There are lots of obvious reasons to be against extreme income inequality, but here's a new one: It encourages self-deception. A team of nineteen psychologists, led by Steve Loughman and Peter Kuppens, have crunched numbers from around the world, and their paper, " Economic Inequality Is Linked to Biased Self-Perception," published recently in Psychological Science, suggests that "the extent to which people engage in biased self-perception is influenced by the economic structure of their society, specifically its level of economic inequality."
An Unexpected Cost of Income Inequality: Self-Deception
"Mirror, mirror on the wall" (from the Grimm's Kinder- und Hausmärchen, 1857).
Psychologists have long known that people everywhere tend to over-estimate their own good qualities. (The technical term is "biased self-perception.") It's also well-known that citizens of different countries tend, on average, to be biased in their own favor to different degrees. In Japan, for example, people tend to see themselves as average, while here in the U.S., we have a tendency to see ourselves as smarter, nicer, more popular, and more attractive than we really are. (Thus the famous statistic that 80% of us belive we are above-average drivers.) For a long time now, the authors write, the main explanation for this divergence has been cultural: In an individualistic society like ours, the thinking goes, the drive to be unique and independent leads, inevitably, to "self-enhancement." On the other side, they explain, it's often argued that "Easterners [are] more likely to be collectivists seeking interpersonal harmony and belonging."
The numbers in this study, however, suggest a different explanation. The researchers gathered survey data about self-regard from 1,625 people in 15 countries. Participants in the survey were asked to rate themselves on a range of traits, as well as to rate the importance of each trait to other people. (If you rate yourself as being funnier than most people you know, and then explain that funniness is an especially important trait in your society, then you are scoring both a touchdown and a field goal when it comes to "self-enhancement.") When they compared that data to other factors about those countries as a whole -- including values like individualism and collectivism -- they found that only one factor correlated with the degree of bias: economic inequality. In fairly equal societies, such as Japan, Germany, and Korea, people had relatively little self-enhancing bias, while in very unequal societies, like Peru and South Africa, self-enhancing bias was rampant. The United States is roughly in the middle.
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