Vicious Cycles and Virtuous Cycles: Why the Poor Get Poorer (and the Rich Get Richer)
Sometimes, it feels like situations compound upon themselves.
Those who experience good fortune continue to have more of it. Others just can’t stay away from bad circumstances. It’s as if we’re stuck in an endless cycle, where our actions and their consequences further perpetuate the situation that we’re in.
One of the most alarming examples of this concerns social mobility, or the lack of it.
The Legacy of Surnames
What’s in a name?
It turns out, a lot. Conventional wisdom states that success is tied largely to personal attributes. Someone who is hardworking and innovative can go from struggling in a poor neighborhood to the upper echelons of wealth.
However, a closer look into surnames reveals that changes can take a very, very long time. In Gregory Clark’s book The Son Also Rises: Surnames and the History of Social Mobility, he delves into the lasting effect that surnames have on wealth and education.
Although previous studies have indicated that families regress towards the mean within two to three generations, Clark argues for the need to follow lineage over a longer period of time to account for outliers. By tracing family names over the course of centuries, he finds that society isn’t as fluid as we think.
In his research, Clark tracks family names from the medieval period to modern day in a span of countries: Britain, United States, Sweden, India, China, Korea, and Japan. A variety of texts and records are analyzed, such as the Domesday Book, the Swedish Bar Association’s register, and even a list of taxpayers in The New York Times in the 1920s.
Based on the information collected, he argues that it takes about 10 to 15 generations, or over 300 years, for surnames to lose their legacy. Over 50 percent of one’s income and education can be predicted at birth, no matter the time and place. Despite all the changes and initiatives created to increase opportunities for everyone, the rate of social mobility hasn’t changed much since the medieval age.
The Vicious Cycle: Why the Poor Get Poorer
A vicious cycle (also known as a vicious circle) is when a chain of negative events reinforce themselves. The situation spirals in a downward loop, becoming increasingly worse with time.
Clark explains the case of social mobility largely on the basis of genetics. Most of our advantages or disadvantages are attributable to our parents. Certain traits are passed from parent to child, which affect the child’s future education, earnings, and status.
Besides the genetic component, there are also cultural, economic, and social factors involved. Factors that, if missing, can lead to a cycle of poverty. Once the cycle begins, it becomes very difficult to break unless some sort of intervention occurs.
One of the biggest perpetuators of the poverty cycle is a lack of educational support. Starting from pre-school, students in low-income neighborhoods are not given the same opportunities and resources to learn valuable skills compared to their wealthier counterparts. When they near the end of high school, students are inadequately prepared for college, if they can even make it there.
Since they don’t get the same level of education as other students, they don’t get the same job opportunities, resulting in lower earnings overall. Consequently, the schools they attended lack the necessary financing from alumni to build facilities and attract quality educators. Thus, the cycle continues.
The Virtuous Cycle: Why the Rich Get Richer
On the flip side, a virtuous cycle (also known as virtuous circle) is used to describe a chain of positive events that reinforces itself. A positive result happens from an event, leading to another positive result, strengthening the circumstances as a whole.
An interesting phenomenon that occurs amongst humans and non-human animals is something known as the assortative mating theory. According to this theory, individuals tend to pair up with those who are similar to themselves. Have you ever noticed, for instance, that people have similar appearances to their partners?
In one study, researchers found evidence of genomic correlations amongst marriages in the United States. When they standardized height according to sex, the results showed that married couples had a height correlation of 0.27. In contrast, people randomly paired together had zero correlation.
Overall, married couples showed greater similarities in physical appearances compared to random couples. Tall people tend to match up with other tall people, and people prefer those with similar limb ratios and facial features.
Beyond the physical, people also tend to marry people from a similar socioeconomic, ethnic, or religious background. For instance, a university-educated individual with a prestigious career will likely find another university-educated, high-earning individual. The same applies for low-earners and under-educated individuals.
The consequence of assortative mating is that the gap widens between various socioeconomic classes. The rich and well-educated pair off, accumulating more wealth, connections, and opportunities, leaving the poor to perpetuate the same habits, culture, and teachings to later generations.
All Doom and Gloom?
From the picture painted above, it looks as if all is doom and gloom. If you’re lucky enough to find yourself in a virtuous circle, then things will keep getting better and better. But if you find yourself locked into the vicious circle? Well, good luck finding a way out.
Let’s just stop for a second, though.
Although certain situations do perpetuate themselves and reinforce the cycle as a whole, there are two considerations that need to be made:
1. Long-term trends indicate a regression to the mean.
Advantages beget advantages. When a social media site such as Twitter or Facebook attracts a lot of users, it attracts developers, who create apps and further improvements to the site. As the site adds more features, it becomes more attractive to potential users. The site becomes more and more popular.
We see these cycles happen over and over on both an individual basis and on a wider level. However, initial advantages and disadvantages erode over time. Gradually, groups that perform above or below the general population eventually regress to the average.
Powerful civilizations and corporations stagnate as bureaucracy gets in the way of adapting to change. The status of a surname gets diluted as new individuals and groups begin to excel and gain prestige. Though mobility may be slow for the most part, the important part is that it is fluid and dynamic, not static.
2. There are outliers.
The reason why Clark traces surnames over hundreds of years is to account for outliers. Outliers refer to the wealthy heir who chooses to pursue a personal passion over high finance, or an individual from an underprivileged family who finds opportunities to excel in their education and career.
While studies point to general groups of people and their progress over time, they are designed to minimize the effects of individuals who stand out from the overall trends. Individuals who, despite the probability of facing the same fate as their predecessors, took a different route.
His research indicates that over 50 percent of our income and education can be predicted from birth. Yet that still leaves a large percentage of our fate that is unpredictable. And what is unpredictable is malleable.
You Have a Choice
It’s difficult to break cycles. Cycles continue because of feedback loops, where an iteration of the cycle reinforces the previous one. These systems can either propel you upwards, or lead you into a downward spiral.
At the same time, virtuous circles and vicious circles are not infinite. When an intervention occurs, the circle can be broken, opening to new possibilities and uncertainties. Given enough time, new circumstances arise, weakening a link and breaking down the cycle.
Above all, we carry the power of choice. We can intervene in our own lives. We have the free will to decide what choices we make and what attitudes we carry. When we recognize that we are responsible for ourselves, we become in control of our future.
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