Montessori Muddle – Page 133 – Middle and High School … from a Montessori Point of View

Exercise on Wealth Distribution

Using the actual U.S. wealth distribution data from Norton and Arieli (2011; pdf), I created a little addendum to our exercise on the distribution of wealth.

I started with the definition of wealth. Students tend to think you’re referring to annual income, so I gave the example of someone who does not have a job but owns a house; they have no income but some wealth in the value of the house. Alternately, someone who has $2 million in the bank, but owes $4 million, actually has negative wealth.

Then I drew a little stick figure diagram to represent the population of the United States. With ten figures, paired up, that gives five parts, aka quintiles.

wealth-dist-example-01 — Breaking the population of the U.S. into five parts (quintiles) based on wealth. The least wealthy are to the right and the most wealthy are to the left.

Students were then presented with an empty bar graph and asked, “How much of the U.S.’s wealth is owned by the wealthiest 20% of the population?” Instead of asking in percentages (as are shown in the graph), I asked them to assume that the total wealth in the U.S. is $100 trillion.

wealth-dist-example-02 — Population with empty bar graph.

The first suggestion was $35 trillion, which is shown below. Others offered different amounts, ranging up to $50 trillion. Someone even suggested $15 trillion, which is not possible, since that would mean that the wealthiest 20% have less than 20% of the total wealth of the country.

wealth-dist-example-03 — If the wealthiest 20% owned 35% of the wealth of the U.S. the graph would look like this.

Once they got the idea, I showed them what the graph would look like in an idealized socialist country, where everyone had the same wealth.

wealth-dist-even — An even (socialist) distribution of wealth.

Finally, I asked my students to fill in what they believed to be the actual case for the U.S. for all five quintiles. The results had to add up to $100 trillion. They gave me their numbers individually before we broke up our meeting, and I entered it in the U.S. distribution of wealth spreadsheet to produce a graph.

After lunch, I showed them the results.

wealth-dist-all — Students' beliefs about the distribution of wealth in the U.S. (S1 through S10 and the average student response), compared to an equal distribution and the actual distribution (bottom).

For dramatic effect, I hid the last two bars at first. We talked over their numbers, then I showed them the equal distribution case (which they’d seen before), and finally the actual distribution.

wealth-dist-actual — Actual U.S. distribution of wealth. Data from Holder and Arieli (2011)

The response was salutary; a moment of surprised silence and then whispers. What then followed was a nice, short discussion. I pointed out the pie charts showing the U.S. versus an equal distribution, versus Sweden and asked what they would do, if they were an autocratic monarch, or if they were the president to make the U.S.’s distribution more equal.

How wealth is shared in the U.S. compared to and equal distribution (middle), compared to Sweden. Image adapted from Norton and Aireli (2011).

We talked about the government just taking private property, like the communists did. Then we talked about progressive taxation. We ended by talking about the estate tax, and meritocracy, which we’d touched on in the morning.

I thought the exercise worked very well. Not only did we get into an interesting economic issue, but got some practice with math and interpreting graphs too.

Human Evolution not Drawn as a Tree?

Razib Kahn has a fascinating interview with Milford Wolpoff, one of the main scientists behind the research that argues that humans are not all part of a single family tree, descended from a single ancestor who moved out of Africa about 200,000 years ago.

This section focuses on the theory, and has a nice explanation of what mitochondrial DNA is (and why it’s important):

It gives an excellent perspective on how science works, and how scientists work (scientists are people too with all the problems that entails).

The entire thing is a bit dense, but it’s one of the better discussions I’ve seen describing the process of science in action, with little hints at all the challenges that arise from personality conflicts and competing theories.

Advice for aspiring writers

Oliver Miller responds (warning: harsh language) to advice given by writers in the Guardian on how to be a writer.

The key thing he mentions, to which all his other advice builds, is the need for good, constructive peer review.

