What rising inequality and materialism does to us

By Carmen Lawrence
Winthrop Professor, School of Psychology, University of Western Australia
Posted on 30 June 2011
Filed under Cognition, Culture

The emphasis on growth as the pre-eminent social goal has seen rises in inequality within societies. In developed economies, the degree of income inequality has been shown to be associated with a wide variety of health and social problems, including reduced trust and civic engagement, which may themselves reduce overall well-being.  One of the consequences of the tendency for people to assess their position relative to others – rather than in absolute terms - is that high levels of inequality in wealth and income are likely to produce greater levels of unhappiness. More people see themselves as losing out, even when they are well off. While there is continuing debate about the exact nature of the relationship, a recent study (Verme, 2011) which investigated a very large global sample found that income inequality has “a negative and significant effect on life satisfaction” and that the result “persists across different income groups and across different types of countries” (p 111). Wilkinson and Pickett (2010) argue that such ill effects of income inequality are not the result of income differences per se but rather are a consequence of social stratification and the associated “social evaluative stress” people experience.

The initial epidemiological research, both within and between nations, found a strong relationship between income inequality and life expectancy: the greater the gap in income between the rich and the poor in a given society, the lower the life expectancy and the greater the incidence of illness for everyone. For example, in his study of national income inequality among eleven industrialised countries, Wilkinson (1992) reported a correlation of -0.81 between indices of inequality and life expectancy after controlling for gross national product per capita.

Changes in inequality over time are also important. Contrast the experiences of Britain and Japan; in 1970 they had similar income distribution and life expectancy but since then have diverged significantly. Japan now has the highest life expectancy in the world and the most egalitarian distribution of any country on record. Conversely, in Britain income distribution widened following the Thatcher experiment in the mid 80s and mortality among men and women between 15-44 years actually increased. In reviewing the international literature on health and income inequalities, Wilkinson argued that "life expectancy in different countries is dramatically improved when income differences are smaller and societies are more socially cohesive" and that "social, rather than material, factors are now the limiting component in the quality of life in developed societies".

After more than a decade of research on the effects of inequality, Wilkinson (1996) concluded – and he is far from alone in this - that “a wide range of problems associated with relative deprivation…. are all strongly related to one factor—societal measures of income distribution” (p 1). We know now that data from a range of countries show that “the societal scale of income inequality is related to morbidity and mortality, obesity, teenage birth rates, mental illness, homicide, low trust, low social capital, hostility, and racism.” Wilkinson and Pickett’s (2005, 2010) latest work shows that poor educational performance among school children, the proportion of the population imprisoned, deaths from drug overdoses and low social mobility can be safely added to this list. The international research is consistent in showing that “greater income inequality is associated with a higher prevalence of ill health and social problems in a society as a whole” and everyone is affected. One of these effects has been the collapse in intergenerational mobility; children born into disadvantage in the most unequal societies now have reduced prospects of improving their circumstances than their parents and grandparents did.

It is worth noting that, to date, the relationship between these outcomes and income inequality (as opposed to low socio-economic status) within Australia has been little studied. However in international comparisons Australia is ranked among the most unequal nations, with a larger catalogue of social ills compared to more equal societies– higher levels of illegal drug use and mental illness, lower levels of trust, poorer child wellbeing, more obesity and childhood obesity, higher levels of imprisonment, lower social mobility and lower scores on a composite index of health and social problems. Australia also appears as one of the few societies overall where subjective well being has actually declined over recent decades (Inglehart et al., 2008).

Researchers generally agree that inequality amongst Australians is increasing. In fact since 1979, income inequality in Australia has been increasing at faster rate than in comparable developed countries such as France, Germany, Italy, the U.K. and the U.S. Although we are collectively wealthier than we have ever been, we are also a less equal society than we have ever been.

The conclusion that inequality is socially destructive is not novel; close observers of the human condition have often pointed to the apparent association between inequality and impoverished social relations. It is important to understand that the established relationships between income inequality and health and social problems are not trivial: there are ten-fold differences in homicide rates; six-fold differences in teenage birth rates, sixfold differences in the prevalence of obesity, fourfold differences in how much people feel they can trust each other, five- or ten-fold differences in imprisonment rates and three years difference in the average length of life. Many of these social problems, which are related to income inequality, are about human perceptions and behaviour; income inequality has psychosocial effects, probably as a result of chronic stress and the unpleasant experience of relatively low social status, rather than the absolute level of income (Wilkinson & Pickett, 2010).


