The ‘Wolf of Wall Street’ within us

Mindless greed. Two words that aptly summarize the Martin Scorsese epic ‘Wolf of Wall Street’ based on the life of Jordon Belfort. Turns out, that many of us have within us, the same germs of uninhibited hunger for endless acquisition portrayed in the movie. Research from University of Chicago Booth School of Business uncover the problem of ‘mindless accumulation’ – an instinct to earn more than can possibly be consumed.

All work and no play may just be a result of “mindless accumulation.”

So say scholars behind research, published in the journal Psychological Science in June, that shows a deeply rooted instinct to earn more than can possibly be consumed, even when this imbalance makes us unhappy.

Speaking to the New York Times, the researchers point out, that given how many people struggle to make ends meet, this may seem a frivolous problem. Nonetheless, the researchers note that productivity rates have risen, which theoretically lets many people be just as comfortable as previous generations while working less. Yet they choose not to.

“Our results show that individuals work about the same amount regardless of earning rates and hence are more likely to overearn when earning rates are high than when they are low”, say the researchers.

To explore the powerful lure of material accumulation, the researchers constructed an experiment in two phases. In the first phase, subjects sat for five minutes in front of a computer wearing a headset, and had the choice of listening to pleasant music or to obnoxious-sounding white noise.

They were told they could earn pieces of Dove chocolate when they listened to the white noise a certain number of times. Some participants had to listen fewer times to get each piece of chocolate, making them ‘high earners’; some had to listen more times, making them “low earners.”

Album cover of Nevermind by Nirvana: hooked on money from birth

All were told that there would be a second phase to the experiment, also lasting five minutes, in which they could eat the chocolate they earned. But they were told they would forfeit any chocolate they couldn’t consume, and they were asked how much they expected to be able to eat.

On average, people in the high-earner group predicted that they could consume 3.75 chocolates.

But when it came time to ‘earn’ chocolates, they accumulated well beyond their estimate. On average, they listened to enough white noise to earn 10.74 chocolates. Then they actually ate less than half of that amount.

In other words, they subjected themselves to harsh noise to earn more than they could consume, or predicted they could consume.

“We introduce the concept of ‘mindless accumulation,’ ” said one of the paper’s authors, Christopher Hsee, a professor of behavioral science and marketing at the University of Chicago Booth School of Business. “It’s a waste of effort,” he added, “But once people are in action, they can’t stop.”

The impulse seemed less pronounced, even mixed, with the low earners. They earned less chocolate than they predicted they could eat. But the high earners and the low earners listened to about the same amount of obnoxious noise in the five-minute period, which Dr. Hsee said strongly suggested that both groups were driven by the same thing: not by how much they need, but by how much work they could withstand.

How applicable is this to the real world, where people earn money, not chocolate, and can’t predict how long life will last, or whether they will need resources to prepare for a calamity? Hard to say, but the study does show that even when people know clear boundaries — that they absolutely can’t take the candy with them when they go — they still earn more than they can possibly use.

Michael Norton, an associate professor at the Harvard Business School who is familiar with the field, said the study’s implications were “enormous” in part because they can enlighten people to an unconscious motivation that leads to shortsighted, even unhappy choices.

Still, he said, choosing happiness or leisure over earning is challenging, in part because accumulation of money — or candy — is easier to measure than, say, happiness. “You can count Hershey’s Kisses,” Dr. Norton said. Being an involved parent or partner is not so quantifiable. “Most of the things that truly make us happy in life are harder to count,” he said.

Whats the way out? The researchers say that prompting individuals to consider the consequences of their earnings or denying them excessive earnings can disrupt mindless accumulation and enhance happiness.

It is somewhat ironical that the research comes not from an instiute of anthropology or psychology, but instead from a business school. Business schools, have often faced criticism for inculcating greed. The article Alum: Harvard Business School Nurtures A “Culture of Greed” makes for a fascinating read in this context.

Link to the article in New York Times