0:00:00.926,0:00:03.571
It would be nice to be[br]objective in life,

0:00:03.571,0:00:05.593
in many ways.

0:00:05.593,0:00:08.971
The problem is that we have[br]these color-tinted glasses

0:00:08.971,0:00:13.650
as we look at all kinds of situations.

0:00:13.650,0:00:17.366
For example, think about[br]something as simple as beer.

0:00:17.366,0:00:19.548
If I gave you a few beers to taste

0:00:19.548,0:00:23.356
and I asked you to rate them[br]on intensity and bitterness,

0:00:23.356,0:00:27.053
different beers would occupy[br]different space.

0:00:27.053,0:00:29.810
But what if we tried[br]to be objective about it?

0:00:29.810,0:00:31.970
In the case of beer,[br]it would be very simple.

0:00:31.970,0:00:34.122
What if we did a blind taste?

0:00:34.122,0:00:36.846
Well, if we did the same thing,[br]you tasted the same beer,

0:00:36.846,0:00:40.817
now in the blind taste,[br]things would look slightly different.

0:00:40.817,0:00:43.039
Most of the beers will go into one place.

0:00:43.039,0:00:45.484
You will basically not[br]be able to distinguish them,

0:00:45.484,0:00:48.573
and the exception, of course,[br]will be Guinness.

0:00:48.573,0:00:50.801
(Laughter)

0:00:50.801,0:00:53.587
Similarly, we can think about physiology.

0:00:53.587,0:00:56.629
What happens when people expect[br]something from their physiology?

0:00:56.629,0:00:59.137
For example, we sold people[br]pain medications.

0:00:59.137,0:01:01.876
Some people, we told them[br]the medications were expensive.

0:01:01.876,0:01:03.757
Some people, we told them it was cheap.

0:01:03.757,0:01:06.729
And the expensive[br]pain medication worked better.

0:01:06.729,0:01:09.283
It relieved more pain from people,

0:01:09.283,0:01:12.787
because expectations[br]do change our physiology.

0:01:12.787,0:01:14.849
And of course, we all know that in sports,

0:01:14.849,0:01:16.667
if you are a fan of a particular team,

0:01:16.667,0:01:19.036
you can't help but see the game

0:01:19.036,0:01:22.541
develop from the perspective of your team.

0:01:22.541,0:01:26.717
So all of those are cases in which[br]our preconceived notions

0:01:26.717,0:01:30.157
and our expectations color our world.

0:01:30.157,0:01:33.559
But what happened[br]in more important questions?

0:01:33.559,0:01:37.111
What happened with questions[br]that had to do with social justice?

0:01:37.111,0:01:40.516
So we wanted to think about[br]what is the blind tasting version

0:01:40.516,0:01:43.581
for thinking about inequality?

0:01:43.581,0:01:45.880
So we started looking at inequality,

0:01:45.880,0:01:47.830
and we did some large-scale surveys

0:01:47.830,0:01:50.384
around the U.S. and other countries.

0:01:50.384,0:01:52.335
So we asked two questions:

0:01:52.335,0:01:55.701
Do people know what kind of[br]level of inequality we have?

0:01:55.701,0:01:59.812
And then, what level of inequality[br]do we want to have?

0:01:59.812,0:02:02.226
So let's think about the first question.

0:02:02.226,0:02:04.339
Imagine I took all the people in the U.S.

0:02:04.339,0:02:07.264
and I sorted them from[br]the poorest on the right

0:02:07.264,0:02:09.656
to the richest on the left,

0:02:09.656,0:02:12.318
and then I divided them into five buckets:

0:02:12.318,0:02:14.616
the poorest 20 percent,[br]the next 20 percent,

0:02:14.616,0:02:17.472
the next, the next,[br]and the richest 20 percent.

0:02:17.472,0:02:20.468
And then I asked you to tell me[br]how much wealth do you think

0:02:20.468,0:02:23.417
is concentrated in each of those buckets.

0:02:23.417,0:02:25.878
So to make it simpler,[br]imagine I ask you to tell me,

0:02:25.878,0:02:28.138
how much wealth do you think[br]is concentrated

0:02:28.138,0:02:30.398
in the bottom two buckets,

0:02:30.398,0:02:32.659
the bottom 40 percent?

0:02:32.659,0:02:35.351
Take a second. Think about it[br]and have a number.

0:02:35.351,0:02:37.255
Usually we don't think.

0:02:37.255,0:02:39.740
Think for a second,[br]have a real number in your mind.

0:02:39.740,0:02:41.365
You have it?

0:02:41.365,0:02:44.430
Okay, here's what lots[br]of Americans tell us.

0:02:44.430,0:02:46.357
They think that the bottom 20 percent

0:02:46.357,0:02:48.679
has about 2.9 percent of the wealth,

0:02:48.679,0:02:50.862
the next group has 6.4,

0:02:50.862,0:02:53.369
so together it's slightly more than nine.

