Difference, Distance, and Distribution

June 11, 2011
Posted by Jay Livingston

In a famous, though probably apocryphal, quotation, F. Scott Fitzgerald says to Ernest Hemingway, “You know, the rich really are different than you and me.” Hemingway replies, “Yeah, they have more money.”

You can imagine the same conversation with “poor” instead of “rich.”

The question for those who are neither rich nor poor, those in the great middle, is how similar they feel to the people at either end of the income curve. That sense of difference or similarity may be especially important for people’s ideas about redistribution. If you feel some kinship with the poor, you’ll do what you can to protect Robin Hood. If you feel that you have more in common with the wealthy, you’ll rat him out to the sheriff.

Polls and policies are not always in sync. But when it comes to inequality and redistribution, Americans – both the general public and their legislators – differ from people in other countries. We are exceptionally tolerant of income inequality and exceptionally resistant to income redistribution – at least when that redistribution means government actions that shift benefits from the wealthy to the poor. My guess is that this resistance reflects the middle-class perception of having much more in common with the rich than with the poor.

It’s nice to find confirmation for your hunches even when those hunches are pessimistic. Henry Farrell at The Monkey Cage recently summarized this paper by Lupu and Pontusson. Their research on 15-18 OECD countries finds that

the key factor determining redistribution is the income gap between middle income voters and lower income voters . . . When the gap is high, middle class people will have a much weaker sense of solidarity with the poor, and hence be less supportive of redistribution.

Lupu and Pontusson use a measure they call “skew” – the ratio of the dollar distance of the middle from those at either end of the distribution. The question is: where do those in the middle stand relative to the rich and the poor. In the US, those in the middle of the income distribution are closer to the poor, the bottom 10%, than to the top 10%, probably because in the last few decades the very rich have zoomed even farther away from the other 95-99% of the population. If the US middle class followed the pattern of the other OECD countries, they would be more for Robin Hood. But they are not.

How then to explain the anti-redistribution preferences of the American middle?

In a post a few months ago (here), I suggested that perceived distance was still an important factor in our reluctance to redistribute, but that the distance was not so much economic as it was racial. What made the poor different was not their level of poverty but their race.

The Lupu-Pontusson paper reaches the same conclusion. Again quoting Henry’s summary:

Lupu and Pontusson . . argue that the explanation for this is straightforward – “it is clearly attributable to the high-concentration of racial-ethnic minorities in the bottom of the income distribution.” More bluntly put – middle class Americans feel less solidarity with the very poor because the very poor are more likely to be black.

So Fitzgerald might well have said, “You know Ernest, the poor really are different from you and me.” And Hemingway, having read the Lupu-Pontusson paper, would reply, “Yeah, they’re darker.”*

* What Hemingway would say is probably more like: “The poor have no money. But they are good people. When they fight in the bars it is a good fight, a true fight. Sometimes they have nada. It is a Spanish word. It means nothing. Nada. Nada. Sometimes when you run the regression, you get nada. The betas weigh no more than an ant and they have no stars. Nada. But sometimes you get the big r. It is a strong r, a true r. Then you go to the café and drink the cold crisp white wine.”