‘Can’t money buy many things?’ , Photo credit: Getty Images/iStockphoto
Little wonder that Bernie Sanders, in his book, it’s okay to be angry about capitalismFree capitalism has been blamed for unprecedented levels of income and wealth inequality. A Vermont senator recently came up with a radical idea: The US government should confiscate 100% of any money that Americans make over $999 million. “I think people can make it on $999 million. I think they can survive just fine,” he said.
But who says having money is just for “survival”? Doesn’t money buy many things? Take “happiness” for example. Daniel Kahneman and Angus Deaton, economics Nobel laureates in 2002 and 2015 respectively, estimated in 2010 that there is a steady increase in happiness with income up to an annual income of $75,000, but beyond that point a monetary “plateau of happiness”. ” Was.
Matt Killingsworth of the University of Pennsylvania, however, found no evidence of such a plateau. According to their 2021 study, money improves health. Recently, in an “adversarial collaboration” Kahneman, Killingsworth and Barbara Mellors re-analyzed the experience sample data and discovered that the flattening pattern affected only the 20% of the population who were least happy. One could certainly argue that by “happiness” he meant “well-being”.
money and influence
Does the power of money end here? Wealthy people can have a lot more influence on policy changes in many places than one might realise. But where’s the proof?
In a recent work that was published in April british journal of political scienceMikael Persson and Anders Sundel, two Swedish researchers from the University of Gothenburg, showed that having money increases your chances of achieving your goals. They examined survey data on the preferences of nearly 3,000 policy proposals from 30 European countries during a 38-year period, including information on whether each policy proposal was implemented. Policy proposals cover topics such as welfare, immigration, foreign policy and the environment. In all but two European countries, they found that the wealthy are more likely to get what they want from policy and politics during consecutive decades. Now, this is an evidence-based conclusion, at least. The average proportion of wealthy households supporting the policies was 57.1%, compared to 53.7% for low-income households. It is interesting that there was no evidence that changes in gender equality were associated with economic inequality, campaign finance regulations, voter turnout, or union density.
policy results and prosperity
This was already known in the American context. Political scientist Martin Gillens found in his seminal 2012 study that actual policy outcomes in the US strongly reflect the preferences of the most affluent but show little correlation with the preferences of poor or middle-income Americans. Many believe that significant economic transactions between wealthy individuals and the political elite in the US can create a link that influences politicians to act according to the views of the wealthy. For example, Nobel Prize-winning economist Paul Krugman said in an opinion piece in The New York Times in 2020, that the wealthy have historically dominated campaign contributions in the US, which correlates with their influence in policymaking.
Then, in a paper published in 2014 in the journal Perspectives on Politics, Martin Gillens and Benjamin I. Page examined a data set that included measures of key variables for 1,779 policy issues and found that average citizens and mass-based interest groups have little or no independent influence, representing economic elites and business interests. Organized groups of doers do. However, neither majoritarian electoral democracy nor majoritarian pluralism was supported by the results; Only the hegemony of the economic-elite and the principles of partisan pluralism did.
Paul Krugman in “Why Do the Rich Have So Much Power?” In the opinion piece. “Tax rates on corporations and high incomes have been slashed, unions have been crushed, the minimum wage, adjusted for inflation, is lower than it was in the 1960s. How is that possible?” Krugman thinks.
in Europe
Well, is campaign contribution the only factor? certainly not. In an egalitarian welfare state such as Sweden, where campaign contributions are generally low, Mikael Persson also looked at the relationship between public opinion and policy and found that citizens with higher incomes continue to receive the most policy accountability. Studies from Germany, the Netherlands, and Norway, influenced by Gillens’ work, came to similar conclusions.
,[O]They may get the impression that policy outcomes are similar to the toss of a coin – essentially random,” Persson and Sundel said in the European context. “But an imbalance remains: For some reason, the coin favors the rich. falls more often.” Now, Bernie Sanders (or Elizabeth Warren, Alexandria Ocasio-Cortez, or others) needs to be aware of who really governs and who really governs. Contrary to popular belief, Billionaires may not be policy failures; often, they are instead instrumental in making policies. Although you may be “angry about capitalism”, rest assured that wealth is more than just “survival”.
Atanu Biswas is Professor of Statistics at the Indian Statistical Institute, Kolkata