Money and Human Behavior

According to an article in the paper today, with heating bills coming to some $150 million a year Queen Elizabeth II had some of her minions casting about for some additional funds to help heat her drafty old palaces.  Says the article:

HM Queen Elizabeth II, Queen of the United Kin...

Queen Elizabeth II, via Wikipedia

“. . . a request for assistance from a government fund that provides subsidized heating to low-income Britons has caused a spot of bother for Queen Elizabeth II, long one of the world’s wealthiest women.”

Her Majesty’s application in 2004 was politely turned down by the government — in part because of fear of adverse publicity — and quietly forgotten until The Independent newspaper published the correspondence Friday after obtaining it via a Freedom of Information request.

The Queen’s little problem bears tangentially on some of the controversies swirling about here in the Colonies of late, given the woes of the Great Recession and political disagreements over how to deal with the economy and taxes.

That the Queen, often cited as one of the world’s wealthiest women, would seek this kind of relief caused me to speculate on money and how different are the attitudes people have about it.  Clearly, based on life experience and reading, I think most Americans simply try to achieve as high a salary as they can and then spend most of it, all without much planning for the long term.  But that suggests an interesting question.  When people do succeed in acquiring more money than they need just to be comfortable, how does that affect their behavior?

Abraham Maslow, a noted psychologist often quoted on human motivation, found that people have different levels of needs, starting with basics and ending with the highest aesthetic aspirations.  His “hierarchy of needs” is:

  1. Psysiological (food, water, sex, sleep, etc.)
  2. Safety (security, employment, morality, property)
  3. Love/belonging (friendship, family, sexual intimacy)
  4. Esteem (self-esteem, confidence, achievement, respect)
  5. Self-actualization (morality, creativity, spontaneity, lack of prejudice, acceptance of facts)

Now Dr. Abe was clearly onto something because his theory continues to be quoted in books and classes all these many years later.  A central tenet of his theory is that each level motivates behavior only until its needs are filled.  At that point, those

Warren Buffett speaking to a group of students...

Warren Buffett, via Wikipedia

needs no longer motivate and the needs of the next level become the drivers of behavior, and so on up the pyramid until everyone becomes like Warren Buffet, the Sage of Omaha.

I made that last part up.  I only wish Queen Liz and the rest would become like Warren, who is one of my favorite people, but that won’t happen.  Alas, most people seem to get stuck somewhere around level 4 or below.  That’s a shame.  The Bible, which may be on to something here, says that the LOVE of money (but not money itself) is the root of all evil.  For the wealthy level 4’s, life becomes all about seeking attention through celebrity, houses, jewelry and expensive toys.  This behavior keeps the National Enquirer and People Magazine in good supply of material.

I found it interesting that Michael Douglas, a wealthy and successful man at age 56,


Cover of

Cover of Wall Street (20th Anniversary Edition)

still feels the need to seek celebrity-attention on talk shows when after years of hard-living he developed stage 4 throat cancer.  As I mentioned in a previous post, one’s career often defines who we are, and I suspect that Mr. Douglas is hooked on celebrity attention as much as he was (is?) on tobacco and booze.

This brings me to the Bush tax cuts, due to expire at the end of 2010.  There are howls of outrage from the GOP that the Obama administration wants to renew the cuts for the middle class, the 98% of tax filers whose joint incomes are under $250,000, while letting them expire for the 2% above that amount.  The reasoning, if you can call it that, is that failure to renew the cuts for the wealthy would be, in a word, UNFAIR.  No, really.

Here’s what Robert Reich wrote in a post for the Christian Science Monitor last month:

“A final reason for allowing the Bush tax cuts to expire for people at the top is the most basic of all. Although Wall Street’s excesses were the proximate cause of the Great Recession, its fundamental cause lay in the nation’s widening inequality. For many years, most of the gains of economic growth in America have been going to the top – leaving the nation’s vast middle class with a shrinking portion of total income. (In the 1970s, the top 1 percent received 8 to 9 percent of total income, but thereafter income concentrated so rapidly that by 2007 the top received 23.5 percent of the total.) The only way most Americans could continue to buy most of what they produced was by borrowing. But now that the debt bubble has burst – as it inevitably would – the underlying problem has reemerged.”

Thurston's Toy at anchor.

The federal Estate Tax is also set to expire, and, I’ll be darned, the GOP wants to let it.  Why?  I asked a conservative friend of mine, Thurston Howell IV, and he said,  “Because we worked for, uh,  earned, uh,  inherited, uh, OWNED that money (and went to all the trouble to invest it and collect the interest on it, he mumbled) and nobody, nobody, has a right to take it away from us!  It wouldn’t be FAIR!”  So there!

