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Why Inequality Is Bad for the One Percent

By Jason Marsh | September 25, 2012 | 13 comments

What Mitt Romney’s “47 percent” video reveals about the links between inequality, compassion, and happiness.

The video of Mitt Romney deriding the 47 percent of Americans “who are dependent upon government” has re-ignited a debate about social class in America, roughly one year after the Occupy Wall Street movement first took to the streets to protest rising inequality.

At a $50,000-a-plate fundraiser, Romney scoffed at that 47 percent “who pay no income tax” and “believe they are victims.” Romney’s comments upset many Americans because he seemed to be attacking some of the most vulnerable members of our society.

Aside from whether they actually “believe they are victims,” research has consistently shown that people lower on the social totem pole suffer significantly worse mental and physical health than those better off, including higher rates of heart disease, depression, suicide, several forms of cancer, and death.

Yet a new line of psychological research suggests there’s another victim of inequality: the rich themselves.

In a series of studies, researchers have found that attaining high social status impairs key social and emotional skills. It makes people less interested in connecting with others. It hinders their ability to read other people’s emotions. It makes them less compassionate and less generous.

Indeed, Romney’s comments could make him the poster child for these social and emotional deficits. And here’s why the people at that $50,000-a-plate dinner should care: These are skills that research has also linked to leading a happy, meaningful life. So as the super rich in this country assume an ever-loftier status above the 47 percent (or the 99 percent), they risk depleting their own reserves of happiness.

What’s more, this research carries troubling implications for rich and poor alike: that inequality may be self-perpetuating, because as our society grows more unequal, the rich will be less likely to care about the poor. Taken together, these studies suggest why inequality should be a concern for anyone who cares about the health and well-being of American society as a whole.

Wealth hurts empathy

A few decades ago, the typical CEO used to earn about 30 times more than his or her employees; now he or she earns 110 times more. The Congressional Budget Office estimates that the top one percent of Americans saw their after tax-income grow by 278 percent between 1979 and 2007; over the same period, the middle 20 percent of Americans saw their incomes rise by just 35 percent—and the bottom fifth saw just 18 percent growth.

Indeed, a recent Pew Research Center survey found that Americans see inequality as the greatest source of social conflict in the country today, eclipsing conflicts around age, race, and immigration. Two-thirds of respondents said there are “very strong” or “strong” conflicts between rich and poor, roughly a 40 percent increase from just two-and-a-half years ago.

Researchers’ concerns about inequality have generally focused on the plight of the poor and the shrinking middle class, exploring how inequality hurts the mental and physical health of the less fortunate.

“There are powerful psycho-social effects of inequality,” says Richard Wilkinson, a British epidemiologist who has spent years researching these effects, which he documents at length in his recent book, The Spirit Level. “As status differences grow, we worry more about status insecurity, we get widespread anxiety about self-esteem, and that brings rising rates of mental illness and depression.”

Originally, it should be noted, researchers expected to find these kinds of effects among the upper class—heart disease was thought to be “the executive’s disease,” brought on by all the responsibilities of his status.

Instead, they’ve found that higher status affects other matters of the heart: It makes people psychologically disconnected from those around them.

For instance, in a 2010 study published in Psychological Science, researchers found that people of higher socioeconomic status (SES) were worse at reading other people’s emotions—a skill known as “empathic accuracy,” a basic part of empathy.

The study’s primary author, Michael Kraus, now an assistant professor of psychology at the University of Illinois, believes these results show how higher social status makes people more self-absorbed.

“As you become more wealthy, you become more focused on the self,” he says. “When I think I am higher on the social class ladder relative to others, I start to think about all the personal freedoms and opportunities I have relative to others, and it is this process that makes me less accurate in reading emotions.”

But isn’t there a chance that these differences between rich and poor are innate—perhaps the rich get further in life because they’re less preoccupied with other people’s needs?

To test this idea, the researchers—including Dacher Keltner, the Greater Good Science Center’s faculty director—manipulated people’s sense of status, making them feel higher or lower on the social ladder.