So you need to surround yourself with fellow writers who are supportive but also honest. Some people will tell you that your writing is always good. These people are lying. And some people will tell you that your writing is always bad. These people are also lying. …But a few rare people will point out the stuff that they like, call you out on some of the dumb [stuff] that you’re writing, and gently but forcefully suggest ways to make your dumb [stuff] better [my italics]. Treasure these people. Learn to recognize them. These people are your only hope.

— Miller (2011): How to be a Writer

Distribution of Wealth

One of our economics assignments this cycle asks students to divvy up $200,000 among a group of ten people. One is a divorced mom, another a playboy, a third a bank manager, you get the gist. The purpose is to compare what students think it should be, to what a socialist might believe, to students’ estimation of reality. I’m really curious to see what they come up with.

Michael Norton and Dan Ariely have some actual data on the wealth distribution in the United States that might really challenge some assumptions (Norton and Ariely, 2011 pdf). They asked survey respondents what percentage of wealth they thought was owned by the poorest 20% of U.S. citizens, the next 20% and so on. They also asked what kind of wealth distribution people though would be ideal. Finally, they compared what people thought to what was actually there.

People, apparently, really underestimate the income inequality in the U.S..

A second part of the same study gave people pie charts of wealth distribution in different societies and asked them to pick out which one they would prefer to live in if they were dropped at random into one of these societies. They compared the more socialist-like Sweden, to the U.S., and to a perfectly even distribution. People greatly preferred societies with a more equal sharing of wealth.

I think I’m going to have to modify this assignment to use these graphs. I’ll also have to use their definition of wealth:

Wealth, also known as net worth, is defined as the total value of everything someone owns minus any debt that he or she owes. A person’s net worth includes his or her bank account savings plus the value of other things such as property, stocks, bonds, art, collections, etc., minus the value of things like loans and mortgages.

–Norton and Arieli (2011): Building a Better America – One Wealth Quintile at a Time in Perspectives on Psychological Science

Too many Young Adults: Reasons for Revolution

A successful democratic revolution may well need a relatively wealthy and educated population, however, one of the main things that seem to drive revolutions themselves is just how many young adults there are in a country.

… countries in which 60 percent or more of the population is under the age of 30 are more likely to experience outbreaks of civil conflict than those where age structures are more balanced.
— Madsen (2011): The Demographics of Revolt

When there are lots of young people getting to the age when they are just trying to find jobs and start families, but the country’s economy can’t grow fast enough to provide all the jobs they need, then you have a lot of dissatisfied, disaffected people with time on their hands; it’s a tinderbox ready for any spark.

I recently attended a talk by Jennifer Scuibba where she laid out the case. Scuibba’s blog, also has a
a very good set of links that look at the age demographics of the current revolutions in the Arab world.

One of the links goes to a report by Richard Cincotta and others (Cincotta et al., 2003) that used this type of demographic analysis to figure out which countries were most likely to end up in conflict.

demographic-risk — Countries at risk of civil war (Cincotta et al., 2003).

They talk about the demographic transition, “a population’s shift from high to low rates of birth and death,” as being a key factor in reducing the likelihood of conflicts. Therefore, they suggest:

… a range of policies promoting small, healthy and better educated families and long lives among populations in developing countries seems likely to encourage greater political stability
— Cincotta et al., 2003: The Security Demographic – Population and Civil Conflict After the Cold War

If civil conflict leads to a successful democratic transition, then political stability is probably not a net benefit.

However, once there is a democratic revolution, the same large cohort of young people still exists, which could make a country like Egypt unstable for quite a while, until it goes through the demographic transition. After all:

…countries do not become mature democracies overnight. They usually go through a rocky transition, where mass politics mixes with authoritarian elete politics in a volatile way. Statistical evidence covering the past two centuries shows that in this transitional phase of democratization, countries become more aggressive and war-prone, not less …
— Mansfield and Snyder (1995): Democratization and War