The Broken Ladder | Keith Payne

Summary of: The Broken Ladder: How Inequality Affects the Way We Think, Live, and Die
By: Keith Payne

Introduction

In ‘The Broken Ladder,’ author Keith Payne investigates how income inequality affects not only the way we think and feel about ourselves but also our overall well-being. This book dives into how feeling poor, sometimes even in spite of considerable material wealth, can lead to a whole host of issues such as depression, anxiety, health problems, and bad decision-making. Why does this happen? It seems to boil down to our innate drive to compare ourselves with others. Our happiness is often determined by our perception of how we measure up to those around us. Through a series of experiments and real-life examples, Payne demonstrates how inequality is harmful to our mental, emotional, and physical health, all while exploring potential solutions to mitigate these negative effects.

Beyond Material Wealth

The impact of social comparison on our perception of wealth and poverty is explored in this book summary. The author argues that our sense of financial security is influenced by how our lifestyle compares to that of others, rather than our actual material wealth.

Have you ever visited an old castle and romanticized the notion of living like a medieval lord? Imagine the luxury of enjoying a feast, strolling in well-manicured gardens, and owning everything your heart desires. However, if we take into account the nitty-gritty of daily life, living in a seventeenth-century palace suddenly becomes less alluring. By today’s standards, the illustrious Louis XIV endured abject deprivation without luxuries like hot water, air conditioning, or microwaves.

The crucial message conveyed in this well-put-together book is that one’s perceived level of financial security, or lack of it, has less to do with tangible possessions and more with social comparison. Research shows that only 20% of people who report feeling impoverished are genuinely poor. The question arises: why do so many individuals deem themselves poor when their income level places them firmly in the middle or upper-middle social class?

For instance, consider a family doctor making $200,000 annually. She is probably living in a large house, driving a nice car, and possesses many luxurious items. While she may have everything she wishes for, comparing herself to her neighbor, a brain surgeon making $800,000, makes her feel poor. Depending on her expenses, she may even feel as if she is barely living from one paycheck to another. Although it may sound illogical, it is common.

If someone asked you how much money you earned, you could quickly answer. However, what if they asked if you earned adequate wealth? How would you determine what enough means or how to measure it? The book argues that we lack physiological sensors for answering such abstract questions; thus, we compare ourselves to others instead. If others seem to have more, suffer fewer financial problems, or enjoy a higher standard of living, we feel poor, irrespective of our actual income.

In conclusion, this book objectively looks at the impact of social comparison on our view of wealth and poverty both as a society and individually. It provides an interesting and informative take on material wealth nuances that one should consider, including our perception of it.

The Devastating Effects of Feeling Poor

Feeling poor, regardless of actual wealth, can lead to negative consequences such as depression, anxiety, chronic pain, weight issues, diabetes, heart problems, underperformance at work, and bad life decisions. This is because humans are highly attuned to social status and comparisons with others, leading to feelings of injustice and frustration when others appear to have a better hand dealt to them. With the increasing wealth gap in the world, this feeling of relative poverty is becoming more prevalent and can have serious implications on decision-making and risk-taking.

Inequality Shapes Our Choices

A study shows that people’s perception of their relative income position affects their risky behavior more than their actual income. Inequality causes people to engage in self-destructive behavior, even if they are objectively affluent. The experiment also revealed that those who feel poorer are more inclined to choose immediate benefit, while those who feel richer tend to wait for a larger payout. Inequality shapes our choices, not just as individuals, but as members of society.

Inequality Breeds Division

The growing inequality in society is a significant factor that contributes to political partisanship and social division, as proven by an experiment conducted by researchers. The study showed that people who believed they performed better than others saw those who disagreed with them as incompetent and irrational, ultimately leading to a desire to exclude them from decision-making. In contrast, people who saw themselves as low performers wanted everyone to have an equal vote despite disagreements. Magnifying one’s status and feeling superior towards others only fuels contempt for people with opposing opinions. Given these findings, it is no wonder that politics has become more divided and polarized as inequality continues to grow.

Status Matters for Health

Many wealthy countries have better health outcomes than poorer countries, but within these countries, people’s subjective status affects their health more than their actual income. Inequality and health are linked due to conditions associated with high-stress levels, which are higher in people experiencing economic hardship and low social status. Studies on monkeys and humans show that the feeling of being lower down in hierarchies leads to more stress and poorer health outcomes. Therefore, societies with high inequality have worse health outcomes than more equal ones.

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