Medicine: Philanthropy for Profit?

Elisabeth Rosenthal has produced an eye-opening polemic: An American Sickness: How Healthcare Became Big Business and How You Can Take It Back.  No matter how corrupt and dysfunctional you might believe the medical industry to be, she provides you with enough examples of unrestricted greed to convince you that things are even worse than you thought.  Doctors, hospitals, insurers, device makers, pharmaceutical companies, even charities—none are spared.  In her view, medicine has become a type of protection racket, a form of “medical extortion”—“pays us what we want or you will be harmed.”

“Faced with disease, we are all potential victims of medical extortion.  The alarming statistics are incontrovertible and well known: the United States spends nearly one-fifth of its gross domestic product on healthcare, more than $3 trillion per year, about equivalent to the entire economy of France.  For that, the U.S. health system generally delivers worse health outcomes than any other developed country, all of which spend on average about half what we do per person.”

Faced with disease, we encounter a system that makes no sense; one the providers of the medical services scarcely understand themselves.

“Imagine if you paid for an airplane ticket and then got separate and inscrutable bills from the airline, the pilot, the co-pilot, and the flight attendants.  That’s how the healthcare market works.  In no other industry do prices for a product vary by a factor of ten depending on where it is purchased.”

Our system seems to consist of a number of actors, all of which are trying to work the system in such a way as to maximize their profit and increase the cost to the patient and to the nation as a whole.  Rosenthal provides numerous examples of outrageous charges that are created in the relentless pursuit of ever-greater revenue.  Many are expected.  Financial chicanery on the part of hospitals, drug companies, and device manufacturers has received some notoriety from press coverage in the past.  More distressing are the cases of individual doctors who cleverly pursued options that allowed them to extract enormous sums from the system while contributing very little.  Perhaps most distressing was Rosenthal’s claim that even well-known charitable organizations have fallen victim to this quest for ever-greater revenues.

“No one player created the mess that is the $3 trillion American medical system in 2017.  People in every sector of medicine are feeding at the trough: insurers, hospitals, doctors, manufacturers, politicians, regulators, charities, and more.  People in sectors that have nothing to do with health—banking, real estate and tech—have also somehow found a way to extort cash from the patients.”

Do charities really deserve to be included among that list of transgressors?

Rosenthal claims that a decision by the Cystic Fibrosis Foundation (CFF) to fund a small pharmaceutical company on a high-risk, high-payoff drug development has caused many charities to rethink their spending plans.  The CFF investment turned out to be wildly successful for both cystic fibrosis sufferers and the CFF itself.

“The mindset and mission of many disease foundations underwent a sea change in 2014, when the Cystic Fibrosis Foundation (CFF) received a $3.3 billion windfall as the result of its decision to invest over the years in a small Massachusetts biotech firm.  A total of $150 million invested in Vertex Pharmaceuticals ultimately helped produce Kalydeco, the first blockbuster drug against cystic fibrosis (CF), which was approved by the FDA in 2012.  Two years later, the foundation sold its rights to drug royalties to a venture capital firm and received over $3 billion in an instant, about 30 times the amount the foundation had typically raised in a year.”

“Suddenly foundations had an enticing new business model: ‘venture philanthropy’; that is, investing money in drug, device, and biotech companies with the expectation of financial return.”

Such a model worked well for those suffering from cystic fibrosis, why would it not work well in other instances?  Rosenthal points out that, in general, drug and device makers are high-revenue outfits that will always welcome investments, but will not alter their basic objective, which is to make as much money as possible from their products.  Charitable foundations are supposed to be representing the interests of disease sufferers, a task that includes protecting them from financial harm.  How can a foundation possibly promote the need for lower costs for patients when they are pursuing a financial strategy that demands that new products be priced as high as possible?

To illustrate this conflict of interest, Rosenthal discusses the history of diabetes research and treatment.

“After Frederick Banting and his colleagues discovered and isolated insulin in the early 1920s, they licensed the patent for only a dollar as a ‘gift to humanity.’  Type 1 diabetes, which previously killed children only months after onset, was suddenly transformed into a chronic disease.  To this day insulin is the alpha and omega of type 1 diabetes treatment.”

The initial goal of charitable foundations formed early in the twentieth century was the support of basic research into cures.

“The March of Dimes, focused on polio, raised money from hundreds of thousands of donors who paid much of the cost of developing both the Salk and Sabbin vaccines.  The foundation never sought to make money from either inoculation.  After World War II the Cystic Fibrosis Foundation (established in 1955) supported the scientists who identified the defective gene for that disorder.  The National Multiple Sclerosis Society (founded in 1946) funded the Columbia University scientist who discovered the abnormal spinal fluid proteins associated with the disease.  The Juvenile Diabetes Research Foundation (JDRF) was founded in 1970 by the patients of diabetic children to promote research into a cure….”

Note the intended focus for JDRF on a cure for type 1 diabetes.  For-profit corporations wish to treat everything and cure nothing.  There is no money to be made in curing things.  That is what universities and government agencies do.  Yet JDRF has made a conscious decision to begin switching its focus from working with academics to working with corporations. 

“In late 2013 JDRF announced that it was ‘going the equity route,’ joining with PureTech Ventures, a for-profit venture capital firm, to create a fund to fuel new diabetes start-ups.”

The logic JDRF uses to justify that change is that the increased revenue from funding advances in diabetes treatments will allow it to fund even more advances in treatments.  That might fly if advances in treatments were still contributing to improved lives for the patients.  Carolyn Y. Johnson discusses the impact of commercial development on diabetes sufferers in a Washington Post article: Why treating diabetes keeps getting more expensive. 

