Friday, December 15, 2006

The Other Invisible Hand

The Other Invisible Hand: Money and its Subtle Influence on Social Life

I recently came across an intriguing article by Benedict Carey, “Just Thinking About Money Can Turn the Mind Stingy,” in the New York Times.[1] The author was trying to place the seemingly surprising findings from a recent research report in some historical human behavioral context. This NYT article was based upon a research report published in Science entitled “The Psychological Consequences of Money.”[2] The researchers found that their test subjects acted in either a more or less community-minded manner depending on whether they had been exposed to neutral or money-based background content in the task materials they were given. Further, these behavior patterns were evident regardless of race, class, gender, age, or any other group. It is a fascinating study, one which confirms what I [and probably many others] have experienced over many years of working with issues of money in organizations. That is: When money or financial issues are at play in the context of decision making, even the most socially conscious, warm-hearted people tend to act in an anti-social manner.

The following is the abstract for the research published in the Science article:

Money has been said to change people's motivation (mainly for the better) and their behavior toward others (mainly for the worse). The results of nine experiments suggest that money brings about a self-sufficient orientation in which people prefer to be free of dependency and dependents. Reminders of money, relative to non-money reminders, led to reduced requests for help and reduced helpfulness toward others. Relative to participants primed with neutral concepts, participants primed with money preferred to play alone, work alone, and put more physical distance between themselves and a new acquaintance.

In short, when money is introduced into the mix, the default reaction is to withdraw into a self-centered or egocentric posture and away from a more altruistic view that includes concern for others and recognition of our real dependence upon one another. Neither the NYT nor the Science articles addressed whether this is bred in the bone or learned behavior. This is a challenging question because money and the financial systems of which it is a part are relatively late entries into the evolutionary stream of human consciousness. And, it is a likely bet that money first emerged as a technology of transactional agreement in service of furthering the human economy. Only more recently has the acquisition of it become an end unto itself and a legitimate measure of worth. Though I could not make a direct correlation between this latter shift and the behavior demonstrated by the experiment, my sense is that money is now so deeply connected to our sense of identity or being, and our sense of safety, that any inflection upon those senses will instantaneously and unconsciously adversely affect our social or relational capacities. It is a challenging place to be so bound to something we can neither really own (we only have a right of use) nor control the value of.

The authors of the research study have tapped into one of the great mysteries and, probably, ironies of our time. Namely: Self-reliance is an important spiritual ideal from the point of view of individual freedom, but a misleading illusion from point of view of interdependence in our economic life. What they found, I think, is that with the background money mind-set, the subjects no longer operated as socially normal as defined by the neutral mind-set group. The money-minded separated themselves either out of fearfulness and protection or because they felt that they did not need the others. In either case, by placing themselves apart they were denying consciously or unconsciously the social significance of, and their real dependence on, an economic system that somehow punishes or benefits them. The outcome of the research points to a level of disintegration between inner and outer life that has had increasingly powerful social implications for everyone, and is probably one (of many) of the driving forces of the wealth gap that has expanded so drastically in recent years. The more one “separates” oneself from the social body, the more one has to accumulate resources to meet one’s own needs. And accumulation is the name of the game; a mistaken substitution of net worth for self worth.

In his research for the NYT article, Carey interviewed George Loewenstein, professor of economics and psychology, Carnegie Mellon University, Pittsburgh. Loewenstein responded to the findings of the research: “We know there is a civilizing side to money, that people acting in a self-interested fashion depend on fellow human beings in a community and tend to treat them fairly….But this study shows its pernicious side, how the pursuit of money can be isolating.” This response identifies even more layers of complexity. It is fair to point to the civilizing side of money since it does make transacting in our economic life pretty efficient since each transaction is also an embedded agreement about value exchange or cost and use of funds. It is also fair to point to our dependence upon our fellow human beings as a reason to treat them fairly—a version of the golden rule. But what the study shows is that in our current culture, money and self-interest are so inextricable that fairness has become a matter of priority rather than a bedrock value—especially if you are on the wealth side of the gap.

As individuals, each of us will have a response to the implications of this important research and the ensuing dialogue, if we care to. On a personal level, I look at my work as serving or meeting the needs of others. And I appreciate that others have made the clothes and grown the food that I and my family consume. To me this is the oversimplified essence of economics; it is a picture of interdependence. From a certain perspective, one could remove all the money and financial transactions and still have a functioning economy. By this I mean we could still work to find the resources (food, shelter, clothing) to meet our and each other’s needs with human resources, motivated by a sense of responsibility and community. But money is ever-present and powerful, and we need to realize on the personal, community, and policy levels the injustice that has emerged from an economy that is essentially ego-centric. That we can barely do anything without having money these days indicates that money is almost always coloring our social and economic experience. Thus, the researchers’ findings about its subtle influence on behavior have significant implications for cultural, political and economic life in general. The findings indicate the inner and personal work we have to do in order to effect social transformation—if that is our wish.

When Adam Smith named the invisible hand in The Wealth of Nations, he was making an oblique religious reference to a higher being at work in the economy. What this new research identifies through scientific methodology is the other invisible hand, our unconscious self at work in our economic behavior. The transformative work, then, is to become conscious of the unconscious influence money has on each of us—to bring it out of the shadows—and then to align and integrate our financial practices with our deepest values.

John Bloom ©2006

[1] New York Times: Science Times Section, November 21, 2006.
[2] Science: “The Psychological Consequences of Money”; Kathleen D. Vohs, Nicole L. Mead, and Miranda R. Goode; Nov. 17, 2006: Vol. 314. no. 5802, pp. 1154–1156.