LAUSR

In the 19th century, Thorstein Veblen (1899) developed a theory that explained why the working classes did not rise up to demand redistribution. They were seduced by the lure of the conspicuous consumption of the wealthy. As the Gilded Age allowed affluent Americans to signal their rising wealth through luxury goods and visible distinctive lifestyles, ordinary Americans also came to view these goods and lifestyles as attractive and legitimate, even as they remained firmly out of reach. Veblen’s point is that money shapes status, and control over money allows outsized influence over views of who deserves to have lots of it. Recent research has confirmed that being on top of the income hierarchy can matter as much or more than having high absolute income. One’s income relative to others’ lights up the reward area in the brain, and affects satisfaction with one’s income and one’s job, and more broadly one’s happiness, health, and longevity, even accounting for absolute income (Card, Mas, Moretti, & Saez, 2012). Relative income matters more than absolute income. That’s because status can be more important to people than having a comfortable existence. A century later, status also figures implicitly in Cramer’s study of Wisconsin, and sheds light on the sources of many Americans’ political discontent. An income-based model would predict that income inequality would elicit a democratic revolt, assuming the non-affluent median voter drives election outcomes in the direction of their economic interests and signals officials that it is time to redistribute income from the top down. However, recent research indicates that as income inequality has risen in the United States, low-income citizens have not begun demanding more redistribution from government. In fact, the opposite: like higher-income voters, they have become less favorable toward redistribution as income inequality grew over time (Kelly & Enns, 2010; but see Johnston & Newman, 2015). From the perspective of a concrete economic resource model, this makes no sense. Lower-income voters would stand to gain from redistribution, the more so that they are left with less (Kenworthy & Pontusson, 2005), yet as they lose more and more, they demand