The intent of the discoverers of insulin to make it a “gift to humanity” has not worked out so well.  Pharmaceutical companies have managed to come up with new versions of the drug which allow them to gain new patents and continue to increase the cost. 

The original source of insulin was extraction from animals, a relatively expensive and inefficient process that occasionally was accompanied by side effects.  Yet the cost to diabetics was minimal.

“Irl Hirsch remembers when insulin cost 75 cents a vial. The 58-year-old doctor has used insulin for more than half a century and knows firsthand that pricing and access weren’t an issue for much of that time.”

“Drugstore ads from the 1960s published in The Washington Post advertised insulin for as little as 84 cents a vial — less than a bottle of Breck shampoo, three bags of Halloween candy bars or a can of Suave hair spray. The most expensive version listed in the ad was less than $2 a vial.”

Drug companies eventually produced microbes that could reproduce exactly the insulin produced by humans, a much more efficient process that held the promise of unlimited supply and ever cheaper costs.

“The modern age of insulin innovation kicked off with Eli Lilly’s introduction of Humulin, in 1982. Using genetic engineering, biologists figured out a way to modify bacteria into tiny, specialized factories that could create insulin that matches the kind the human body produces. Allergic reactions became rare as more people used the newer version.”

“Humulin could be created in vats instead of harvested from cows or pigs, and it relieved doctors’ worries that the looming diabetes epidemic would cause a shortage.”

But lowering costs is not a viable business model in our medical system. Rather, it makes more sense to continually tweak the product being sold in order to maintain patent protection and to justify continuous price increases.

“A version of insulin that carried a list price of $17 a vial in 1997 is priced at $138 today. Another that launched two decades ago with a sticker price of $21 a vial has been increased to $255.”

Developments have made life for those with diabetes simpler and more comfortable, but definitely not cheaper.  Many patients are shielded from this price rise by insurance plans.  Costs rise and show up in premium increases but direct payment is relatively stable.  It is those who are not insured, or those who are on Medicare, that notice the enormous growth in list prices.

The critical question is: “Are the new developments worth the cost to patients?”  Unless one works in the pharmaceutical industry, the answer seems to be no.

“’I don’t think it takes a cynic such as myself to see most of these drugs are being developed to preserve patent protection,’ said David Nathan, a Harvard Medical School professor. ‘The truth is they are marginally different, and the clinical benefits of them over the older drugs have been zero’.”

In Rosenthal’s view, JDRF has bought into a scheme whereby ever more advances will add to cost but will only marginally improve the lives of those it was created to protect.  And furthermore, it is putting those it represents at increased financial risk, clearly not what its founders had in mind.

Rosenthal compares JDRF’s excitement about new and more expensive products with its lack of interest in potential cures.  Dr. Denise Faustman, a professor at Harvard Medical School, has been searching for a cure for type 1 diabetes for years.  She discovered a possible pathway that makes use of BCG, a long-used and thus generic vaccine against tuberculosis.

“Dr. Faustman discovered that BCG was powerful enough to reverse type 1 diabetes in genetically predisposed mice.  More exciting still, she found that mice with diabetes of long duration would start producing insulin once again after treatment with BCG.  The results were heralded as thrilling and widely circulated when published in 2001, but further testing was obviously needed with human trials.”

But who would fund clinical testing of a potential diabetes cure?  The pharmaceutical industry had no interest because there was no way to make a profit.  Surprisingly, and disturbingly to Rosenthal, the JDRF has shown no interest in supporting Faustman’s work.  Could it be that big-time medical philanthropies have business plans and organizations that need to be protected from cures as well?

Faustman has been able to push along her work with the help of donations, mainly from the Iacocca Foundation, and has managed to conclude a phase 1 study on the use of BCG that was approved by the FDA.  She is currently trying to gather about $25 million needed to move to a phase 2 clinical study.  That amount of money is nothing within the vast consumption in the medical industry.

Rosenthal was moved to install this “economic rule” in second place on her list “Economic Rules of the Dysfunctional Medical Market.”

“A lifetime of treatment is preferable to a cure.”

She also included this quote by a JDRF critic.

“’If the March of Dimes was operating according to today’s foundation models, we’d have iron lungs in five different colors controlled by iPhone apps, but we wouldn’t have a cheap polio vaccine,’ said Dr. Michael Brownlee, the Anita and Jack Salz Chair in Diabetes Research Emeritus at the Albert Einstein College of Medicine…”

The interested reader might find the following articles informative:

Drug Companies: Turning Charitable Giving Into Excessive Profits

Pricing Pharmaceutical Drugs: An Oligopoly in Action

Drugs, Pharmacy Benefit Managers, and Perverse Incentives to Raise Prices

White Nationalists Generate an Activist Response from the Left: Antifa

Peter Beinart produced an unusually timely article for The Atlantic: The Rise of the Violent Left.  It was written before what has been called “The Battle of Charlottesville,” but it arrived in the mailbox just as events there were unfolding.  In it, he introduces a growing movement that goes by the name Antifa, which is a shortening of some version of a label consisting of the term anti-fascism.

There were anti-fascist groups active in Europe in the 1920s and 1930s as fascism became popular.  Anti-fascist activism came to the fore again when neo-Nazi movements sprouted in Germany after the fall of the Berlin Wall.  Various other objectionable groups have appeared throughout Europe over the years and kept the antifa groups active.  It was inevitable with the candidacy and the presidency of Donald Trump that neo-Nazi and white supremacy groups would become more visible.  The equally inevitable response was that European-style activism would spread to the United States.  Beinart suggests that several widely reported events tinged with violence have already occurred and are likely associated with this movement.

