Money 2.0: The Rich and the Rest of Us

    Comparing ourselves to others is a natural tendency, but it can have positive and negative effects. Be aware of the types of comparisons you make and the impact of inequality on society and individuals.

    enMay 23, 2022

    About this Episode

    Where do you stand on the income ladder? Do you think of yourself as rich, as poor, or as somewhere in between? Our perceptions of wealth — our own, and other people's — can affect us more profoundly than we realize. This week in our Money 2.0 series, we revisit two of our favorite conversations about wealth and inequality. Sociologist Brook Harrington takes us inside the lives of the über wealthy and the people who manage their fortunes. Then, psychologist Keith Payne shares surprising research about income inequality and how it shapes our minds. 

    If you like this show, be sure to listen to the other episodes in this series, including our conversation about the mental scripts that shape our choices around money.

    Also, check out our new podcast, My Unsung Hero! And if you'd like to support our work, you can do so at support.hiddenbrain.org. 


    🔑 Key Takeaways

    • The ultra-wealthy lead drastically different lives and have access to different rules and lifestyles. Wealth managers help them hide assets and avoid taxes, widening the gap between the rich and everyone else.
    • Successful wealth management requires a balance of financial and legal knowledge with empathy and a willingness to go above and beyond for clients. Wealth managers facilitate private markets and maintain client privacy.
    • Wealth managers work to solve the complex family and privacy issues of the ultra-rich, even if it means breaking the law. They enjoy privileged lifestyles and socialize with powerful people, which showcases the growing gap between the rich and the rest of society.
    • Some wealthy individuals and their tax managers view taxes as theft and believe protecting wealth from taxation is just. However, conscious-stricken wealth managers have employed strategies to address inequality, although risking their replacement by challenging their clients.
    • Wealth can breed suspicion and impact relationships. Understanding how perceptions affect our happiness is key, whether we are rich or not.
    • Exposure to inequality can lead to disruptive behavior, such as air rage on planes, particularly if passengers are required to walk through first class. Boarding from the back can minimize hierarchical exposure and promote equality.
    • Comparing ourselves to those above us can inspire us to work harder, but it can also leave us feeling inadequate. Inequality in society can make it difficult to climb the social ladder and affects us in every aspect of our lives.
    • Financial inequality has measurable effects on society such as a stronger predictor of crime and political polarization after basic physical needs are met. It is a pervasive issue that should be addressed for the well-being of individuals and society at large.
    • People prioritize equality over personal wealth, but defining and achieving it remains subjective and challenging. This desire for fairness also affects decision-making in sports and can override economic logic.
    • Pay based on contributions is better than absolute equality. Transparency about pay can reveal hidden biases. Dissatisfaction with pay inequality is higher for lower earners. Negative feelings about discussing pay can have negative consequences.
    • Comparing ourselves to others is a natural tendency, but it can have positive and negative effects. Be aware of the types of comparisons you make and the impact of inequality on society and individuals.

    📝 Podcast Summary

    The Ultra-Wealthy: A Different World Amidst COVID-19

    The lives and mindsets of the ultra-wealthy are drastically different from the rest of us, and this gap is only widening due to the COVID-19 pandemic. Inequality shapes how we think about ourselves and others, and the ultra-rich have access to a completely different set of rules and lifestyles. Sociologist Brooke Harrington became a wealth manager and discovered that these professionals learn intimate details about their clients' private lives, including their secrets and illegal activities. This allows the ultra-wealthy to hide assets and avoid taxes. The gap between the rich and the rest of us will continue to grow unless substantive action is taken to address inequality.

    The Importance of Empathy and Client Loyalty in Wealth Management

    To become a successful wealth manager, empathy and a high tolerance for privileged clients is as important as finance and legal knowledge. Managers often go to extreme lengths to please their clients, such as finding a lost bracelet or procuring a large quantity of smoked salmon. These requests may seem childish or unreasonable but are often tests of the manager's loyalty and ability to fulfill outlandish requests. Wealth managers also play a key role in setting up private markets for high-value assets, such as real estate and art collections, and maintaining client privacy. While the very rich may have unique needs, their behavior often mirrors that of the rest of us.

    The World of Wealth Managers: Navigating the Privileged and Risky Lives of the Ultra-Rich

    The lives of the richest people in the world are vastly different from those of regular citizens. Wealth managers are tasked with dealing with complex family issues and maintaining their clients' privacy, even if it means breaking the law. For the ultra-rich, national borders and laws are insignificant. This reality carries risky consequences, including potential lawsuits, as well as a lack of accountability. Wealth managers often socialize with powerful people and obtain sensitive information firsthand, which underscores the lack of transparency for the wealthy. This level of privilege and immunity highlights the growing gap between the rich and the rest of society.

    The Ideological Divide in Wealth Management

    Many of the wealthy and their tax managers see taxes as theft and believe that their wealth creation initiative should be protected against the government. They view redistribution of collected tax as immoral, as it creates dependency on the part of the poor. A strong component of ideology exists in wealth management, where about a quarter of people interviewed really believe in the justice of protecting the wealth of their clients from taxation. However, there are those who are conscious-stricken about the larger impacts of their work, and have employed strategies such as encouraging clients to donate to charity or educating clients on the theory and practice of inequality. Most wealth managers are replaceable, which makes this a risky strategy to pursue with wealthy clients who are used to having people fawn over them and not challenge them.

