Why does rising inequality in a state correlate to swing districts flipping from centrist Democrats to conservative Republicans? And why was that correlation strongest in the South and Midwest? The answer may lie in “a fundamental delusion.” (More)

Inequality and Polarization, Part II: “A Fundamental Delusion”

This week Morning Feature considers the relationship between economic inequality and political polarization. Yesterday we looked at a new state-level study that shows a strong and causal correlation between these two rising trends. Today we explore reasons for the correlation, including the role of conservative religion. Tomorrow we’ll search for solutions to escape the current vicious cycle.

“Especially through the South and middle America”

Yesterday we saw research that shows rising inequality correlates with wider partisan polarization in state legislatures, because centrist Democrats in swing districts are replaced by conservative Republicans:

“As the Democrat party [presence in state legislatures] has shrunk nationally over the course of the last 15 years, the disproportionate effect has been the replacement of moderate Democrats with Republicans, and that has tended to happen most often in states with high levels of inequality, or where inequality is growing the fastest,” [political science professor Nolan] McCarty said.

The map below, which shows the percentage of seats held by Republicans, illustrates how that has happened. The percentage of seats held by Republicans has increased, especially through the South and middle America, since 1997:

But why does higher inequality in a state lead voters in swing districts to elect conservative Republicans? Shouldn’t those swing district voters elect progressive Democrats to redress the rising inequality?

“Financial security is strongly correlated with nearly every measure of political engagement”

Part of the answer lies in how inequality changes the makeup of the electorate. Most states hold state legislative elections in non-presidential years, alongside federal midterms or in state-only, odd-year elections. And a 2015 Pew Research study found that financially insecure people are far less likely to vote:

When it comes to choosing a party’s candidate in the voting booth, one pattern in modern American politics is so familiar it has become a truism: the rich vote Republican, the poor vote Democratic. And while the reality of the situation is much more nuanced, in broad strokes it has been the case that Republicans have consistently garnered disproportionate levels of support from the financially well-off, while the least financially secure Americans have been significantly more likely to back Democrats.

But a new analysis of Pew Research Center survey data collected in the fall lead-up to the 2014 midterm elections finds that at least as striking is the degree to which those who are financially insecure opt out of the political system altogether, and how that opting out disproportionately affects Democratic support.

Financial security is strongly correlated with nearly every measure of political engagement. For example, in 2014, almost all of the most financially secure Americans (94%) said they were registered to vote, while only about half (54%) of the least financially secure were registered. And although 2014 voting records are not yet available, pre-election estimates suggest that 63% of the most financially secure were “likely voters” last year, compared with just 20% of the least financially secure.

This pattern is not unique to 2014. Looking back at voting records from four years earlier, 69% of the most financially secure cast ballots in the 2010 midterm, while just 30% of the least financially secure did so.

Rising inequality correlates to more widespread financial insecurity. In a low-turnout state election, that alone would yield a more Republican-leaning electorate. But most states also hold state legislative elections in presidential years, so why don’t those swing districts flip back to Democrats?

“They try to ignore, reinterpret, distort, or forget it”

One reason lies in how voters view rising inequality. While progressives see rising inequality as a problem in need of correction, many others see it as just rewards for hard work or just punishments for laziness, as Roland Bénabou and Jean Tirole explain in their 2006 paper “Beliefs in a Just World and Redistributive Politics,” published in the Quarterly Journal of Economics:

International surveys reveal striking differences between the views held in different countries concerning the causes of wealth and poverty, the extent to which individuals are responsible for their own fate, and the long-run rewards to personal effort. American “exceptionalism,” as manifested by the widely held belief in the American Dream, is but the most striking example of this phenomenon. At the same time, ethnographic studies of the working and middle classes reveal that people do not come to these views as dispassionate statisticians. On the contrary, they constantly struggle with the cognitive dissonance required to maintain and pass on to their children the view that hard work and good deeds will ultimately bring a better life, that crime does not pay, etc., in spite of signals that life may not always be that fair. Psychologists have similarly documented the fact that most individuals feel a strong need to believe that they live in a world that is just, in the sense that people generally get what they deserve, and deserve what they get. When confronted with data that conflicts with this view they try to ignore, reinterpret, distort, or forget it – for instance, by finding imaginary merits to the recipients of fortuitous rewards, or assigning blame to innocent victims.

Bénabou and Tirole note the wide gulf between “American” vs. “European” cultures and economies. Surveys show that only 29% of Americans believe “the poor are trapped in poverty” and only 30% believe that “luck, rather than effort or education, determines income.” Conversely, 60% of Europeans believe “the poor are trapped in poverty” and 54% believe “luck, rather than effort or education, determines income.”