“On Inauguration Day, a masked activist punched the white-supremacist leader Richard Spencer. In February, protesters violently disrupted UC Berkeley’s plans to host a speech by Milo Yiannopoulos, a former Breitbart.com editor. In March, protesters pushed and shoved the controversial conservative political scientist Charles Murray when he spoke at Middlebury College, in Vermont.”

“The movement’s secrecy makes definitively cataloging its activities difficult, but this much is certain: Antifa’s power is growing. And how the rest of the activist left responds will help define its moral character in the Trump age.”

White nationalists have long resorted to violence.  The events in Charlottesville indicate there is no reason to expect that tendency to disappear.  There is also widespread concern among liberals that Donald Trump is an existential threat to our polity.

“For progressives, Donald Trump is not just another Republican president. Seventy-six percent of Democrats, according to a Suffolk poll from last September, consider him a racist. Last March, according to a YouGov survey, 71 percent of Democrats agreed that his campaign contained ‘fascist undertones’.”

So this is the question that progressives must ask themselves.

“….If you believe the president of the United States is leading a racist, fascist movement that threatens the rights, if not the lives, of vulnerable minorities, how far are you willing to go to stop it?”

The official position of the Democratic politicians is that the right to assembly and to express noxious opinions is sacrosanct.  They will counter Trump as best they can and plan for regaining control of government in future elections.  Is playing by the rules going to be enough?  The antifa crowd thinks not.

The purpose of antifa is to prevent the white nationalists from even having a forum to express their opinions and they are willing to use violence to make that happen.  Can this possibly work as a long-term strategy?

Beinart fears that the antifa activists will be counterproductive and encourage the growth of the very groups they are contending against.

“Antifa’s perceived legitimacy is inversely correlated with the government’s. Which is why, in the Trump era, the movement is growing like never before. As the president derides and subverts liberal-democratic norms, progressives face a choice. They can recommit to the rules of fair play, and try to limit the president’s corrosive effect, though they will often fail. Or they can, in revulsion or fear or righteous rage, try to deny racists and Trump supporters their political rights. From Middlebury to Berkeley to Portland, the latter approach is on the rise, especially among young people.”

“Revulsion, fear, and rage are understandable. But one thing is clear. The people preventing Republicans from safely assembling on the streets of Portland may consider themselves fierce opponents of the authoritarianism growing on the American right. In truth, however, they are its unlikeliest allies.”

Mark Bray is a visiting historian at Dartmouth College.  He has studied anarchy and anarchical movements in the past, a label that is probably appropriate for the antifa activists.  Bray has a book titled Antifa: The Anti-Fascist Handbook coming out soon.  He seems somewhat sympathetic with need for activism and provides a perspective worth considering.  The following quotes are from Bray in an interview with Brooke Gladstone on WNYC (February 10, 2017).

When asked about the intention to prevent fascists from speaking, Bray replied:

“So, in your open you mentioned the popular slogan that liberals have adopted from Voltaire that, ‘I may disagree with what you have to say but I will defend to the death your right to say it.’ Anti-fascists fundamentally disagree with that premise. They argue that, given the horrors of Auschwitz and Treblinka, the destruction that Nazis have caused, that fascists, white supremacists shouldn’t be granted the right to express their ideas in public, in part because, they argue, had that been done earlier in the 1920s, the 1930s, we might have been able to bypass what ended up happening.”

Is that restriction of a fundamental right consistent with a free society?

“Germany has a prohibition against advocating for Nazis publicly. That doesn’t mean that Germany is a closed society where people can’t say whatever they want to say. You can have some prohibitions against speech without going all the way. In the context of an increasing number of hate crimes — the Southern Poverty Law Center cited over 800 such crimes immediately following the election of President Trump — the idea is that the people who carry out these crimes are listening to Richard Spencer speeches, going on Stormfront websites, imbibing this hateful doctrine, and that, to the degree that we can shut it down, we will have fewer people copy-catting them into attacking vulnerable populations.”

“Most people would agree that it was acceptable in the 1930s and 1940s to organize armed resistance to the Nazi regime. The question is: how terrible does it have to be before that becomes legitimate? And the anti-fascist answer is: you need to nip it in the bud from the beginning.”

People don’t mind limiting the free speech of leftists, why not apply the same rules to extremists on the right?

“The liberal ideal is that the government is a referee in a game that all parties are invited to play. But, in actual fact, whenever left groups have become threatening, you get Red Scares, you get repression, you get COINTELPRO in the 1960s and 70s. And so, anti-fascists are arguing that we want a political content to how we look at speech and society which is drastically different from a liberal take, and that this entails shutting down the extreme manifestations of fascism and neo-Nazism.”

How does antifa operate?

“Under that specific banner, it is still relatively new and it’s finding its way. But a lot of anti-fascist or Antifa groups have formed in different cities around the United States. A lot of what they do is researching information on local white supremacists, who they are, where they live, where they work—sometimes pressuring their employers to get them fired, sometimes making sure that if they organize private events at local venues for white supremacists, they try to pressure the venue owner to try to cancel the event. So, that research and coalition-building with groups that are affected by various forms of fascist or white supremacist violence is a lot of what’s done. What gets more of the headlines is when the demonstrations come out onto the street. And so, as I’m sure you and a number of listeners are well aware, there have been high-profile incidences recently, such as in Berkeley, of trying to physically shut down events, that has raised the profile of antifascism.”

