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Delusions Of Egalitarianism

One of the oddities of the explosition of income inequality over the last few decades is that most people have no idea how far it's gone. Obviously, most people have a dim understanding of statistics to begin with. But they wish the country were dramatically more equal than it is, and it's a lot more unequal than they think. James Fallows:

A creative way to demonstrate that is with a forthcoming paper by Michael Norton of Harvard Business School and Daniel Ariely of Duke, which compares: (a) how wealth actually is distributed in America; (b) how people think it's distributed; and (c) how they think it should be distributed. The paper is available in PDF here.

The chart below conveys the central point: people think the distribution of wealth is more equal than it actually is; and they think it should be much more equal than their already unrealistically-equal notion of its current state. Eg: the top 20% of the US wealth distribution actually controls nearly 85% of total wealth; people think the top 20% controls under 60%; and they think it should control just over 30%



Similarly: people feel that the bottom 20% of the economic pyramid "should" have about 10% of the total pie; they think it actually has about 3% or 4%; in fact, its share appears to be too small to show up on the chart.