“All I ask is the chance to prove that money can’t make me happy.”
I am a fan of college sports. Unfortunately, my two favorite teams, Army and Georgia Tech, rarely do well in football and college basketball. Georgia Tech does, though, hold the record for a football beatdown. In 1916, Georgia Tech put a record whipping on Cumberland College, winning the game 222-0. Interestingly enough, Georgia Tech did appear to let off of the gas after halftime. The score at the half was 126-0, so Cumberland did beef up its defense in the second half and only allowed 96 points.
I wonder what it was like in the locker room of Cumberland College at halftime. I suspect that even the famous Sir Alex Ferguson “hair dryer treatment” was not on the table. It was probably more along the lines of “don’t embarrass us any more than we already are.”
I do know one speech that the Cumberland coach did not give during halftime:
Can you please give us more points so the game will be equal?
Can you imagine a rivalry game where that would ever happen? Let’s say that Texas is whipping Oklahoma 35-0 at halftime in the Red River Shootout. Do you think that Texas fans would suddenly develop an acute sense of sympathy for the Oklahoma fans on the other side and spot them 35 points to begin the second half?
Texas fans, when your blood stops boiling, you can continue reading.
Why won’t this happen? It’s because the Texas football team earned those points through superior performance.
So, what happens to you when you do a great job and provide value, either for your customers or for your employer?
You get compensated. Either through profits, as an entrepreneur, or through a paycheck and a bonus as an employee, you’re rewarded for your value creation.
Let’s do another thought exercise. This time, imagine that you’re running a lemonade stand. You have figured out the recipe for the ultimate lemonade. Customers flock to your stand for your yummy lemonade. You have a competitor who is on the opposite corner whose lemonade tastes like pure lemon juice flavored with a dash of quinine. Nobody comes to your competitor’s lemonade stand.
At the end of the day, as you’re counting your profits, you give 25% of your profits to the competitor lemonade stand, right? Unless you were in collusion with him in the first place to make crummy lemonade to make your lemonade seem even better, the answer is “no way!” His lemonade stunk and yours was great, so you reap the rewards of your superior performance.
Yet, this is exactly what the Congressional Budget Office is promoting.
Government transfers and federal taxes both help to even out the income distribution. Transfers boost income the most for lower-income households, while taxes claim a larger share of income as people’s income rises.
Instead of encouraging your competitor to make better lemonade, the CBO, as stated above, wants to reward your competitor for poor performance and penalize you for making great lemonade.
This view isn’t limited to the Congressional Budget Office. Larry Summers, the former Secretary of the Treasury and chief economic adviser to President Obama, also has espoused the view that income redistribution is desirable. He wants to, through the government, take money from higher income individuals, and “redistribute the proceeds.”
What is the cause of this desire? We want everyone to do well and we don’t want people to suffer or to struggle. However, in redistributing wealth to those who did not earn it, we are allowing Monkey Brain to win and to reinforce subsequent bad behavior. Let’s look at how.
Those who receive wealth rather than earn it are less conscientious
Do you remember your first job? How about the time when you had to scrimp and save and work to get something you really wanted? Chances are that you remember those activities specifically because you had to work hard for them. In your mind, you had earned what you received, and there was a strong cause-effect relationship built in your brain.
Psychologists at the University of Delaware, Albion College, and Anderson College demonstrated that this mental linkage is strongly correlated to whether or not you felt like you’d earned something. People who acquire their wealth without working for it – i.e., through an inheritance, through a gift, or through a transfer payment – don’t have as strong of a perception of conscientiousness as those who attained their prosperity through earning that wealth.
Many people who do not have affluence want the downfall of those who do, as Dr. Suniya Luthar of Columbia University documents in her discussion of Schadenfreude. This is not surprising – it is envy in action. What is surprising, though, is that the rich often are unhappy. As shown by research from the University of Rochester, they get on the hedonic treadmill and subjectively value themselves from external validators of their self-worth and lose sight of the intrinsic definition – what is it about them themselves which makes them valuable. However, those who want what others have without working for it are also trapped in that same extrinsic valuation – defining success through the eyes of others rather than through their own values.
Thus, by giving those who didn’t earn money a source of income, we create a link in Monkey Brain between not creating value and getting rewarded for it.