Can this be a viable strategy?

“The question is: if we want to prevent something along the lines of what happened in the 1930s and 40s from happening again, how do we do it? And the liberal prescription for doing it is, essentially, free and open debate and dialogue, and if Nazis do something illegal then hopefully the police will stop them. Antifascists recognize that in the 1930s, 1940s, the police supported fascism. The fascists didn’t actually stage a revolution to come to power; they worked within the political system. And all the reasonable dialogue and debate that one could muster did not do the job. The argument is that, if we want such a horrific crime to not reoccur, it needs to be nipped in the bud, through a variety of tactics, but one of which is through violently disrupting Klan rallies, neo-Nazi speeches, and so forth.”

Bray provides this insight into the long-term goals of the antifa activists.

“The other thing to remember is that anti-fascists identify as communists, as anarchists, as socialists, and want to organize for a revolutionary rupture with the prevailing political system, and that this is in-line with that. That’s also another reason why the two philosophies don’t quite jibe.”

That last revelation by Bray, if correct, indicates that antifa activists are not a bunch of angry Democrats, they are something else entirely—something the Democrats have little control over.  On the Republican side of the ledger, that party is dominated by a president who considers their politicians his personal servants who are to do as they’re told.  They own the government but have little control over it—or at least they have not yet chosen to exercise much control over their president.

If both the white nationalists and the antifa activists are propagating objectionable viewpoints and both are willing to resort to violence, can the future hold anything but escalation.  The extremists on the right would seem to have much more firepower when it comes to violence.  There are already moves afoot to call upon armed right-wing militia groups to provide protection instead of depending on police.  That cannot end well.

Perhaps the thing that needs to be nipped in the bud is the Trump presidency.  Perhaps the sight of armed battles occurring on our city streets might awaken Republican politicians from their reveries of massive tax cuts and arouse them sufficiently to finally do the honorable thing and send their president to history’s junkyard.  When white nationalist demonstrators are shouting “Heil Trump,” something has to happen.

We are certainly living in interesting times.

The interested reader might find the following articles informative:

Trump and Populism: Be Very Afraid

The Long List of Murders Committed by White Extremists Since the Oklahoma City Bombing

A Witness toTerrorism in Charlottesville

Inequality, Race, and Political Polarization

Keith Payne is a professor of psychology at the University of North Carolina whose specialty is the psychology of inequality and discrimination.  He has produced an interesting and enlightening book titled The Broken Ladder: How Inequality Affects the Way We Think, Live, and Die.

Payne argues from psychological and anthropological studies that humans are wired in such a way that they are constantly monitoring their surroundings and interactions with others in order to ascertain whether or not they are maintaining their status level.  He also argues that objective indicators of status, such as wealth, educational achievement, and job title, are often less important than subjective feelings of status as experienced by each individual.  Rather, presumed status seems to depend on how we compare ourselves to those we choose as peers.

Payne asks us to consider levels of status as rungs on a ladder.

“It is true that, on average, people with higher incomes, more education, and more prestigious jobs do rate themselves higher on the ladder.  But the effect is relatively small.  In a sample of, say, a thousand people, some will rate themselves at the top, others will rate themselves at the bottom, and many will be in between.  But only about 20 percent of their self-evaluation is based on income, education, and job status.”

Poor persons can feel comfortable with their status if their peers, to whom they compare themselves, are in similar situations.  On the other hand, a mere millionaire who lives in a world of multimillionaires can experience the stress normally associated with poverty.  That is an important concept to grasp.

“….inequality is not the same thing as poverty, although it can feel an awful lot like it….Inequality makes people feel poor and act poor, even when they’re not.  Inequality so mimics poverty in our minds that the United States of America, the richest and most unequal of countries, has a lot of features that better resemble a developing nation than a superpower.”

The health and longevity problems that are associated with poverty have been well documented.  What Payne is saying is that the same problems arise for people who are not objectively poor, but who merely feel poor because they suffer a status deficit.  Inequality then includes not only those who are of low income and are objectively poor, but those who have sufficient income to not be considered poor yet feel poor.

“We have to take subjective perceptions of status seriously, because they reveal so much about people’s fates.  If you place yourself on a lower rung, then you are more likely in the coming years to suffer from depression, anxiety, and chronic pain.  The lower the rung you select, the more probable it is that you will make bad decisions and underperform at work.  The lower the rung you select, the more likely you are to believe in the supernatural and in conspiracy theories.  The lower the rung you select, the more prone you are to weight issues, diabetes, and heart problems.  The lower the rung you select, the fewer years you have left to live.”

“Let me be clear that I am not simply asserting that, if you are poor, then all of these things are more likely to happen to you.  I am stating, rather, that these things are more likely to happen to you if you feel poor, regardless of your actual income.”

In previous articles we discussed Payne’s conclusions on how inequality affects health and longevity and how it increases tendencies to believe in conspiracy theories and to be religious.  Here, the subject will be Payne’s observation that inequality and political polarization appear to be related.

Payne presents some rather compelling indications that the nation’s politics have become more polarized over the years and that inequality has something to do with it.  There are numerous studies that have been made of the degree to which members of one party are likely to vote with members of the other party on the various policy issues that arise.  All such investigations arrive at the same conclusion: bipartisan voting has become very rare.  A plot of one measure of this polarization against the Gini index (a measure of income inequality) for the United States provides an impressive correlation.