Here’s what Warren Buffett, one of the world’s richest men and a Maslow level 5 if ever I saw one, thinks about the issue (quote courtesy of Duane Graham):

“I would hate to see the estate tax gutted. It’s in keeping with the idea of equality of opportunity in this country, not giving incredible head starts to certain people who were very selective about the womb from which they emerged.

“I’m not an enthusiast for dynastic wealth when there are 6 billion people who have much poorer lives. I can’t think of anything that’s more counter to a democracy that dynastic wealth. The idea that you win the lottery the moment you’re born: It just strikes me as outrageous.”

Gee, I wonder what the Queen would say to that?

About Jim Wheeler

U. S. Naval Academy, BS, Engineering, 1959; Naval line officer and submariner, 1959 -1981, Commander, USN; The George Washington U., MSA, Management Eng.; Aerospace Engineer, 1981-1999; Resident Gadfly, 1999 - present. Political affiliation: Democratic.
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3 Responses to Money and Human Behavior

  1. ansonburlingame says:


    I don’t understand a lot about estate or inheritance taxes, particularly today. But what about, for example the family farm. Granma and Granpa, maybe, bought the farm, worked hard to survive and left it to Dad. Dad worked hard as well and MAYBE paid off the mortgage on the farm. Both grandparents and parents worked the land, lived a “good” but for sure not rich life and leave the farm to you.

    The farm appaises for some $1000 per acre, maybe a lot more. There is no mortgage on the land. So you owe taxes on some percentage of the value of that land. Well a 200 acre farm “costs” you a lot of money, somewhere in the neighborhood of $100,000. So what do you do? A lot of people sell the farm to pay the tax.

    How do you fix that problem?

    Sure everyone wants the “fat cats” to pay out the nose. But it also applies to “alley cats” as well or so it seems to me. This issue along with the Bush tax cuts, progressive income taxes, etc ALL are designed to soak the rich and leave at least the poor, if not the middle class alone. It seems to be framed in the same “class warfare” sense to make those with a lot to bear a far greater burden than those with not much.

    Well that works UNTIL the federal government gets so BIG that no one class, actually the combined sacrifice of all classes cannot sustain such government. I call for STOP IT in the growth of government, live within current means including current tax structures. Let it all settle out, forget class warfare and decide in the future just who should pay more and how much more all for the sake of government power at the federal level.

    If Republicans win and do as Pledged, we instead will shrink government and stop this crazy demand for more and more people to pay more and more for a federal government.



    • Jim Wheeler says:


      Estate and Inheritance taxes can be both federal and state, of course. MO doesn’t have them. OK has a rather draconian estate tax. From what I read the federal estate tax receipts have long been quite small because of the high limits. There is no consistency among states, but I think the trend has been to reduce or eliminate them. But, as I say, it’s not a good idea to die in Oklahoma.

      As far as Grandma and Grandpa go, I am certainly not against setting a lower limit of $2 or $3 million to protect just the situation you envision, and that has in fact been the pattern of the tax. The problem comes with the really-big farms and businesses, and BTW, most farms nowadays are huge, automated operations with many millions of dollars of high-tech, GPS-guided equipment. Automated Big Ag is why we eat so cheap compared to yesterday and still export gobs. And consider this: If the kids and grandkids are growing up in a family with a farm or business worth many millions, aren’t they going to be blessed with better schools and stuff than most kids? How much head start is enough? We only go through this life once. IMHO, everyone deserves the satisfaction of at least some of his or her own accomplishments. To argue otherwise, seems to me, is to say, “I got mine the old fashioned way. I inherited it!” Seems more British than American, but maybe that’s just because of my personal background.



  2. ansonburlingame says:


    Which is why I have not gotten into such taxes in a big way. I of course will counter that big corporate farms are at least partically a result of buying out the small farms for reasons given above. How much, I have no idea.

    All I am trying to do for the moment is to make or attempt to make the case that federal power has gotten so big that NO single class, actually ALL classes of society within America, simply can no longer sustain such power, financially, and I believe morally.

    Decentralize the base of power, live within our means wherever such power “moves”, see where that “gets us” then reevaluate where to go from there. To me the Pledge says that pretty clearly.

    Awaiting your critique of my blog on the Pledge. I read that you “threw up on it” before getting passed the preamble. Should be an interesting critique from you. I already can imagine what Duane might say.



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