Regardless of their actual SES, people temporarily made to feel upper class had a harder time reading others’ emotions; people made to feel lower class showed better empathic accuracy.

This suggests that there’s something about the experience of high status that affects how we connect with others emotionally. In other words, a lack of empathy among the rich is a natural byproduct of inequality.

Further evidence comes from a study published late last year in the journal Emotion, which found that upper-class college students reported feeling less compassion than other students when they watched a video about children suffering from cancer. The heart rate of the non-rich students slowed down as they watched the video—a physiological sign of compassion. The rich hearts didn’t show that reaction.

“It’s not that the upper classes are coldhearted,” says study lead author Jennifer Stellar, a UC Berkeley graduate student and former Greater Good Science Center fellow (Kraus and Keltner served as co-authors). “They may just not be as adept at recognizing the cues and signals of suffering.”

Indeed, a 2009 study by Kraus and Keltner suggests that the upper classes are less attuned to social cues in general. This study, published in Psychological Science, found that college students from wealthier families appeared less engaged in conversations than did people of lower SES. They doodled while the other person was talking, rummaged through their backpacks, frequently checked their cell phone—in other words, they showed blatant disinterest in the other person, even if that person was also wealthy. They were even less likely to nod their head or laugh in response to something the other person said.

Using only college students in studies like this is usually seen as a limitation. But in this case, it shows how the psychological effects of status are so great that they can even make people tune out peers with whom they ostensibly have a lot in common. These weren’t people from different social galaxies; they were roughly the same age, part of the same collegiate community.

This underscores one of the biggest implications of this whole line of research: The rich aren’t just less inclined to connect with the riff-raff. They’re less inclined to connect with anyone.

“We’re showing a difference in behavior, regardless of who the wealthy are interacting with,” says Kraus. “It has implications for the wealthy interacting with the wealthy, as well as with the poor.”

As their own status and sense of self balloons, then, the rich risk disconnecting from other people—and that might include people within their class, or even their own family, not to mention people of other classes.

Wealth hurts happiness

All these results aren’t just bad news for people who might encounter indifference and apathy from the rich. They’re bad news for the rich themselves. The qualities that seem to be impaired by elevated status are the qualities that research has strongly linked to long-term happiness.

“Being compassionate, having empathic accuracy, being trusting and cooperative—these are keys to social connection and, in turn, happiness,” says UC Berkeley postdoctoral researcher Paul Piff, whose own research has found that people of higher SES were less willing to share money with a stranger or make charitable donations. (However, when they were made to feel lower status, they became more generous; the opposite was true for people made to feel high status—they became stingier.)

MaleWitch

Indeed, perhaps the dominant finding to emerge from positive psychology research over the past decade is that our happiness (and health) is largely determined by the quality and quantity of our social connections. Perhaps that’s why “pro-social” behaviors and emotions—compassion, empathy, altruism—have been so strongly linked to happiness.

Consider: Research by Sonja Lyubomirsky, a leading happiness researcher, has consistently found that people report feeling happier after doing nice things for others. Several neuroscience studies have found that giving to others activates pleasure regions of the brain. Research by psychologists Lara Aknin and Elizabeth Dunn has even suggested that spending money on others makes you happier than spending on yourself. And a Canadian study published last year, led by Myriam Mongrain, found that after people supported others compassionately for just five to 15 minutes every day for a week, the compassionate people reported significant gains in happiness and self-esteem six months later.

“We have pretty strong evidence that doing good things for others makes you happier,” says Lyubomirsky. “When you do kind acts for others, you feel better about yourself, you feel more optimistic, you see people as being more interconnected, and you strengthen your connections to others, who may help you in times of need. All of those things combine to increase happiness.”

These findings offer an explanation for why, once Americans attain an annual income of $75,000, more money doesn’t seem to bring more happiness: Beyond that point, perhaps our elevated sense of status brings with it the harmful social and emotional effects that offset the joys of more money.

Sure enough, one recent study found that people who were wealthier, or were just temporarily made to feel wealthier, were worse at savoring everyday pleasures—a key to happiness, according to prior research.

