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Why Scandinavians Care More Than Americans About Inequality

Scandinavia is held up by American lefties as a socialist alternate reality —look at how good statecraft could be! It’s a fantasy that gains urgency when you’re reminded that one-percenters take home 18 to 19 percent of all the income in the U.S., compared with taking in 5 to 8 percent in Scandinavian countries.

Given that gap, you have to wonder why — save for an Occupy Wall Street or two — Americans are so comparatively chill about inequality. It’s a question that a team of researchers at Norwegian School of Economics — Ingvild Almås, Alexander Cappelen, and Bertil Tungodden — recently sought to answer in a cleverly designed discussion paper, highlighted by Alana Semuels at The Atlantic. The research team came to a startling and illuminating conclusion: Maybe Americans and Scandis frame fairness differently, and maybe that’s part of why the two societies are set up so differently.

The researchers recruited over 1,300 participants from Amazon Mechanical Turk and told them that they’d each be given $2 (and possibly more) for completing a handful of short assignments, like unscrambling a sentence and figuring out the “code” within a set of numbers. (In the paper, these were the “workers.”) They also recruited a second group of a thousand people from both the U.S. and Norway to be “spectators” in the experiment. (The researchers thought that the study results could be generalized to include other Scandinavian countries because Norway is so culturally similar to Sweden or Denmark, a point that some Swedes and Danes might contest.)

The spectators were told that, contrary to most surveys, theirs had real-world consequences: It was up to them to divvy up the compensation for the workers, who had been paired off in one-on-one competition on the above tasks. As a default, worker A would get six dollars and worker B nothing. But the spectators could also choose to redistribute the wealth so that worker A received $5 and worker B would get $1, or worker A get $4 and worker B get $2, and on down the line.

The story of why one worker got more money than the other was manipulated in one of three ways: in the merit treatment, the spectators were told that the winnings had originally been distributed in accordance with productivity. In the luck treatment, they were awarded via lottery. The efficiency treatment was the same as the luck, save for one key detail: For each dollar redistributed, the lucky worker would lose two bucks, so the outcomes would be (6,0) or (4,1) or (2,2) or (0,3).

In the light of these conditions, the ways that American and Norwegian spectators assigned the winnings were quite revealing.

Overall, Americans were less likely than Norwegians to divide equally (42 percent versus 63 percent), and more likely not to redistribute at all (32 percent vs. 15 percent). In the luck condition, 53 percent of Americans and 78 percent of Norwegians opted for complete equalization; in productivity, just 15 percent of Americans equalized compared to 35 percent of Norwegians. The efficiency condition, which added a cost to redistribution, only marginally changed the equalization trends for both nationalities.

Semuels, the Atlantic writer, argues that this last point on efficiency may mean that framing the debate on the American welfare state around the cost of redistributing all that cash misses the point. “Costs don’t seem to be Americans’ big hang-up with redistribution,” she writes. “Rather, their opposition seems to go to an underlying acceptance of fate and the fortunes it brings.”

There were a couple demographic differences beyond nationality. Conservatives assigned more inequality in both countries, as did men. Interestingly, spectators’ income had little effect on inequality assignment in either country, though better-educated Americans assigned more inequality.

A final question asked participants about whether a just society equalizes incomes, and the results were diametrically opposed. “The mode among the Americans is to completely agree with the statement that a society should not equalize incomes, while the mode among the Norwegians is to completely agree with the statement that a society should equalize incomes,” the authors write, emphasis theirs.

After doing some statistical analysis, the authors contend that, given the way Americans and Norwegians redistributed the experimental winnings and agreed or disagreed about whether to equalize incomes more broadly, the two cultures have divergent “fairness views.” In both countries, a “meritocratic” fairness view, where differences due to productivity are fair and those due to luck are unfair, was the most popular, with a 38 percent share in the U.S. and 43 percent in Norway. More than double the share of Americans (29 percent) held the libertarian fairness view, where they were fine with the compensation workers received on every treatment, than Norwegians (13 percent). Conversely, double the Norwegians held an egalitarian view — where it’s fair to equalize earnings in both merit and luck — compared to Americans, 36 versus 15 percent.

All this sheds light on the political intuitions that guide votes and policy. If popular political support stems from “fairness considerations,” the authors write, then it’s not surprising that wealth redistribution is normal in Scandinavia and radical in the U.S. The questions of why the two groups hold these intuitions is for political scientists and historians. Scandi socialism has deep roots in what’s called the Jantelagen, or a disdain for being rich, famous, or otherwise standing out. (This is also why when you’re having a cozily hygge time, as is so in vogue these days, you’re not to talk of work, money, religion, or politics.) Meanwhile, American culture is, according to the scale developed by Dutch social psychologist Geert Hofstede, about 31 percent more individualistic than Norway. While Scandinavians wonder about how to fit in, Americans wonder how it feels to be rich.

Why Scandinavians Care More Than Americans About Inequality