Envy can be a source of improvement if channeled properly
Envy is the desire to have what others have. Envy manifests itself in two distinct ways. Either the person who feels envy wants to have the same things that the object of envy has or the envious person has a feeling “if I can’t have it, then neither should you.” As Sarah Hill and David Buss from the University of Texas showed, envy can be used to motivate the envious to acquire the same advantages that the objects of envy had.
Humans tend to look at those nearest them and to derive their satisfaction about their own present state when comparing to those nearby. This is called a positional bias. In practice, this means that if your neighbor just told you about a great vacation or showed up in a fancy new convertible, you’d be much more envious than if Donald Trump did the same thing. You know your neighbor and see him every day, but you don’t really know Donald Trump personally.
There are three steps to channeling this envy into a positive outcome for yourself.
- View the accomplishments of those close to you in a positive light. Did a friend lose a lot of weight? Did a neighbor get a pay raise? Think to yourself about how wonderful it is for that person and how happy you are for her. This will signal to Monkey Brain that you view it as important and make Monkey Brain want the same thing.
- Set a goal to do even better. Envy will spur you to improve, and positional bias will cause you to want to improve even more. Find a measurement you can achieve and set milestones to get there.
- Create a “competitor” who isn’t actually threatening. An example that comes to mind is Tim Ferriss. He’s a very successful entrepreneur and author who created, among other books, The Four Hour Work Week. Many people have used him as inspiration to succeed, using the attitude “if he can do it, so can I.” That thought pattern of “if someone else can do this, so can I” is an indicator of a beneficial creation of a mental competitor to spur the proper use of envy.
Is earning more income evil?
All of our lives, many of us have been bombarded with the perception that money is evil. The Bible verse “the love of money is the root of all evil” has been perverted into “money is the root of all evil.” We hear these scripts all of our lives, and whether we’re aware of it or not, they become embedded in our subconscious. We become self-sabotaging and tell ourselves that we don’t deserve success.
If we fall victim to the negative self-talk that Monkey Brain will try to throw at us because of what we’ve heard all of our lives, we cannot help others with a hand up. Instead, we will bring ourselves down, and create equality in the other direction – by bringing ourselves down a notch and underperforming to our potential.
As an alternative, we can look to the benefits of increasing our income and eliminate the self-defeating mental barriers which will prevent us from succeeding when we start our own businesses or ask our bosses for a raise.
- The more we earn, the easier it is to meet our personal priorities. While it would be nice if we didn’t need money for anything, the reality is that money is what is required for us to meet many of our goals. As James Altucher says, money may not solve all of your problems, but it solves your money problems. If we can achieve our priorities in life, then we will be able to achieve self-fulfillment and climb higher on Maslow’s hierarchy.
- The more we have, the more we can give away. While we may have some mental view of the nobility of someone who gives away their last dollar to charity, the reality is that the charity doesn’t benefit that much from the charity of a dollar. It benefits more from the provision of lots of dollars. If charity is important to you, then it would stand to reason that you’d want to be able to give as much to charity as possible, spurring your desire to earn more.
- It provides you with options. If you have more income and more money, you remove a constraint to making future decisions. I would have loved to work for World Wrestling Entertainment when I was presented with the opportunity. However, lack of income and lack of savings created a real constraint that prevented me from accomplishing that goal (NOTE TO LINDA MCMAHON: I’m available if you need me to provide financial counseling for your wrestlers!). Having income and accumulating wealth gives you the ability to pursue what’s important when the opportunity arises.
- You feel a sense of worth for what you have created. By creating value and providing benefits for others, you are rewarded for helping them. This creates a direct tie in your mind between that which you have done and produced and the value in your life.
Socialism is defined as the state control of work and resources and their distribution to its citizens. By aiming to redistribute wealth, the Congressional Budget Office is giving in to the negative outcome of envy. Instead, it should focus on how to channel envy to raise the standards of lower income people to not only create and provide value, but also to create a sense of self-worth. Affluenza, or “sudden wealth syndrome” isn’t just limited to lottery winners.
You can protect yourself by using positive aspects of envy to improve your life and then benefit those around you.
After all, the next time your favorite sports team is losing, you’re not going to ask the competition to give you a few points, are you?
Can you use envy to your own benefit? Tell us your thoughts in the comments below!