As we have seen, beyond a certain point, the premise that more consumption and greater wealth improve well being does not stand scrutiny. On the contrary, there is strong evidence that at individual level, the more material goals matter to people, the more unhappy they are likely to be. Research here and in other wealthy countries shows that even when people obtain more money and material goods, they do not become more satisfied with their lives or more psychologically healthy.

At some level, people seem to understand this. Surveys in already wealthy countries indicate that many people believe we need a better balance between the pursuit of material goals and the quality of people’s lives. The majority endorse the view that a growing economy – and the acquisition of more “stuff”- is not all that matters in improving wellbeing. Many people appear to feel uneasy about the fact that children today are growing up in winner takes all economy where they are encouraged to see the main purpose in life as getting whatever they can for themselves. In popular culture, selfishness and materialism are no longer seen as moral problems, but as cardinal goals in life. “More for me”, as one TV advertisement boasts.

The influence of consumerism is pervasive and buttressed by an enormous industry whose sole purpose is to drive consumption. The result is that many people have come to evaluate their lives and accomplishments not by looking to their relationships or community, but to what they possess and what they can buy. They come to act as if they believe that the consumption of things will confer real satisfaction and guarantee a full life. Such ideas are often associated with a world view in which the worth and success of others is also judged not by their wisdom or kindness or community contribution, but in terms of whether they possess the right clothes, the right car, or more generally, the right "stuff”. At the same time, judgments about what is enough are not absolute, but relative to others; people judge their own worth by measuring their wealth and possessions against that of others – and since there is always someone with more, this is a recipe for dissatisfaction.

In fact, research shows that merely aspiring to have greater wealth or more material possessions is likely to be associated with increased personal unhappiness. Kasser (2002), amongst others, has shown that people who “strongly value the pursuit of wealth and possessions report lower psychological well-being than those who are less concerned with such aims” (p 5). Using a variety of instruments, his research has shown that those with strong materialistic values and desires report more symptoms of anxiety, report less vitality and feelings of self actualization, are at greater risk of depression, are more narcissistic and experience more bodily discomfort (aches and pains) than those who are less materialistic. They watch more TV, take more alcohol and drugs and have more impoverished personal relationships. 

Australian investigations have generally confirmed these findings. In one study, people who endorsed materialistic values were less satisfied with their lives than those who reported lower levels of materialism (Ryan & Dziurawiec, 2000). Another set of studies by Saunders and his colleagues found that people who score high on materialism were less satisfied with their lives, more likely to suffer from depression and anger, more conformist and less likely to be interested in or protective of the environment. The researchers also found that the same people also to judge their success or failure in terms of their material possessions.

There are many explanations of why materialism can be so toxic: the desire to have more and more goods drives us into more frantic pace of life; people have to work harder and longer to purchase, maintain, replace, insure and constantly manage goods.  This expends the energy necessary for living a fully satisfying life. Economies focused on consumption foster conditions that heighten psychological insecurities: they fuel themselves. Parents work more and more hours outside the home, to acquire the buying power to obtain more goods that they have been taught that they and their children “need”. Attention to children, intimate time with partners and friends, and other satisfactions that cannot be bought are pushed to the periphery.

Materialism is also associated with more anti-social and self-centred behaviour. One of the effects of a materialistic disposition is a greater tendency to treat people as objects to be manipulated and used. Materialistic values conflict with making the world a better place and the desire to contribute to equality, justice and other aspects of civil society. Attitude surveys show that people highly focused on materialistic objectives show little concern for the wider world – they care less about protecting the environment and less about their fellow citizens (Kasser, 2002). 


Accumulating evidence from a variety of disciplines and perspectives points clearly to the conclusion that increasing material wealth does not necessarily improve individual or collective wellbeing. In developed economies, characteristics such as greater income equality, fairly functioning political institutions, and the quality of the environment are more important. High and accelerating levels of economic growth are generating serious problems such as resource insecurity, environmental degradation and social difficulties which contribute to individual discomfort and unhappiness: there is a downside to growth.

