My Beautiful Wickedness

What we believe about money
January 17, 2008, 10:23 pm
Filed under: Uncategorized

Business researchers are stunned — stunned — to find out that people aren’t rational about money.  According to this article in the LA Times

 Would you rather earn $50,000 a year while other people make $25,000, or would you rather earn $100,000 a year while other people get $250,000? Assume for the moment that prices of goods and services will stay the same. 

Surprisingly — stunningly, in fact — research shows that the majority of people select the first option; they would rather make twice as much as others even if that meant earning half as much as they could otherwise have. How irrational is that?

 What in the monkey-fuckin’ hell are they talking about? That’s not irrational. That makes damn good sense, all things considered. Americans do not want to be poor, even relatively so. Being poor sucks because it equates with getting the shit end of the stick politically. It means working while others get to play and waiting while others get to go first. It means being shamed because you’ve failed and blamed when you don’t do things the way that wealthier people might and bossed and ignored. If all things are equal (as the researcher stated in the question), then hell yeah, sign me up for making twice as much as the next guy.  Honest to God, you have to wonder what planet these researchers come from, to act like they’re all surprised that Homo Economicus isn’t really real.   


2 Comments so far
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Not only that, but that construction doesn’t work right. In the country we have now, it does make more sense to want $100,000 than to want $50,000. After all, stuff is expensive. The thing is, their hypothetical measures relative wealth, which is laid out completely different.

In a group where everybody else earned $25,000, and you earned $50,000, then things ought (if we’re going with the whole classical econ thing) be mostly normed around $25,000 incomes. I know they stipulate that things will remain priced the same, but that makes no sense.

I dunno. I would pick the $100k option myself, because I know my needs and $50k would get me the basics of what I want, but wouldn’t leave much of a cushion. (As opposed to the current cushion-negative circumstances, natch.) $100k would leave a cushion and I could count on some of my other privileges (education, community standing, not having kids, etc.) to compensate for the political shafting. But that has nothing to do with anyone else and everything to do with me going over and over the budget.

Comment by Magniloquence

I’d go with the $100k in the hypothetical because it states that prices of goods and services will stay the same, but as Mag notes, that doesn’t make any sense.

In reality, there’s no such thing as wealth outside of relative wealth. Wealth is defined by it’s relationship to the norm.

Comment by dolphin

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