According to the authors of that study, which was published in Psychological Science, the results suggest that “the emotional benefits that money gives with one hand (i.e., access to pleasurable experiences), it takes away with the other by undercutting the ability to relish the small delights of daily living.”

In general, though, research suggests that money in itself isn’t necessarily the problem. It’s status—one’s relative place above others in your society.

If money were the problem, the poorest countries would be the happiest, but they’re not. The key, instead, seems to be inequality: The happiest countries are the ones with the most equality, like the nations of Norway, Denmark, Finland, and Sweden. These countries also rank among the highest in an index of compassion created by University of Minnesota researcher Ron Anderson.

By contrast, countries with more inequality, like the United States and the United Kingdom, have significantly higher rates of health and social problems: By Wilkinson’s analysis, mental illness is three times more common in unequal countries; infant mortality rates are also much higher, and life expectancy is significantly lower. Trust and social cohesion—important factors in happiness—are significantly higher in more equal societies.

John Gottman, the country’s leading marriage researcher, talking at a Greater Good Science Center event about the relationship between equality, trust, and healthy communities.

And unfortunately, the upshot of Kraus, Piff, and their colleagues’ research is that inequality may be self-perpetuating: The lack of compassion the rich feel might make them less likely to out look for the less fortunate, thereby increasing the gap between rich and poor—and the worse this gap gets, the research suggests, the less inclined the rich may be to do anything about it.

What can we do about it?

So if we can’t expect the upper class to spontaneously look out for the lower class, what can we do to address some of these psychological effects—for the benefit of rich and poor alike?

First, it’s important to remember that this isn’t a lost cause. Recall that in Kraus’s study, when people just visualized themselves as being lower on the social ladder, their skills of empathy improved.

“The encouraging thing about our work is that just a little shift can bring real improvements in empathy,” says Kraus.

It might be easy to engineer these shifts in a lab, but there are some grassroots efforts to engineer them in real-life as well.

One example are “poverty simulations,” programs in which high-powered people are made to assume the identity of a low-status person for a few hours, trying to navigate life’s challenges from their point of view.

“People say they feel completely crushed by the experience,” says Tiela Chalmers, a San Francisco lawyer who has been running poverty simulations at law firms around the country over the last five years. “They come out of it with a more empathic view of things.”

In that light, it’s useful to think of inequality not as something that eradicates empathy in the upper class but as a barrier to empathy—and possibly to happiness—that they can work to overcome.

One way to do that, aruges Piff, is through volunteering, which encourages contact between people of different backgrounds. Research suggests that this kind of contact can make it easier to identify with people from whom we’re often divided, whether by race, ethnicity, or social class. On the other hand, feeling isolated from other people and more focused on yourself is what stunts pro-social behavior.

In other words, insularity is an enemy of empathy.

“The rich aren’t bad people, they just live in insular worlds,” Piff says. “If you can do things to make your world less insular—which could be what you read, who you fraternize with—then you’re going to open yourself up to developing skills that contribute to a happy life.”

Indeed, a new study by the Chronicle of Philanthropy found that wealthier Americans donate a significantly smaller percentage of their income to charity than do the middle class, and when a high number of rich people are clustered in one neighborhood, that community’s giving rate is even lower. However, when they live in more socioeconomically diverse areas, the rich become more charitable.

Of course another approach to reducing the empathy gap is to target inequality directly. How to do that is a matter of partisan debate. Conservative proposals focus more on breaking down cultural class divides, such as Coming Apart author Charles Murray’s suggestion to eliminate unpaid internships and Senator John McCain’s call for a national service corps that makes people of different social classes work together in the same way that military conscription once did.

Liberals, on the other hand, emphasize redistributing wealth and increasing the welfare of the less affluent, through progressive taxation or corporate policies that prevent top earners from taking home too great a share of their company’s profits.

Robert Reich, former U.S. secretary of labor, talking at a Greater Good Science Center event about the relationship between social justice and social empathy.

Ultimately, argues Piff, hierarchies are a part of life, and eliminating inequality isn’t a realistic goal. What really matters for the happiness of the rich, the poor, and everyone in between is to prevent the kind of gross social stratification we’re seeing in the United States today.