    The Hidden Challenges of Wealth: Trust Issues and Perceptions

    Being wealthy may seem like a luxurious lifestyle, but it comes with its own set of challenges, such as constantly being suspicious of others. Wealthy people often feel that others are trying to take advantage of them and can only trust their employees because of the clear transactional nature of their relationship. Inequality not only affects our financial well-being but also significantly impacts our relationships, perceptions, and physical well-being. It's essential to understand how our perception of others' lifestyles can influence our own happiness and contentment in life.

    The Psychological Effects of Hierarchy and Status on Airplanes

    Exposure to inequality in everyday settings can have significant psychological effects on individuals, leading to disruptive behavior. Keith Payne discusses how hierarchy and status play a role in incidents of air rage on planes with first class cabins. The experience of walking through a status hierarchy on a plane can significantly impact an individual's behavior. Notably, planes that board from the rear of the aircraft experience fewer incidents of air rage in the coach cabin, as passengers do not have to walk past the first class section. This highlights the importance of creating environments that promote equality and minimize exposure to hierarchy and status.

    The Psychological Impact of Upward Social Comparison and Inequality

    Upward social comparison can cause feelings of envy and motivate to work harder, but it can also lead to feelings of inadequacy and frustration. The increasing scale of inequality in society can make it harder for individuals to climb the social ladder, resulting in a sense of brokenness. This dynamic occurs across all income levels, and the tendency to make upward comparisons is ingrained in human psychology. The effects of inequality can seep into every aspect of our lives, and it is crucial to understand its impact.

    The impact of financial inequality on our bodies and minds.

    Financial inequality not only affects our perception of ourselves and the world, but it also has measurable effects on our bodies and minds. In wealthy countries, inequality becomes a stronger predictor of crime and political polarization after basic physical needs are met. The impact of inequality on people's wealth and opinions causes them to favor free-market or redistribution policies and ultimately leads to increased polarization as each side views the other as a threat. These findings indicate that financial inequality is a pervasive issue that should be addressed for the well-being of individuals and society at large.

    The Human Desire for Equality and Its Impact on Wealth and Policy

    Despite economic logic suggesting otherwise, human desires for equality often lead to sacrifices in personal wealth if it means leveling the playing field. Studies have shown that a large majority of people prefer a more equal distribution of wealth, regardless of political affiliation. However, the way in which individuals view equality and inequality is highly subjective and intertwined with personal beliefs and identities, making it difficult to translate desires for equality into policy. Even in professional sports, extreme pay gaps and inequality among players does not necessarily lead to better team performance. The human desire for relative entitlement and fairness can override economic reasoning and have significant impacts on individual and collective behavior and decision-making.

    Compensation and Pay Transparency in Team Sports

    Compensation in proportion to contributions is better than absolute equality for team sports. Pay transparency reveals underlying assumptions about pay inequity and performance. People who are below average in pay are more dissatisfied with pay inequality than those who are higher up. Social norms surrounding discussing pay inequality reflect negative feelings that can have bad outcomes.

    The Psychological Consequences of Social Comparisons and Inequality

    Visible and transparent inequality can lead to a greater feeling of distance between social classes, lower levels of trust, and increased polarization. However, comparing ourselves to others is inevitable and can have both positive and negative outcomes. Strategic upward social comparisons can motivate us, while downward social comparisons can provide a break from stress. It is important to be mindful of the types of comparisons we make on a daily basis and to recognize the psychological consequences of inequality at both the societal and individual level.

    Recent Episodes from Hidden Brain

    Innovation 2.0: The Influence You Have

    Innovation 2.0: The Influence You Have

    Think about the last time you asked someone for something. Maybe you were nervous or worried about what the person would think of you. Chances are that you didn’t stop to think about the pressure you were exerting on that person. This week, we continue our Innovation 2.0 series with a 2020 episode about a phenomenon known as as “egocentric bias.” We talk with psychologist Vanessa Bohns about how this bias leads us astray, and how we can use this knowledge to ask for the things we need. 

    Did you catch the first two episodes in our Innovation 2.0 series? You can find them in this podcast feed or on our website. And if you're enjoying this series, please share it with a friend or family member. Thanks! 

    Hidden Brain
    enMay 13, 2024

    Innovation 2.0: Multiplying the Growth Mindset

    Innovation 2.0: Multiplying the Growth Mindset

    Have you ever been in a situation where you felt that people wrote you off? Maybe a teacher suggested you weren't talented enough to take a certain class, or a boss implied that you didn't have the smarts needed to handle a big project. In the latest in our "Innovation 2.0 series," we talk with Mary Murphy, who studies what she calls "cultures of genius." We'll look at how these cultures can keep people and organizations from thriving, and how we can create environments that better foster our growth.