Payne also claims that this polarization consists of not only disagreement on policy issues, but it is also characterized by distrust and a lack of respect between the parties.  To support this contention he describes the results of PEW polls taken over past decades.

“Polls from the Pew Research Center have revealed that the percentage of ordinary Americans who have a ‘very unfavorable’ opinion of the opposing political party has steadily grown over the last three decades as inequality has increased.  In 2014, about a third of respondents thought members of the opposite party were not just mistaken, but were a threat to the nation’s well-being.  A third of conservatives and a quarter of liberals said that they would be upset if a family member married someone of the wrong party.  These trends are dangerous, because when opponents become enemies, people can justify almost anything in responding to them.”

But correlation does not prove causation.  We must evaluate Payne’s reasoning in concluding inequality as a causative factor.

He tallies a number of the ways in which liberals and conservatives differ in thought processes and worldviews.  Of particular relevance are the differences in the way the two types view inequality within society.  In short, conservatives tend to view inequality as a necessary consequence of unwise choices made by individuals; liberals tend to see inequality as an inevitable consequence of a socioeconomic system with defects that should be corrected.

“The….fundamental distinction between conservatives and liberals is their willingness to accept inequality.  Again, most conservatives do not want inequality for its own sake.  Instead, they view it as an outcome of an emphasis on individual rights, abilities, and responsibilities.  When individuals outcompete others, the result is always some degree of inequality.”

“Liberals….see individual merit as just one factor among many that determines success or failure in a competitive market.  They tend to consider the economic system as a whole rather than just the individual players within it, which means taking into account such factors as monopolies, old-boy networks, institutional racism and sexism, and cycles of advantage and disadvantage that shape people’s outcomes for reasons that have nothing to do with individual virtues.”

Liberal and conservative tendencies are not totally innate and immutable characteristics.  Most people can and do change their outlooks as conditions change.  In particular, threats to social order seem especially powerful in moving people to the right politically.

“In study after study, subjects who see the world as a threatening and dangerous place tend to be more politically conservative.  Those who see the world as safe, and are motivated by exploring and trying new experiences, tend to support more liberal views.”

Payne resorts to additional psychological studies to arise at a connection between increasing inequality and political polarization.  He begins with this observation.

“The fact is that the higher a person’s income is, the more likely he is to vote Republican.  The richest third of the population votes more Republican than the middle third, who vote more Republican than the bottom third.”

This suggests that wealth and the status that comes with it prompts a conservative viewpoint.  Remember that one of Payne’s central tenets is that it is the subjective feeling of status that is more important than objective measures of status such as wealth.

Payne and others constructed an investment game in which participants would earn money from picking stocks in which to invest.  Information was provided on the various stocks to give the impression of real consequences from decisions made, but the game was rigged and some were told they performed much better than most while others were told they performed much worse than most.  The purpose was to create subsets of high status winners and low-status losers and evaluate how their artificially created status affected their reasoning. 

To make the game politically relevant, a redistribution function was imposed in which the winners were taxed a certain percentage in order to provide funds to the losers before moving on to a replaying of the game.  Participants were also allowed to propose changes to the way the game would be played in future rounds, including modifications in the rules for how voting on changes would be carried out.  To make the game even more politically relevant, players were provided the opinions of others on how the rules should be modified.

An interesting—and troubling—effect was noted.

“As expected, subjects judged the other player to be more incompetent, more biased, and less rational when he disagreed with the subject than when he agreed.  When we looked closer at the data, though, we noticed an interesting detail: The perception of the other player as biased and irrational was driven entirely by the group who were told that they did better than their peers.  Something about feeling superior in profits made people feel superior to other players about their opinions also.”

As Payne explains, a person feeling high in status will believe themselves to be in command of the facts and view lower status people with a bit of disdain.

“If I see the world as it is and you disagree with me, then I have only a few possible interpretations of your behavior: You might be incompetent, you might be irrational, or you might be evil.”

Payne presents this summary of his results and the conclusion that he draws.

“The subjects who thought their earnings were inferior wanted to increase redistribution….But they wanted everyone’s vote to count equally, regardless of whether the other player agreed or disagreed with them.  The subjects who thought they were superior wanted to reduce redistribution, and they also voted to reject the votes of those who disagreed with them.  The more they saw the other player as incompetent and irrational, the less they wanted his vote to count.”

“This research was the first to show that feeling superior in status magnifies our feeling that we see reality as it is while our opponents are deluded.  It supports the idea that as the top and the bottom of the social ladder drift farther apart, our politics will become more divisive.  That is exactly what has happened over the past several decades.”

Payne provided some interesting insights with his study, but basing his conclusion on it seems a leap too far.  His game produced artificial feelings of status.  In politics, there are real feelings of status at play, and our polarized situation has roughly a 50-50 split between two parties where each views the other as incompetent, irrational, or evil.  An argument based on economic inequality alone would have a difficult time arriving at equal populations.

 Recall that Payne claimed that the standard indicators of status such as money, educational attainment, and job status, consisted of only about 20 percent of what determines a person’s view of his place in the hierarchy.  Consequently, some other driver of status must be activated in order to get the polarization we see.

Payne provides the data needed to provide a more compelling explanation for why inequality could be responsible for our polarized politics.  He had the disadvantage of writing his book before the Trump election results were available and perhaps assumed a primary effect was only secondary in importance.  Payne included a chapter on racial bias and inequality in which he concluded that race was an important political factor and racial bias was exacerbated by economic inequality.  He also presented this result based on numerous studies: while signs of explicit bias have retreated in recent years, implicit racial bias remains buried deep within most of our psyches.

