taxes on the rich and the provision of welfare benefits for the poor.”
Even when the “poor” respondent had the power to transfer every cent of the “rich” respondent’s card over to theirs, most only took a small fraction of the funds available to them.
What’s more, when questioned more about the game, the authors found that the people most likely to take funds from a wealthier cardholder are often unwilling to pass their own funds along to a poorer cardholder. Conversely, people most willing to share their money with poorer cardholders are less likely to take funds from those richer than themselves.