“Runaway inequality makes it harder for people to relate to those who have different backgrounds from themselves,” he says. “But if you’re able to reduce the extremes that exist between the haves and the have-nots, you’re going to go a long way toward closing the compassion and empathy gap.”

So where does that leave Mitt Romney? The empathy gap has not been good for his campaign: A new Pew Research Center poll shows that he trails President Obama by eight percentage points—and 43 points in the area of “connects well with ordinary Americans.” For his own sake, Romney might do well to address inequality.

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About The Author

Jason Marsh is the editor in chief of Greater Good.

  

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Thank you for this article.  This is now one of my all-time favorites ever posted to the Greater Good site.  In my own family there are individuals who are financially struggling and a few individuals who are very close to the top 1% level.  Many of the points in this article hit home for me and gave me new ways of thinking about things.  Thank you!

Kelly | 2:37 pm, September 25, 2012 | Link

 

I am in the . . . probably not the 1% but high up there.

Without exaggeration, every single person I know is professionally or as a volunteer involved in an endeavor to alleviate the hideous ills of this world. And most of the people *they* know, out to the third or fourth degree. This is lawyers, doctors, teachers, social workers, and like that: We are the generation of the Peace Corps, Head Start, the War on Poverty, remember?

All of us give away more , much more not only of our time, effort, education, smarts, compassion but also of our cash than the 10% mandated by our various religions. So all of the studies cited above just don’t reflect what I experience.  And when that happens . . .

susan klee | 8:58 pm, September 25, 2012 | Link

 
Jeremy Adam Smith's avatar

Thanks for your comment, Susan. I think you
describe, very well, how affluent people can
diminish their insularity and mitigate the negative
effects that come with wealth. In the process,
you illustrate the positive points made in the last
section of this article, “What can we do about it?”

However, I’d be careful about feeling defensive, and of
universalizing your immediate experience. The one
percent (or close to it) is not a monolithic group—
different circles will vary in politics, values, culture,
activities, not to mention sources of wealth. So one
group may reject socially responsible values while
another might embrace them. And indeed, there are many wealthy and affluent people who are fighting to change the values and behavior of their peers. I hope this article helps give them the intellectual ammunition they need to make progress in that fight. As this piece makes clear, the stakes are now very high, for people of all social classes—we all lose when our society becomes too unequal.

Jeremy Adam Smith | 10:41 am, September 26, 2012 | Link

 

Female voters seem to be more disgusted with
Romney’s comments than Male. I guess the spread on
Female voters in favor of Obama will get bigger
(source: http://www.printcountry.com/content/who-
considers-themselves-part-of-romneys-infamous-
47.html)

JW Dewey | 9:19 pm, October 2, 2012 | Link

 

I wonder if the explanation for the change in compassion and charity due to adjustment of SES is the internalization of an implied demand or responsibility in the face of need.  I am not in the 1% but I have a well-paying job and one of my siblings is currently unemployed.  It is very hard for me to listen to complaints about his lack of money or opportunities without feeling like they are directed at me as a demand for financial assistance or judgment for not helping more (he is living in my second bedroom at the moment) - and my sense of charity is generally turned off by that demand/judgment.

Mona | 10:27 am, October 3, 2012 | Link

 

Looks like only 20% think they are a part of the 47% . It might be because the 47% is not really true. And income does not appear to make too much difference about whether people think they are a part of the 47% or not.

Source:
http://www.printcountry.com/content/who-
considers-themselves-part-of-romneys-infamous-
47.html

Lena Butler | 12:37 pm, October 3, 2012 | Link

 

A couple of things missing:
1. It is true that around 46% of Americans pay no income tax. This reduces their investment in efficient government and does make them more likely to expect handouts. Witness Greece, Spain, Italy (esp. southern), etc. What do we do about spreading the pain?
2. Veenhoven has suggested that government handouts don’t make people happier. His research is not without detractors, but nevertheless . . .