“Having reflected on what a fundamentally good person you are, you will conclude that implicit bias is other people’s problem.  Although we would all like to believe ourselves to be members of the ‘not racist’ club, we are all steeped in a culture whose history and present is built on massive racial inequality.  Research has shown that a majority of even well-meaning people—and their children—show signs of implicit bias when tested.”

It is difficult to view Payne’s chart illustrating the rise of political polarization tracking increasing economic inequality without recognizing that another powerful change was taking place at the same time.  Starting in the 1970s, the Republican Party began a transformation from one with conservative-fiscal and moderate-social policies to one dominated by the former slave states of the South.  Those states once provided reliably Democratic voters on issues that didn’t affect white racial dominance, but they became disenchanted with that party when it strongly supported civil rights for blacks.  Both Nixon and Reagan sent out messages to unhappy segregationists letting them know that they would be welcome in the Republican Party.  And so they came and drove away most moderates.

Another significant event was the election of Barack Obama in 2008.  It was no accident that Republicans took polarization to new levels when he took office.  And it was no coincidence that the Tea Party arose from the Republican ranks at about the same time.  Nor was it coincidental that hate groups and armed militias—training for the day when they would have to overthrow the government—formed in unprecedented numbers across the nation.

The Tea Party seems to informally include the core of the Republican voters.  They are neither rich nor poor, but mainly middle class.  They do not hate the rich elite; they admire them and wish they could emulate them. They divide the world into themselves, the “makers,” and those demanding assistance, the “takers.”  The explanation for Payne’s curve likely resides not in income inequality directly, but how diminished economic prospects for the middle class threatened their status as privileged whites.  To see how this works we will turn to an anthropological study of the people of Louisiana.

Arlie Russell Hochschild has produced a fascinating and enlightening volume evaluating the differences between liberals and what might be generalized as Tea Party conservatives in Strangers in Their Own Land:Anger and Mourning on the American Right.  She is a sociology professor at the University of California at Berkeley who was disturbed and puzzled by the increasing political polarization within the nation.  She chose Louisiana because it appeared to be an extreme representative of the states of the South.

“In the 2012 election, in the nation as a whole, 39 percent of the white voters voted for Barack Obama.  In the South, 29 percent did.  And in Louisiana, it was 14 percent—a smaller proportion than in the south as a whole.  According to one 2011 poll, half of the Louisianans support the Tea Party.”

She set up shop in Lake Charles, Louisiana and set about meeting and talking to people.  She would come back a number of times to re-interview Louisianans over a period of about five years.  She was interested more in the why of their attitudes than the what of their political beliefs.  People are driven by their emotions.  What was the emotional core driving the Tea Party in Louisiana?

Hochschild digested what she was learning and managed to assemble a description that captures and illustrates the perspective shared by those she encountered in Louisiana.  She refers to it as a “deep story,” a concept that is a bit hard to describe, but is clear once an example is provided.

“The deep story here, that of the Tea Party, focuses on relationships between social groups within our national borders.  I constructed this deep story to represent—in metaphorical form—the hopes, fears, pride, shame, resentment, and anxiety in the lives of those I talked with.  Then I tried it out on my Tea Party friends to see if they thought it fit their experience.  They did.”

This is Hochschild’s deep story.

“You are patiently standing in a long line leading up a hill, as in a pilgrimage.  You are situated in the middle of this line, along with others who are also white, older, Christian, and predominately male, some with college degrees, some not.”

“Just over the brow of the hill is the American Dream, the goal of everyone waiting in line.  Many in the back of the line are people of color—poor, young and old, mainly without college degrees.  It’s scary to look back; there are so many behind you, and in principle you wish them well.  Still, you’ve waited a long time, worked hard, and the line is barely moving.  You deserve to move forward a little faster.  You’re patient but weary.  You focus ahead, especially on those at the very top of the hill.”

Hochschild’s Louisianans agreed that the ordering in the waiting line was appropriate.  Whites come first and then come blacks and other minorities.  It was income inequality that was slowing the line down, and it had the effect of narrowing the gap between whites and the blacks following behind them.  In fact, as the “deep story” continues, blacks and women and others were beginning to butt in line in front of them.  They suspected that someone must be providing assistance to the interlopers.  Barack Obama was, of course, the prime example of those getting ahead of them—unfairly.

“And President Obama: how did he rise so high?  The biracial son of a low-income single mother becomes president of the most powerful country of the world; you didn’t see that coming.  And if he’s there, what kind of a slouch does his rise make you feel like, you who are supposed to be so much more privileged?  Or did Obama get there fairly?  How did he get into an expensive place like Columbia University?  How did Michelle Obama get enough money to go to Princeton?  And then Harvard Law School, with a father who was a city water plant employee?  You’ve never seen anything like it, not up close.  The federal government must have given them money.  And Michelle should feel grateful for all she has but sometimes she seems mad.  She has no right to feel mad.”

Any attempt to help the poor and unfortunate places their position of privilege at risk.  They don’t want help and don’t expect anyone else to get any either.  Hochschild has sympathy and affection for many of the people she has met.  She describes them as friendly and generous.  However, most of their generosity seems to be reserved for their own communities and their social equals.  Embedded in her deep story is the notion that the poor and unfortunate should take care of themselves and not bother them as they look towards reaching their American Dream. 

