In a recent study respondents on average thought that the top fifth of the population had just short of 60 percent of the wealth, when in truth that group holds approximately 85 percent. respondents described an ideal wealth distribution as one in which the top 20 percent hold just over 30 percent of the wealth.
Only 42 percent of Americans believe that inequality has increased in the past ten years, when in fact the increase has been tectonic.
Looking across countries, it appears that there is an inverse correlation between trends in inequality and perceptions of inequality and fairness.
What is different today is that the 1 percent now has more knowledge about how to shape preferences and beliefs in ways that enable the wealthy to better advance their cause, and more tools and more resources to do so.
In a set of experiments in India, low- and high-caste children were asked to solve puzzles, with monetary rewards for success. When they were asked to do so anonymously, there was no caste difference in performance. But when the low caste and high caste were in a mixed group where the low-caste individuals were known to be low caste (they knew it, and they knew that others knew it), low-caste performance was much lower than that of the high caste.
those at the top want to be sure that the inequality in the United States today is framed in ways that make it seem fair, or at least acceptable. If it is perceived to be unfair, it might lead to legislation that would attempt to temper it.
What was called incentive pay was anything but that: pay was high when performance was high, but pay was still high when performance was low. Only the name changed. When performance was low, the name changed to retention pay.
What weve achieved is a state too constrained to provide investments in infrastructure, technology, and education. But still large enough and distorted enough that it can provide a bounty of gifts to the wealthy. The advocates of a small state in the financial sector were happy that the government had the money to rescue them in 2008 and bailouts have in fact been part of capitalism for centuries.