Also, conservatives give much more than liberals out of their own pockets. I should think everyone has read Arthur Brooks. You didn’t mention that both Obamas and Romneys give huge amounts to charity, Obama ca. 20%, Romney even more around 30%. Romney hates this to be known, by the way. But Biden gave very little, Al Gore almost nothing. Bill Gates is generous. Is he not empathic?

I can argue that the liberal-conservative charitable giving gap may be part of the reason why conservatives are indisputably much happier than liberals.

All-in-all, very good piece, with some jarring blind spots.

(I write this after the first debate, and over half of those who watched rated Romney as much more likeable. This suggests the empathy gap you speak of is an artifact of biased reporting. It shouldn’t have been a surprise. Romney served as a lay pastor in his church for years, visiting poor and ill and ministering to them. Of course he is deeply empathic.)

Lynn Johnson | 8:47 am, October 4, 2012 | Link

 

@ Lynn Johnson - Alleging that the poor have less “investment in efficient government,” you go on to ask, “What do we do about spreading the pain?” Seriously?

Take another look at the chart in the article depicting the dramatic divergence in the after-tax fortunes of the rich and poor in the United States. Where do you think the pain might be? Apart from the fact that you parrot the GOP line on income tax, which completely ignores other forms of taxation like the highly regressive FICA/SECA taxes and sales taxes at the state and local level, you have a stunted conception of pain. What about the pain of food insecurity? Of being unable to see a doctor or pay for needed medications? Of not being able to afford to run a car? Of being unemployed through no fault of your own? Of having no prospect of a better life? We could go on, but you do not appear to possess the requisite empathy to understand these forms of pain.

I also take great exception to your Fox-News-worthy reference to the European PIGS (Portugal, Ireland, Greece, and Spain). The right-wing myth is that these countries are in financial trouble because of unsustainable spending on the welfare state - a myth that feeds the American plutocracy’s desire to gut what is left of the social safety net over here. There’s just one, small problem with that narrative: it presents a part of the explanation as the whole explanation. Missing from the propaganda is any acknowledgment of the role played by massive speculative bubbles in real estate, aided and abetted by aggressive flows of international capital and some peculiar incentives resulting from new membership in the Euro zone. Just as in the U.S., however, the guilty parties in the financial sector who reaped exorbitant profits from this bubble refuse to take any responsibility for their actions, displaying not just a lack of empathy but outright moral degeneracy. And it is the ordinary people who end up paying for their mistakes through harsh austerity measures imposed by the representatives of global capital.

@ Greater Good - This article provides another, meaningful way of discussing the growing inequality that neither political party, rhetoric notwithstanding, will really address. But the long-run trends are clear and depressing. You may be able to say that you were on the right side of history, but I am afraid that you will not be able to arrest the slide. An insatiable beast has been unleashed, and it needs more than a little counseling session to correct its behavior.

Non Commercial | 6:28 pm, October 6, 2012 | Link

 

  Noncommercial, thank you for your submission. Dialog is vital to a robust society.
  Perhaps you are unfamiliar with the concepts of merchantilism and other government meddling in the free market. The rich get richer precisely because of government intervention. The nomenklatura rode in Mercedes. Paradoxically, social justice meddling ends up benefiting the rich and impoverishing the middle class.
  In fact, England would have been where Greece et al. are now had it not been for Thatcher’s rescue of the British economy. When she came to power, the projections were that by 2000 England would have the same standard of living as Albania. The credit bubble was another device of government meddling, eg, Barney Frank insisting we give mortgages to people who couldn’t pay them and then indemnifying the banks against the inevitable loss. Fanny Mae / Freddie Mac are the proximate causes of the bubble. You see, a country simply cannot continue to spend much more than it is able to generate in tax revenues, especially in arguably unproductive redistributionist schemes.
  Your comment about “Fox News” was gratuituous and unworthy. Genuine dialog is necessary to achieve the truth, which is always elusive. I emphasize Bastiat, Hayek, Von Mises, and you I suppose trace your genealogy to Marx.
  The facts I mentioned are incontrovertible: conservatives are happier, give more to charity, and are better citizens. I argue (infer) from those facts that progressivism corrupts individual morality. Veenhoven actually has shown that social programs do not seem to increase happiness. Some studies contradict him; so we continue to seek for a clearer vision. But the empirical basis for progressivism is certainly absent and possibly impossible.
  I argue that a flat tax is the only moral basis for income tax and that all redistribution must be based only on free choice and not the jails-and-guns of government. It is immoral that 46% of Americans pay no income tax. I assert that the diverging curves which you correctly emphasize are precisely because of progressive taxation. The rich work all new rules to their advantage. More rules will make it worse. Only fools think that you can enact laws that take money from the rich. The efforts worsen and not improve the inequity, which inequity I deplore. Government confiscation schemes promote selfishness; a flat tax might destroy it. Let’s try!
  Please seek out similar Hayek fans like myself for heart-to-heart dialog and we will all grow. In the mean time, let us practice lovingkindness meditation and appreciate all those who disagree with us.
  LJ