0:02:53.369,0:02:56.782
The next group, they say, has 12 percent,

0:02:56.782,0:02:58.431
20 percent,

0:02:58.431,0:03:03.075
and the richest 20 percent, people think[br]has 58 percent of the wealth.

0:03:03.075,0:03:06.210
You can see how this relates[br]to what you thought.

0:03:06.210,0:03:07.951
Now, what's reality?

0:03:07.951,0:03:09.762
Reality is slightly different.

0:03:09.762,0:03:13.575
The bottom 20 percent[br]has 0.1 percent of the wealth.

0:03:13.575,0:03:16.826
The next 20 percent[br]has 0.2 percent of the wealth.

0:03:16.826,0:03:18.939
Together, it's 0.3.

0:03:18.939,0:03:22.468
The next group has 3.9,

0:03:22.468,0:03:24.651
11.3,

0:03:24.651,0:03:30.392
and the richest group[br]has 84-85 percent of the wealth.

0:03:30.392,0:03:33.358
So what we actually have[br]and what we think we have

0:03:33.358,0:03:35.331
are very different.

0:03:35.331,0:03:37.421
What about what we want?

0:03:37.421,0:03:39.418
How do we even figure this out?

0:03:39.418,0:03:40.829
So to look at this,

0:03:40.829,0:03:42.407
to look at what we really want,

0:03:42.407,0:03:45.472
we thought about[br]the philosopher John Rawls.

0:03:45.472,0:03:47.307
If you remember John Rawls,

0:03:47.307,0:03:50.557
he had this notion[br]of what's a just society.

0:03:50.557,0:03:52.039
He said a just society

0:03:52.039,0:03:54.754
is a society that if[br]you knew everything about it,

0:03:54.754,0:03:57.187
you would be willing[br]to enter it in a random place.

0:03:57.187,0:03:58.711
And it's a beautiful definition,

0:03:58.711,0:04:01.189
because if you're wealthy,[br]you might want the wealthy

0:04:01.189,0:04:03.226
to have more money, the poor to have less.

0:04:03.226,0:04:05.335
If you're poor, you might[br]want more equality.

0:04:05.335,0:04:07.339
But if you're going[br]to go into that society

0:04:07.339,0:04:10.659
in every possible situation,[br]and you don't know,

0:04:10.659,0:04:12.865
you have to consider all the aspects.

0:04:12.865,0:04:15.791
It's a little bit like blind tasting[br]in which you don't know

0:04:15.791,0:04:18.461
what the outcome will be[br]when you make a decision,

0:04:18.461,0:04:22.176
and Rawls called this[br]the "veil of ignorance."

0:04:22.176,0:04:25.783
So, we took another group,[br]a large group of Americans,

0:04:25.783,0:04:28.538
and we asked them the question[br]in the veil of ignorance.

0:04:28.538,0:04:32.648
What are the characteristics of a country[br]that would make you want to join it,

0:04:32.648,0:04:35.806
knowing that you could end[br]randomly at any place?

0:04:35.806,0:04:37.285
And here is what we got.

0:04:37.285,0:04:39.544
What did people want to give[br]to the first group,

0:04:39.544,0:04:41.727
the bottom 20 percent?

0:04:41.727,0:04:44.421
They wanted to give them[br]about 10 percent of the wealth.

0:04:44.421,0:04:47.021
The next group, 14 percent of the wealth,

0:04:47.021,0:04:52.384
21, 22 and 32.

0:04:52.384,0:04:55.890
Now, nobody in our sample[br]wanted full equality.

0:04:55.890,0:05:00.323
Nobody thought that socialism[br]is a fantastic idea in our sample.

0:05:00.323,0:05:01.611
But what does it mean?[br]

0:05:01.611,0:05:03.649
It means that we have this knowledge gap

0:05:03.649,0:05:06.307
between what we have[br]and what we think we have,

0:05:06.307,0:05:10.022
but we have at least as big a gap[br]between what we think is right

0:05:10.022,0:05:12.820
to what we think we have.

0:05:12.820,0:05:16.012
Now, we can ask these questions,[br]by the way, not just about wealth.

0:05:16.012,0:05:18.427
We can ask it about other things as well.

0:05:18.427,0:05:22.630
So for example, we asked people[br]from different parts of the world

0:05:22.630,0:05:24.348
about this question,

0:05:24.348,0:05:26.691
people who are liberals and conservatives,

0:05:26.691,0:05:28.735
and they gave us basically [br]the same answer.

0:05:28.735,0:05:31.217
We asked rich and poor,[br]they gave us the same answer,

0:05:31.217,0:05:32.518
men and women,

0:05:32.518,0:05:35.211
NPR listeners and Forbes readers.

0:05:35.211,0:05:38.440
We asked people in England,[br]Australia, the U.S. --

0:05:38.440,0:05:40.157
very similar answers.

0:05:40.157,0:05:42.928
We even asked different[br]departments of a university.