“For the right today, the main theater of conflict is neither a factory floor nor an Occupy protest.  The theater of conflict—at the heart of the deep story—is the local welfare office and the mailbox where undeserved disability checks and SNAP stamps arrive.  Government checks for the listless and idle—this seems most unfair.  If unfairness in Occupy is expressed in the moral vocabulary of a ‘fair share’ of resources and a properly proportioned society, unfairness in the right’s deep story is found in the language of ‘makers’ and ‘takers.’  For the left, the flashpoint is up the class ladder (between the very top and the rest); for the right it is down between the middle class and the poor.  For the left, the flashpoint is centered in the private sector; for the right, in the public sector.”

So income inequality produces social conflict which gets reproduced in our political life, but the effect of inequality is not always what one would expect.  Whereas people on the left see conflict between a tiny wealthy elite and the rest of the nation, the right admires the elite and wishes they could join them.  For the right—in today’s Republican Party— the conflict is between the white middle class and the poor.

Hochschild’s story was developed in the South, but the emotions and resentments she discovered there are not limited geographically.  As Payne pointed out, racial bias was public policy in the United States for centuries.  That cultural history is not overcome in a moment.  We are only about two generations from the point when open discrimination became illegal.

Donald Trump was elected because he was able to recognize the resentments and fears of middle class whites and convince them that they were not forgotten; rather, he convinced them he would now be their champion.

The interested reader might find the following articles informative:

Inequality, Poverty, and Social Dysfunction

Inequality, Conspiracy Theories, and Religious Belief

Strangers in Their Own Land: Republican Voters in the South

Race and Politics in the United States: White Racial Dominance as Policy

Race and the Criminalization of Welfare

The Obama Effect: A Plague of Haters, Antigovernment "Patriots," and Militias

Inequality, Conspiracy Theories, and Religious Belief

Keith Payne is a professor of psychology at the University of North Carolina whose specialty is the psychology of inequality and discrimination.  He has produced an interesting and enlightening book titled The Broken Ladder: How Inequality Affects the Way We Think, Live, and Die.

Humans are animals evolved from species that form hierarchical ladders where there were alpha apes and status ranks for everyone else.  With status came privilege.  It is likely that early human groups spent much of their time with the same status concerns as our ape ancestors.  While humans have evolved their own unique properties over time, the tendency for human groups to form a hierarchy is still present.  All human assemblies tend to arrive at a leader and various levels of followers.  While precise hierarchical levels tend to exist mainly in military organizations, all members of the assembly will be conscious of their status and concerned that they are treated fairly given their status.

Payne uses the symbol of a ladder on which people project their assumed positions to illustrate inequality and its consequences in human organizations.  He further concludes from psychological studies and from anthropological arguments that humans are wired to continuously monitor their environment for signs of status loss or status gain.  This activity is innate and usually takes place subconsciously.

“….no one ever mentions something that we know to be true, both from scientific studies and from simply being human: ‘I crave status’.”

When asked to assess their status by placing themselves on the rungs of a ladder, it becomes clear that people view their status in ways that are only slightly related to the presumed status markers of income, education and type of job.  Rather, presumed status seems to depend on how we compare ourselves to those we choose as peers.

“It is true that, on average, people with higher incomes, more education, and more prestigious jobs do rate themselves higher on the ladder.  But the effect is relatively small.  In a sample of, say, a thousand people, some will rate themselves at the top, others will rate themselves at the bottom, and many will be in between.  But only about 20 percent of their self-evaluation is based on income, education, and job status.”

Poor persons can feel comfortable with their status if their peers, to whom they compare themselves, are in similar situations.  On the other hand, a mere millionaire who lives in a world of multimillionaires can experience the stress normally associated with poverty.  That is an important concept to grasp.

“….inequality is not the same thing as poverty, although it can feel an awful lot like it….Inequality makes people feel poor and act poor, even when they’re not.  Inequality so mimics poverty in our minds that the United States of America, the richest and most unequal of countries, has a lot of features that better resemble a developing nation than a superpower.”

The health and longevity problems that are associated with poverty have been well documented.  What Payne is saying is that the same problems arise for people who are not objectively poor, but who merely feel poor because they suffer a status deficit.  Inequality then includes not only those who are of low income and are objectively poor, but those who have sufficient income to not be considered poor yet feel poor.

“We have to take subjective perceptions of status seriously, because they reveal so much about people’s fates.  If you place yourself on a lower rung, then you are more likely in the coming years to suffer from depression, anxiety, and chronic pain.  The lower the rung you select, the more probable it is that you will make bad decisions and underperform at work.  The lower the rung you select, the more likely you are to believe in the supernatural and in conspiracy theories.  The lower the rung you select, the more prone you are to weight issues, diabetes, and heart problems.  The lower the rung you select, the fewer years you have left to live.”

“Let me be clear that I am not simply asserting that, if you are poor, then all of these things are more likely to happen to you.  I am stating, rather, that these things are more likely to happen to you if you feel poor, regardless of your actual income.”

In an earlier article we discussed the connection between inequality and health, longevity, and the impulse to make unwise decisions.  Here the focus will be on Payne’s claim that feeling poor or unequal will tend to make you more likely to “believe in the supernatural and in conspiracy theories.”

The various studies that psychologists perform to try and understand why humans do the things they do have firmly supported the conclusion that our brains come wired in such a way that we have a need to believe that the world is an orderly place where things that happen have explanations.  This need is strong enough that we will, at times, be moved to invent explanations where none exist.  The psychologists also tell us that this need becomes stronger at times when we feel most powerless.  The collateral effects of being poor and the similar effects of feeling poor that inequality creates then feed this need to have explanations and result in a tendency to believe in conspiracy theories and the supernatural.