Lynn Johnson | 5:54 pm, October 7, 2012 | Link

 
Jason Marsh's avatar

@ Lynn Johnson: Thanks for your comments. I do
want to make one important clarification: These
issues are not about liberals vs. conservatives; they’re
about status, and what happens when individuals—
whether liberal, conservative, or of any other
ideological persuasion—achieve a significantly
elevated status over their fellow citizens. Neither my
article nor the research I cover suggests that liberals
would be any less susceptible to the social-emotional
effects of status than conservatives.

There can always be exceptions to some of these
findings—they don’t suggest that every single rich
person lacks empathy and compassion; indeed, we
could all rattle off the names of many fantastically
wealthy people who have shown remarkable
generosity in their lives. But the research clearly
suggests that, on average, people of higher
socioeconomic status are going to be less pro-social
than others—a finding backed up by the studies
showing that people of higher SES give a smaller
percentage of their income to charity than do people
of lower SES.

Jason Marsh | 9:10 pm, October 7, 2012 | Link

 

Jason’s comments are spot on! But as a positive psychologist, I am interested in the outliers, the exceptions to the rule. As I said, both Obama and Romney are remarkably generous. Why not study those types of rich people who seem to have compassion.

Obama’s work in community organizing might have left him with greater compassion. Romney’s calling as a lay pastor in his church put him in contact with poor and needy.

Can rich families be encouraged to immerse their children in work with poor, sick, incarcerated? I’d like to think that might be a solution!
LJ

Lynn Johnson | 6:23 pm, October 8, 2012 | Link

 

way up above, i stated that everybody i know—the 4? 7? percent is involved in ameliorating people in the “hideous ills of this world.”
Most days, I read the obits in the NYTimes and the SFChronicle. In the Times, especially, these are likely to be the death notices of the 1? 2? percent.
It is striking how many of them feature the good that these do-gooders do, after inheriting or making their gazillions.
I am always suspicious of studies that fly in the face of long-standing custom & tradition, not to mention the observation and experience of hundreds of people.
Next thing we read will be “Contrary to earlier reports . . . ” as we do many times every year, in every area of human endeavor.

susan klee | 7:00 pm, October 8, 2012 | Link

 
Jason Marsh's avatar

Thanks, Lynn. Yes, I am interested in that same
question and considered exploring it in my article,
but decided it would have been too much—a good
topic for a follow-up piece.

I think it’s useful to think about status as a situational
or environmental impediment to pro-sociality. In
other words, the rich frequently lack empathy not
because there is something inherently wrong with
them but because their social-emotional skills have
been impaired by their status and the influence it has
on their psychology.

In that light, status is another important external
factor—like group affiliation, the size of the crowd
we’re in, or even how late we are for an
appointment—that can influence how compassionate
we are in response to need or suffering.

So it is fascinating to consider what makes some of
these outliers tick—the people who somehow manage
to transcend their circumstance and preserve their
pro-social skills, despite their experience of great
status. A subject for a follow-up article, no doubt—
and, I hope, the subject of some follow-up research
by the psychologists I mention in this article.

Jason Marsh | 9:22 pm, October 8, 2012 | Link

 
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