So Americans have a higher Belief in a Just World (BJW), while Europeans have a lower BJW. Not surprisingly, Americans also pay less in taxes and have a much weaker social safety net. And when inequality rises, Americans are more likely to attribute that to individual rather than structural factors – those getting wealthier must be smarter and work harder, while those left behind must be lazy – because of that higher Belief in a Just World.

But … again … why do Americans hold a higher BJW?

“A theory of collective beliefs”

Bénabou and Tirole explore the commonly-held ‘propaganda’ theory that the wealthy dominate U.S. media and schools, and foster the belief that personal wealth mirrors personal worth. Conversely, the ‘propaganda’ theory says, leftists and unions dominate European media and schools, and foster the belief that personal wealth reflects luck rather personal worth. Bénabou and Tirole find only limited evidence for that theory.

Instead, they propose that BJW arises from an interplay of individual and cultural experiences. Indeed they offer a rigorous mathematical model which, they say, predicts both the “American” and “European” cultures and economies, and also what changes would cause sudden realignments of the prevailing BJW. Their model correlates well with the evidence they offer, but they note that more research is needed. Still, they conclude:

Is the “American Dream,” according to our theory, but a myth, a self-sustaining collective illusion? The answer is more subtle than a simple yes or no. While the Belief in a Just World equilibrium does (in the benchmark case) involve more overestimation of the extent to which people ultimately get what they deserve, can go from rags to riches, etc., net incomes are (as a result) truly more closely tied to merit than in a more redistributive “Realistic Pessimism” equilibrium. Moreover, what really matters is not which set of beliefs is more accurate but only that there be more optimism, or less pessimism, in the American than in the European equilibrium. This endogenously shared ideology can also have important growth and efficiency benefits, including improving people’s motivation to effort. Its net value to the poor is much more ambiguous, since they receive less transfers and are more likely to be stigmatized.

More generally, our model provides a theory of collective beliefs, based on endogenous complementarities between individuals’ cognitive choices that arise very naturally from the interplay of well-established psychological motives and economic rationality.

Translated from econ-speak: the ‘American Dream’ yields somewhat higher net per-capita productivity but a much weaker social safety net, while the ‘Realistic Pessimism’ of Europe yields somewhat lower net per-capital productivity but a much stronger social safety net. Both belief systems are predicted by a model grounded in psychology and behavioral economics … and each belief system produces a cultural equilibrium that seems to confirm its truth.

“A fundamental delusion”

Bénabou and Tirole cite Michael Lerner’s 1980 book Belief in a Just World: A Fundamental Delusion, as do most other academics who research Just World theory. Lerner argues that we develop our Belief in a Just World in childhood, and it persists as we get older, despite experiences of injustice:

The discussion that follows begins with the observation that the dominant view among contemporary investigators is that most adults have outgrown the childish belief they live in a just world (BJW). These BJW investigators have also assumed that one can assess the vestigial remnants of that belief as a stable meaningful individual difference variable. Beginning with the question of why this view of BJW has prevailed over the initial theory and research that portrayed BJW as a “fundamental delusion,” I will raise and attempt to address several basic issues. Among these are whether, in fact, adults give up their BJW or merely employ various ways to maintain it in the face of contradicting evidence, and to what extent BJW actually influences people’s lives. After reviewing relevant evidence and contemporary theories, I will offer evidence to the effect that people actually maintain and express the effects of two forms of BJW: One involves consciously held conventional rules of morality and rational social judgments, while the second is characterized by preconscious processes with primitive rules of blaming and automatic emotional consequences.

Lerner, Bénabou and Tirole, and other researchers have consistently found a strong correlation between BJW and religious belief and specifically the “Protestant Ethic”:

The belief in a just world has much in common with central tenets of the Protestant Ethic. Mirels and Garrett (1971) developed a Protestant Ethic scale, with high scores reflecting an emphasis on hard work both as a value in its own right and as a key to success. For 117 male undergraduates, scores on the scale were related positively to authoritarianism and to the expectancy for internal control of reinforcements. […] In support of the hypothesis that people who espouse the Protestant Ethic also tend to believe in a just world, MacDonaId (1972) found that college students who scored high on the Protestant Ethic Scale were significantly more likely than low scorers to derogate social victims, agreeing for instance that “most people on welfare are lazy.”

Thus we return to McCarty’s data showing that rising inequality has led to greater polarization, by flipping swing districts from centrist Democrats to conservative Republicans. McCarty and his research partners found that effect was strongest in the South and Midwest. Those regions are where the ‘Protestant Ethic’ is most culturally dominant, and thus where you would expect to find higher Belief in a Just World.

Add that together with the impact of rising inequality on voter participation, and the result is a political pattern that makes perfect sense. Tomorrow we’ll talk about how to break the cycle.


Photo Credit: Getty Images/iStockphoto


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