“This assumption that the world is orderly and predictable is a kind of mental bedrock that forms the foundation for all of our perception, thinking, and believing.  We are so good at generating regular patterns that it can at times interfere with our ability to recognize that no pattern exists at all.”

“We are especially likely to manufacture meaningful patterns when we feel powerless.  The predictability, and therefore controllability, of patterns provides a bit of solace from the lack of control.”

Payne tells us that about 50 percent of the population will believe in various conspiracy theories at any given time.  Which theories are prevalent will depend on the circumstances of the moment, but they will have a common theme: a person or a group with power is in control and is causing things to happen.

“People who feel powerless tend to believe in conspiracies carried out by the powerful.”

“At bottom, conspiracy theories are about two things: power and distrust.  You can see the former at work in who believes which theories about whom.  The best predictor of which conspiracy theories people believe at any given time is which political party is in power.”

Distrust, particularly of government, drives a need for a more satisfying explanation of what is going on than is officially provided—and confirmation that someone is in charge of events.

“Distrust—not facts or logic—made even contradictory theories seem more plausible than the official account.  To believe in a conspiracy, you trade a bit of your belief that the world is good, fair, and just in exchange for the conviction that at least someone—anyone—has everything under control.”

This need to see a believable pattern in events has ramifications not only with respect to the judgment of physical facts, but also with respect to moral interpretations as well.  Payne recounts a famous experiment in which a young woman was attached to wires and subjected to a learning and memory test.  Each time she made a mistake she reacted as if in pain.  Observers were told that she was being given an electric shock each time she made a mistake.  The observers did not know that the shocks were staged and not real.  The girl made many mistakes and the lesson went on for a long time.  One might expect this situation to generate sympathy for the girl, but, as the experimenters expected, the opposite happened.

“This poor subject was suffering for the sake of a silly study, and the observers had every reason to feel sympathetic toward the poor victim.  And yet, they deplored her….[they] called her unlikeable and immature,  They said it would be hard to admire or respect someone like her and they would not like to get to know her.”

“In order to maintain the certitude that the world was fair, subjects manufactured flaws in the woman’s character.  Just as your visual system fills in the scene with assumptions to render the world sensible, so does your moral reasoning.  Good things happen to good people, and bad things happen to bad people.  Something bad is happening to this woman.  Therefore, she must be a bad person.  All is well.”

Consider the distaste the Republican Party has for welfare policies.  In particular, focus on the Tea Party’s division of the world into makers and takers.  The good people of the world, the makers, deserve to have good things happen to them.  The people in need of welfare, the takers, must be bad people who deserve their misfortune.  All is well.

Given the human need to perceive a credible pattern in events and to believe that someone—anyone—is in charge of affairs, is it any wonder that religious beliefs would be popular in certain circumstances and at certain times?

“Monotheistic religions provide believers with the reassurance that a benevolent, all-knowing, and all-powerful being is controlling the universe.  This type of belief system offers many benefits.  Unlike conspiracy theories, which provide controllability but at the expense of benevolence, religious belief is the ultimate win-win.”

“If feeling powerless and insecure makes people more prone to see patterns and to give credence to conspiracy theories, it stands to reason that it would also intensify religious faith.  Studies by Aaron Kay have confirmed that when individuals are made to feel helpless or when the world is portrayed as chaotic and unpredictable, they hold stronger convictions in a powerful God who controls the universe.”

Given these claims, one would expect religion to flourish where poverty and inequality are high and to retreat where they are low.  That is exactly what is observed.

“….psychologists Kurt Gray and Daniel Wegner looked at the U.S. states where people had more or fewer hardships in their lives by compiling statistics on infant mortality, cancer deaths, infectious disease, violent crime, and environmental hazards.  They combined these maladies into a single ‘suffering index’ and plotted it against the proportion of people in each state who stated in polls that they strongly believed in God.”

“….the researchers found that anguish does not pose a theological problem for most believers.  Quite the opposite.  Like the biblical Job, the more people suffered, the more they believed in God.”

Payne also provides another demonstration of the dual nature of inequality and poverty and the universal need for access to a source of “answers.”  The previous results suggest that as nations become wealthier the degree of “suffering” and powerlessness will diminish and people will have less need for religion.  The following chart plots a measure of religiosity versus national per capita GDP (income).

This data does support the notion that increased wealth will lead to decreased need for religion.  Note, however, that there are two distinct outliers from the general trend: China and the United States.  China has long discouraged organized religions so its low ranking might not be surprising.  Payne refers to the United States as the most unequal of the wealthier nations.  Would inequality possess an equivalence to low wealth in terms of social dynamics?

“After accounting for the difference between communist and noncommunist countries, China was no longer an outlier.  Even more important, though, was the role of income inequality.  Highly unequal countries were much more religious than more equal ones.  The effects of inequality were huge, and about as large as the effects of actual income.  Once the data were plotted to show the relationship between religion and income inequality (rather than average income), the United States was no longer an outlier but fell right along the line where it would be expected to be, high in both inequality and religiosity.  Poverty and inequality together can explain the bulk of the differences across countries in religiosity.”

To the scientifically minded who like to argue  with religious believers about logical or historical inconsistencies within their belief systems, this scientific data should be telling them that they are wasting their time.  The data suggests that people are attracted to religion not by dogma, but by the alleviation of the social needs it provides.

Payne provides convincing arguments that poverty and inequality are related in the way they affect human social responses.  Both are bad. 

The interested reader might find the following article informative:

Inequality, Poverty, and Social Dysfunction