    Do you know someone who'd find the ideas in today's episode to be useful? Please share it with them! And if you liked today's conversation, you might also like these classic Hidden Brain episodes: 

     The Edge Effect

    The Secret to Great Teams

    Dream Jobs

    Innovation 2.0: How Big Ideas Are Born

    Innovation 2.0: How Big Ideas Are Born

    Why is it so hard to guess where we're meant to be? To predict where we'll end up? Nearly all of us have had the experience of traveling down one road, only to realize it's not the road for us. At the University of Virginia, Saras Sarasvathy uses the lens of entrepreneurship to study how we plan and prepare for the future. We kick off our new "Innovation 2.0" series by talking with Saras about how we pursue goals and make decisions.

    Do you know someone who might benefit from our conversation with Saras about expert entrepreneurs? Please share it with them if so! And be sure to check out our other conversations about how to get out of ruts and figure out a path forward: 

    Who Do You Want to Be?

    You 2.0 : How to Break Out of a Rut

    Parents: Keep Out!

    Parents: Keep Out!

    If you're a parent or a teacher, you've probably wondered how to balance play and safety for the kids in your care. You don't want to put children in danger, but you also don't want to rob them of the joy of exploration. This week, we talk with psychologist Peter Gray about how this balance has changed — for parents and children alike — and what we can do about it.

    For more of our reporting on children and parents, check out these classic Hidden Brain episodes:


    Bringing Up Baby 


    The Curious Science of Cravings

    The Curious Science of Cravings

    We've all had those days when all we want is a little treat. Maybe it's a bag of chips, an ice cream sundae or a glass of wine. But sometimes, these desires become all-consuming. This week on the show, psychiatrist Judson Brewer helps us understand the science of cravings, and how we should respond to them. 

    If you liked today's conversation, be sure to check out other Hidden Brain episodes about ways to regain a feeling of control over your life: Creatures of Habit and Taking Control of Your Time.

    What Is Normal?

    What Is Normal?

    Anthropologist Tom Pearson was devastated after his daughter Michaela was diagnosed with Down syndrome. When he began to examine that emotional response, he found himself wrestling with questions that have roiled his field for decades. Early anthropologists would often compare people of different backgrounds and abilities, asking questions like: How is one group different from another? Which one is stronger or smarter? And how do we understand people who don’t fit our expectations? This week, we talk with Pearson about his family’s story, and the evolution of our thinking on disability and difference.

    If you liked today's show, be sure to check out these classic Hidden Brain episodes:

    "Emma, Carrie, Vivian"

    "Why You're Smarter than You Think"


    The Transformative Ideas of Daniel Kahneman

    The Transformative Ideas of Daniel Kahneman

    If you've ever taken an economics class, you were probably taught that people are rational. But about 50 years ago, the psychologists Daniel Kahneman and Amos Tversky began to chip away at this basic assumption. In doing so, they transformed our understanding of human behavior. This week, we remember Kahneman, who recently died at the age of 90, by revisiting our 2018 and 2021 conversations with him. 

    If you enjoyed this look at the work of Daniel Kahneman, you might also enjoy our conversations about behavioral economics with Kahneman's friend and collaborator Richard Thaler: 

    Misbehaving with Richard Thaler 

    Follow the Anomalies 

    Are You Listening?

    Are You Listening?

    Have you ever sat across from your spouse, colleague or friend and realized that while they may be hearing what you're saying, they aren't actually listening? Poor listening can lead to arguments, hurt feelings, and fractured relationships. But the good news is that active, thoughtful listening can profoundly benefit both people in the conversation. This week on the show, psychologist Guy Itzchakov helps us understand where interactions go awry, and how to become a more attentive listener. 

    For more of our work on how to better connect with the people in your life, check out these episodes:

     Why Conversations Go Wrong with Deborah Tannen

    A Secret Source of Connection with Amit Kumar

    Relationships 2.0: What Makes Relationships Thrive with Harry Reis

    Relationships 2.0: How to Keep Conflict from Spiraling with Julia Minson 


    The Ventilator

    The Ventilator

    Many of us believe we know how we’d choose to die. We have a sense of how we’d respond to a diagnosis of an incurable illness. This week, we revisit a 2019 episode featuring one family’s decades-long conversation about dying. What they found is that the people we are when death is far in the distance may not be the people we become when death is near.

    If you enjoyed today's episode, here are some more classic Hidden Brain episodes you might like:

    The Cowboy Philosopher

    When You Need It To Be True 

    Me, Myself, and Ikea 

    Thanks for listening! 

    Escaping the Matrix

    Escaping the Matrix

    A little more than a decade ago, researchers began tracking an alarming trend: a dramatic uptick in anxiety and depression among young Americans. Psychologist Jonathan Haidt, like many other researchers, says the increase is related to our use of social media and devices. But he believes it’s also deeper than that — connected to our deepest moral beliefs and how they shape the way we view the world. He says there are simple steps we can take to improve the mental health of kids growing up in the smartphone era.

    For more of our work on how technology is shaping our lives, check out our two-part series "The Paradox of Pleasure" and "The Path to Enough."  And don't miss our classic episode on social media, "Screaming into the Void."