Envy, Black Magic, Growth and Inequality

“Plato told Aristotle that no one should have more than five times the wealth of the lowest-paid member of society.”

It has been reasonably well-established in the literature that not only absolute income levels matter for the level of happiness, but also relative income levels. You don’t like to see too much poverty around you (thus the case for altruism), but you don’t like to see rich, ostentatious people either (causing envy). This article is mostly about the latter.

If you can’t increase your own income (for example because of low social mobility), then you can theoretically improve your happiness by reducing other people’s incomes. This would explain such unconstructive behavior as vandalism and black magic.

My family is currently constructing a wall around our piece of land in Alto Ovejuyo, La Paz, and a few weeks ago, when the guys were clearing away some bushes, they found a bottle with half a lizard and other weird items that indicated black magic with malicious intention. Hopefully it was not targeted at us. After all, it was found just on the border of our land and it had been there for some years. And how much damage can a severed lizard do, anyway?

After listening to the construction workers’ horror stories about black magic and human sacrifices in the altiplano construction business, however, we decided, just in case, to do some white magic to counter the potential negative effects of the black magic. So, last weekend a perfectly healthy, beautiful, white, blue-eyed llama had his throat cut and his blood poured into the foundation of our wall. A mesa blanca was also burned, and supposedly you can read the future in the ashes when it is burning down. According to the experts present, and there were many of those, it could not have turned out better. In the ashes there was clearly a puerta del sol (nice house), a frog (wealth) and an airplane wing (traveling), so presumably we are OK.

According to a few Bolivians surveyed, envy is very strong among the Aymara population (I don’t know anything about the rest of the Bolivian population), and malicious spells are frequently used. The sin that might attract such a spell may simply be to be successful and not share your wealth with those around you. Even if you share with many of them, there may be others who feel ignored, so you can never be safe.

What does such strong envy, backed up by pretty convincing witch doctors, do to a society? First of all, if you risk dying a slow, painful, inexplicable death if you are successful, you might want to keep a low profile, keep your business micro-size, and in general reduce your efforts so as not to risk becoming too successful. This, of course, would tend to put a brake on overall growth.

Second, if you happen to become successful despite of this, you would want to get rid of the money quickly. If you invest the surplus in your business, that might make you even more successful, so that is not a good idea. It seems that the perfect way to get rid of excess wealth is to throw a big party. You make people happy while showing publicly how generous and sharing you are. Nobody objects to a good party. Just be careful not to forget anybody when you send out invitations.

These conjectures would explain several facts about the Bolivian highlands, such as the extremely low investment ratios, the predominance of micro-enterprises that never grow to become small or medium sized enterprises, and the lavish parties held despite the very low incomes. I always found it irresponsible that these relatively poor families spend so much money on parties, instead of investing it in their children’s education or in their micro-business. But now I can see why they might consider this too risky.

This is admittedly mostly speculation, based on second or third hand gossip, but there is real empirical evidence on the strength of envy in other countries. For example, an experiment carried out in the UK by Zizzo and Oswald showed that many people are willing to pay in order to reduce the wealth and incomes of others. They organized a series of experiments in which groups of four people were given nearly equal sums of money. The four had to gamble with their new wealth in random, computerized bets; two came out each time with more cash, and two with less. Each was then given the chance to spend his money to reduce the take of his fellow subjects, but it would cost him 25 cents for every dollar destroyed that belonged to his fellow players.

Was anybody willing to spend money just to hurt others, while leaving himself poorer? The answer is overwhelmingly yes. A shocking 62% of the participants paid for the privilege of impoverishing their peers (1).

Several surveys have shown that many people would prefer lower average income if these were more fairly distributed. For example, Alesina, Di Tella & MacCulloch show, using 128,106 answers to a survey question about happiness, that there is a large, significantly negative effect of inequality on happiness in Europe, but not in the US (2). The authors suggest that this is because social mobility is higher in the US, implying that those who are presently rich frequently go bankrupt, and the poorer may suddenly strike it rich. If inequalities tend to average each other out over time, inequality at a given point in time is not so much of a problem.

Since social mobility is very low in Bolivia (3), envy is likely to be strong, and its negative effects on growth and development may be severe. More research on this issue is clearly necessary, but it does seem to provide yet another argument for improving social mobility.

Know of any other examples of inequality increasing envy, black magic, and the like in current populations? Leave a reply below.

(*) Director, Institute for Advanced Development Studies, La Paz, Bolivia. The author happily receives comments at the following e-mail: landersen@inesad.edu.bo.

(1) Zizzo, Daniel J. & Andrew Oswald (2001) “Are People Willing to Pay to Reduce Others’ Incomes“.
(2) Alesina, Alberto & Di Tella, Rafael & MacCulloch, Robert (2004) “
Inequality and happiness: are Europeans and Americans different?
Journal of Public Economics, vol. 88(9-10), pp. 2009-2042.
(3) See Andersen, Lykke E. (2003) “Baja movilidad social en Bolivia: Causas y consecuencias para el desarrollo” Revista Latinoamericana de Desarrollo Económico, No. 1. pp. 11-36.


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