In light of the recent news on the huge bonuses that Wall Street investment bankers are taking home this year, I decided to reflect on what “wealth” means to me.
Interestingly enough, I came upon this little snippet from economist Dr. Wheelan that sums up a study on how American’s percieve wealth.Â It isÂ amazing to me how we think about money and how competitive we, as a society, are…
There’s a very interesting strain of economic research showing that our sense of well-being is determined more by our relative wealth than by our absolute wealth.
In other words, we care less about how much money we have than we do about how much money we have relative to everyone else. In a fascinating survey, Cornell economist Robert Frank found that a majority of Americans would prefer to earn $100,000 while everyone else earns $85,000, rather than earning $110,000 while everyone else earns $200,000.
Think about it: People would prefer to have less stuff, as long as they have more stuff than the neighbors.
The point — and this is still a nascent field — is that a nation may be collectively better off (using some abstract measure of well-being) with a smaller, more evenly divided pie than with a larger pie that’s sliced less equitably. Reasonable people can and should argue about that.
This is a sad, but revealing, story about our culture.Â It seems that it really isn’t about money, but being perceived as “better” or “richer” than someone else that is the holy grail.Â Sad. Very sad indeed.