0:05:42.928,0:05:45.686
We went to Harvard and we checked[br]almost every department,

0:05:45.686,0:05:47.698
and in fact, from Harvard Business School,

0:05:47.698,0:05:51.410
where a few people wanted the wealthy[br]to have more and the [poor] to have less,

0:05:51.410,0:05:53.950
the similarity was astonishing.

0:05:53.950,0:05:56.774
I know some of you went[br]to Harvard Business School.

0:05:56.774,0:06:00.120
We also asked this question[br]about something else.

0:06:00.120,0:06:05.089
We asked, what about the ratio[br]of CEO pay to unskilled workers?

0:06:05.089,0:06:08.246
So you can see what[br]people think is the ratio,

0:06:08.246,0:06:12.147
and then we can ask the question,[br]what do they think should be the ratio?

0:06:12.147,0:06:14.774
And then we can ask, what is reality?

0:06:14.774,0:06:18.052
What is reality? And you could say,[br]well, it's not that bad, right?

0:06:18.052,0:06:20.205
The red and the yellow[br]are not that different.

0:06:20.205,0:06:24.125
But the fact is, it's because[br]I didn't draw them on the same scale.

0:06:26.105,0:06:30.015
It's hard to see, there's yellow[br]and blue in there.

0:06:30.015,0:06:32.360
So what about other outcomes of wealth?

0:06:32.360,0:06:34.055
Wealth is not just about wealth.

0:06:34.055,0:06:36.679
We asked, what about things like health?

0:06:36.679,0:06:40.812
What about availability[br]of prescription medication?

0:06:40.812,0:06:42.832
What about life expectancy?

0:06:42.832,0:06:45.247
What about life expectancy of infants?

0:06:45.247,0:06:47.592
How do we want this to be distributed?

0:06:47.592,0:06:50.401
What about education for young people?

0:06:50.401,0:06:52.271
And for older people?

0:06:52.271,0:06:55.254
And across all of those things,[br]what we learned was that people

0:06:55.254,0:06:58.412
don't like inequality of wealth,

0:06:58.412,0:07:01.918
but there's other things where inequality,[br]which is an outcome of wealth,

0:07:01.918,0:07:03.961
is even more aversive to them:

0:07:03.961,0:07:07.932
for example, inequality[br]in health or education.

0:07:07.932,0:07:10.393
We also learned that people[br]are particularly open

0:07:10.393,0:07:12.947
to changes in equality[br]when it comes to people

0:07:12.947,0:07:14.991
who have less agency --

0:07:14.991,0:07:17.336
basically, young kids and babies,

0:07:17.336,0:07:22.003
because we don't think of them[br]as responsible for their situation.

0:07:22.003,0:07:24.348
So what are some lessons from this?

0:07:24.348,0:07:25.508
We have two gaps:

0:07:25.508,0:07:28.088
We have a knowledge gap[br]and we have a desirability gap

0:07:28.088,0:07:30.710
And the knowledge gap[br]is something that we think about,

0:07:30.710,0:07:32.080
how do we educate people?

0:07:32.080,0:07:34.796
How do we get people to think[br]differently about inequality

0:07:34.796,0:07:38.558
and the consequences of inequality[br]in terms of health, education,

0:07:38.558,0:07:40.949
jealousy, crime rate, and so on?

0:07:40.949,0:07:42.830
Then we have the desirability gap.

0:07:42.830,0:07:46.653
How do we get people to think differently[br]about what we really want?

0:07:46.653,0:07:50.028
You see, the Rawls definition,[br]the Rawls way of looking at the world,

0:07:50.028,0:07:51.770
the blind tasting approach,

0:07:51.770,0:07:54.695
takes our selfish motivation[br]out of the picture.

0:07:54.695,0:07:57.272
How do we implement that[br]to a higher degree

0:07:57.272,0:07:59.896
on a more extensive scale?

0:07:59.896,0:08:02.752
And finally, we also have an action gap.

0:08:02.752,0:08:05.701
How do we take these things[br]and actually do something about it?

0:08:05.701,0:08:08.603
I think part of the answer[br]is to think about people

0:08:08.603,0:08:11.715
like young kids and babies[br]that don't have much agency,

0:08:11.715,0:08:15.523
because people seem to be[br]more willing to do this.

0:08:15.523,0:08:20.793
To summarize, I would say,[br]next time you go to drink beer or wine,

0:08:20.793,0:08:24.880
first of all, think about, what is it[br]in your experience that is real,

0:08:24.880,0:08:28.154
and what is it in your experience[br]that is a placebo effect

0:08:28.154,0:08:29.758
coming from expectations?

0:08:29.758,0:08:33.287
And then think about what it also means[br]for other decisions in your life,

0:08:33.287,0:08:35.362
and hopefully also for policy questions[br]

0:08:35.362,0:08:36.667
that affect all of us.

0:08:36.667,0:08:38.394
Thanks a lot.

0:08:38.394,0:08:40.731
(Applause)