One of the reasons policy makers continue to be fixated on increasing GDP as a pre-eminent objective in the face of these effects is that they believe there is no alternative. This represents a failure of the imagination, a refusal to take seriously and develop other possible models which have (somewhat tentatively) been proposed under the heading of steady state or no-growth economics. Even Robert Solow, who won the Nobel prize for economics for his work on growth theory, apparently now describes himself as “agnostic” on whether growth can continue and told Stoll of Harper’s Magazine (March, 2008) that, “There is no reason at all why capitalism could not survive without slow or even no growth. I think it’s perfectly possible that economic growth cannot go on at its current rate forever.. . . . There is nothing intrinsic in the system that says it cannot exist happily in a stationary state”.  John Stuart Mill made a similar argument in 1848: “the increase of wealth is not boundless..and that economists should know that “at the end of what they term the progressive state lies the stationary state, that all progress in wealth is but a postponement of this.”

It is surely time for these ideas to be taken seriously.



Kasser, T. (2002). The high price of materialism. Cambridge, MA: MIT Press.

Kasser, T., & Brown, K. W. (2003). On time, happiness, and ecological footprints. In J. deGraaf (Ed.), Take back your time: Fighting overwork and time poverty in America (pp. 107-112). San Francisco: Berrett-Koehler Publishers.

Saunders, S (2000). A snapshot of five materialism studies in Australia. Journal of Pacific Rim Psychology 1 (1), 14–19.

Stevens, P. (2010). Embedment in the environment: A new paradigm for well-being? The Journal of the Royal Society for the Promotion of Health, 130: 265-269.

Rehdanz, K. & Maddison, D. (2005). Climate and happiness, Ecological Economics, 52(1), 111-125.

Stiglitz, J. (2009). A cool calculus of global warming. Project Syndicate Blog.

Verme, P. (2011). Life satisfaction and income inequality. Review of Income and Wealth, 57: 111–127.

Wilkinson, R.G. (1992). Income distribution and life expectancy. British Medical Journal, 304: 165-168.

Wilkinson, R. (1996). Unhealthy Societies: The Afflictions of Inequality. London: Routledge, p 1.

Wilkinson, R. & Pickett, K. (2005).The problems of relative deprivation: Why some societies do better than others. Social Science & Medicine, 65, 1965-1978.

Wilkinson, R. & Pickett, K. (2010). The Spirit Level: Why Equality Is Better for Everyone. London: Penguin books,

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Comments 1 to 11:

  1. Dear Carmen,

    Thanks for another great post on of where 21st century measures of societal health and progress should lie; particuarly in the case you describe where a whole array of undesirable societal effects are now being shown to be correlated or even derived from increasing inequality in many societies. The GINI co-effecient appears a simple measure of (in)equality on face value, but what lies beneath that simple metric has profound implications for the health of societies.

    If you haven't already read it; you might be interested in an article this month in the Journal of Personality and Social Psychology - Ref: Fischer,R and Boer,D. (2011), "What Is More Important for National Well-Being: Money or Autonomy? A Meta-Analysis of Well-Being, Burnout, and Anxiety Across 63 Societies" Journal of Personality and Social Psychology, Vol. 101, No. 1, 164Ė184.

    The authors evaluate the importance of providing citizens with more money or alternatively with more autonomy for their subjective well-being? It's a meta-analysis, the authors examined national levels of well-being on the basis
    of lack of psychological health, anxiety, and stress measures. Data from 63 countries, with a
    total sample of 420,599 individuals was analysed. The authors found individualism (as indicative of personal autonomy and freedom) was a consistently better predictor than wealth, of subjective well being.

    Of course similar findings have emerged from other studies, but a study on this scale is a first. It seems to provide some supporting evidence for a range of ideas and social reforms that have been mooted in the past. One top of mind possibility being workplace reform to allow workers more flexibility in achieving their work goals (flexitime, tele commuting, no fixed office hours and so on); another no brainer is greater attention to the needs of working women with children; and so on. These are issues that Australia is widely known to lag well behind the US and Europe.

  2. Carmen Lawrence at 17:07 PM on 12 July, 2011
    Thanks, John, for the reference, which I hadn't seen. These authors, as you may be aware, have also used the same data set to tease out the effects of "demanding climates" (pointing to the likely effects of climate change) on the indices used in the paper you quote - depression, general health, anxiety and "burnout". The relationship, as you might expect, is complex with people in poorer countries with fewer resources appearing to react more negatively to difficult climates. (http://psp.sagepub.com/content/early/2011/05/06/0146167211407075). My only problem with the Fischer & Boer study, apart from the mind-blowing complexity of the data manipulation and analysis, is that what they call "individualism" looks like a mix of characteristics which, I suspect, may have very different meanings in different cultures. Nonetheless, as you say, the data reinforce the research which points to the deblitating effects of powerlessness.
  3. Good points Carmen and thanks for the reference to their other paper.
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