Protesters march outside of the U.S Treasury building in protest of the proposed Wall Street bailouts, Friday Sept. 26, 2008, in Washington.
Credit: AP Photo / Jacquelyn Martin.
The outrage expressed by many so-called Main Street folks over the proposed Wall Street bailout is based on more than a sense of injustice.
It's about revenge, a basic animal instinct shared by humans, chimpanzees and even blue-footed boobies.
And Washington politicians would be wise to listen up and stick some get-back-at-'em clauses into the bailout bill if they hope to get the support of the average American, says one behavioral economist who studies these things.
In phone calls made by constituents to politicians, as well as e-mails to news organizations and other media, the public has expressed a preference for a package that helps consumers and homeowners without assisting fat cats on Wall Street. In fact, a Pew Research Center survey conducted Sept. 27 through Sept. 29 found that nearly 70 percent of Americans say they feel angry about the government's plan, and half admit they are scared.
President Bush and other leaders who support the bailout warn, however, that if financial institutions are not propped up quickly and significantly with public money, the average American will pay the price.
Bring it on, many people seem to be saying.
Dan Ariely would agree.
"People are willing to lose money to get those people [on Wall Street] to suffer" because the corporate financial leaders have violated a social contract, says Ariely, a behavioral economist at Duke University. "We need to include revenge in the bill."
The bill should also include a code of punishment for exacting revenge for future financial misdeeds, Ariely said last night on "Marketplace," a radio program produced and distributed by American Public Media.
However, psychologist David Schroeder of the University of Arkansas, Fayetteville, doesn't think revenge is technically the right word for what the public seeks, because it implies an urge to make others suffer at whatever cost. The public wants retribution, he says, for what is seen as a violation of the rules of the game, one they put their trust in.
"Retribution involves a punitive component," Schroeder said, "and we're hoping that's going to deter these people from doing it again and we'll get them to abide by the rules in the future."
Ariely's analysis is rooted in studies he and others have done involving trust games.
They work something like this: Two individuals are each given $10. The first participant can give his partner the money, and when doing so that $10 quadruples into $40, meaning the partner now has 50 bucks. Why would you just give away money? It has to do with trust, because then the partner has the choice of either splitting the money with the giver or taking it all for himself. Many players do give away their money and end up getting the split amount back, Ariely said.
But not everyone is so trustworthy and reciprocating. So the game has a revenge twist. The giver can choose to use his own money to get back at the other player for not sharing the $50. For every $1 out of the giver's pocket, the greedy player takes a hit of $2.
"The first thing that is surprising is that people actually take revenge [even though] revenge is costly," Ariely said. "You just gave away 10 dollars, and now you're willing to invest even more to make me miserable."
It turns out revenge can be pleasurable. Ariely referred to a group of Swiss researchers who have found that when players take revenge, the same part of the brain normally triggered by reward lights up.
It's no surprise that humans love revenge. Other research has shown that people feel satisfaction when someone they dislike suffers, and interestingly, men in particular are found to enjoy physical vengeance.
Even chimps are vengeful, a study last year found. The primates become "exploding black balls of rage" when food is stolen, said a scientist involved in the study. Other primates are known to seek revenge against relatives of an attacker. Studies have shown that revenge is in fact widespread among animals, from birds of the Galapagos, called blue-footed boobies, to elephant seals.
Revenge on Wall Street
The same emotional process, Ariely said, is happening around the nation's current financial crisis.
"People feel that Wall Street has betrayed our social trust," Ariely told LiveScience. "In some sense they've walked off with our 50 dollars. Actually it's more than 50 dollars. And now the question is — how do we feel about it? And the truth is we feel really angry. Because of that, we're willing to take revenge."
He added, "It means that all of us are willing to lose money in order for those 'bastards on Wall Street' — I'm just using a general expression — to suffer even more."
And so in order for the public to support a bailout for Wall Street, and the thinking goes, for the bill to pass through Congress, revenge must be incorporated, Ariely said.
"In some sense, it's in [the public's] best interest to have the bailout, but they really want somebody to pay for it," Ariely said. "So we are all going to lose for these guys to lose more."
Two types of revenge could give the bill a swifter passage.
Retroactive revenge would make the CEOs and other higher-ups at banks suffer. For instance the bill could include something like, "if we bail out the banks, we are going to take all the stock options of the people in the bank," Ariely said.
Future revenge would mean "creating more general legislation that will ensure that in the future if people misbehave we will punish them," he added.
Schroeder thinks the bailout plan just needs to be framed in a different way. That's because the public seeks a sense of fairness. Right now, he said, the everyday person views the recipients as people who are already making lots and lots of money, so it's not fair they should be "bailed out."
"I think the retribution side probably got into play because they [the government] talked about it as a bailout — 'We're going to help the people who were cheaters,'" Schroeder said. "If they had talked about this instead as sort of a loan package," the public may have reacted more positively.
In addition to the "feel good" factor, revenge can serve as a means of maintaining social order, particularly in times or under conditions when it seems like policing and government regulations are non-existent.
Ariely gives the example of someone taking your donkey, way back when. The rational solution would be to figure out how long it would take to get back the donkey and whether it's worth it. If it took a month to chase the thief down but a week to work enough to buy another donkey, the revenge would be too costly.
"What if I will chase you to the ends of the world to get my donkey back? And I not only will take my donkey, I will take your donkey and your sister's donkey and so on," Ariely said. If word gets out that you'd carry out such revenge, others would steer clear of your donkeys in the future.
"In an odd way, revenge is very useful in getting people to behave well," Ariely said.
So perhaps it's not surprising that humans, one of the most social of animals, would show such a penchant for enacting revenge, he said.