Rory Sutherland Rory Sutherland

Hailo matters more than HS2 – but we just can’t see it

issue 02 March 2013

One of Britain’s exam boards was attacked last year for a question in a GCSE religious studies examination: ‘Explain briefly why some people are prejudiced against Jews.’

Is this really a theological question? Or does it belong in biology? Or psychology? Or economics?

The Canadian evolutionary psychologist Steven Pinker in The Blank Slate devotes a few pages to the issue of prejudice, including not only anti-Semitism but also hostility towards trading groups and intermediaries everywhere: from Chinese shopkeepers in Malaysia to Armenians, the Gujaratis and Chettiars in India and Korean store-owners in the United States.

Pinker partly attributes this to what economists call ‘the physical fallacy’. We have evolved an innate sense of value that makes us far more content when we pay money for physical goods than for services or intangible benefits. Regardless of the usefulness or advantages these services bring, we are much more begrudging of money we spend (and hence of the money other people make) on intangible things than we are when we pay people for, say, manufactured goods or agricultural produce.

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