The video “Wealth Inequality in America” was recently featured on Upworthy (www.upworthy.com), a social-media megaphone. It was then re-posted by a significant minority that’s become more infatuated with socialism. The video is not only misleading, but the research methods of its underlying study are laughable.

The content is based on a 2005 survey by Michael Norton and Dan Ariely, “Building a Better America — One Wealth Quintile at a Time,” that surveyed a group of Americans with the goal of determining the “ideal level of wealth inequality.”

Norton and Ariely claim that not only do Americans underestimate the distribution of wealth in the United States, but they also prefer to live in a country with greater wealth equality. It’s important to examine how they arrived at this conclusion.

The survey offered participants three unlabeled pie charts showing possible distributions of wealth: 20 percent to each 20 percent of the population, Sweden’s distribution (36 percent, 21 percent, 18 percent, 15 percent, 11 percent), and the U.S. distribution (84 percent, 11 percent, 4 percent, 0.2 percent, 0.1 percent).

Participants were shown each pie chart paired with another and asked to select between them the country where they preferred to live. However, Norton and Ariely’s instructions limited their choice by the “Rawls constraint.”

Proposed by John Rawls in his 1971 book, “A Theory of Justice,” the constraint is based on his theory that every member of society has an equal claim on a society’s goods, and inequality can only be allowed if it offers advantages to those who are the worst off.

Rawls did not believe in the right to own the means of production or the freedom of contracts. His collectivist political theories have always been controversial and widely criticized.

When selecting the country the respondents wanted to join, the Rawls constraint was to “imagine that if you joined this nation, you would be randomly assigned to a place in the distribution, so you could end up anywhere — from the very richest to the very poorest.”

That absurd constraint actually defeats the goal of finding an “ideal level of wealthy inequality” because it predefines what “ideal” means. Everyone, given that instruction, should pick the most equal distribution. If wealth assignment was completely random, there would be no reason for anyone to gamble by choosing an unequal distribution.

Under these instructions, remarkably less than half (43 percent) chose the equal distribution. A total of 47 percent chose Sweden, a gamble, and 10 percent even chose the United States, the riskiest wager.

When the U.S. distribution, the most erroneous choice under the Rawls constraint, was paired with socialism, a surprising 23 percent of participants chose the United States.

The filmmakers sarcastically call the equal distribution “the ‘dreaded’ socialism.” They state, “We all know that won’t work.” But despite the tone, most Americans in the study were so confident socialism wouldn’t work, they didn’t choose it. Even though it was the correct answer, they chose Sweden.

In truth, the participants probably just chose the middle of an odd number of options. Psychologists have observed that the most moderate choice tends to be the most popular when the question does not resonate with the participants. Furthermore, the anchoring effect likely encouraged them not to stray far from 20 percent.

Wealth inequality may not even be the measure we should be looking at. It could be caused either by economic freedom or a dictatorship.

There will always be individuals who have a net worth of zero. As of 2000, 15 percent of Americans were in this group. Any widespread economic growth will make the wealth gap increase. Only by limiting growth or redistributing wealth can inequality measures be held down during such growth periods.

However, wealth inequality can be the result of corruption. An administration that doles out wealth to those it favors while impoverishing or regulating others also creates wealth inequality.

The difference between these two regimes is that the one with economic freedom will have a higher gross domestic product (GDP) per capita, or average individual income.

In 2013, the Heritage Foundation’s Index of Economic Freedom (www.heritage.org), a study in its 19th year, again found a correlation between GDP per capita and economic freedom. The index reported that the difference between the GDP per capita of free and mostly unfree countries was $39,013, or an 88 percent gap.

Given that the average global GDP per capita is $12,500 (slightly lower than even the average of “moderately free” countries), it seems economic freedom ought to provide a better and more realistic criteria than wealth distribution under the Rawls constraint for choosing which country we prefer to live in.

Each year that the Heritage Foundation has calculated the index, it has found a “strong relationship between economic freedom and levels of per capita income.” In addition to higher incomes, economic freedom has correlated to lower poverty rates, better education, and more comprehensive health care.

The United States ranks 10th and “mostly free” on the index. Our GDP per capita is $48,387, the eighth highest in the world.

The filmmakers of “Wealth Inequality in America” would like you to believe wealth inequality is horribly wrong. However, if the wealth gap comes from economic freedom and economic growth, wealth inequality may be more descriptive of prosperity and freedom than poverty and corruption. The film’s underlying study by Norton and Ariely describes the experimenters’ own bias more than the beliefs of the average American.

The underlying concern of everyone should be how to help those with very little income to build net worth.

In the meantime, take comfort that economic freedom provides a better measurement of a healthy society and the United States still ranks relatively high.

David John Marotta is president of Marotta Wealth Management, Inc., which provides fee-only financial planning and wealth management at emarotta.com. Megan Russell studied cognitive science at the University of Virginia and now specializes in explaining the complexities of economics and finance at www.marottaonmoney.com. 

As a kid, I remember watching a TV show called “What’s My Line?” with my parents. The point of the show was to have four people try to determine which of the three contestants was a test pilot, an astronaut, a mountain climber, or in some other unusual profession. When they were finished asking questions and voting on who the actual person was, they would ask the imposters to stay seated and the real person in that profession to stand up.

My oldest daughter is getting married, so my wife Gail and I went to buy a suit for me at the mall. The young man who waited on us asked my sizes and started showing us suits. He smiled and was friendly, yet asked no questions about our needs. Not finding what we liked, we left.

We drove down the street to a men’s clothing store. As we entered, Louis came up and introduced himself, asked our names, and what we were seeking. He inquired if there was a special occasion for the purchase of the suit, when we would need it by, and the colors we were considering. He immediately stated that if we decided to buy a suit today, it would be finished with any alterations in 10 days, in time for the wedding.

Louis measured me for the jacket, pants, and shirt. He even brought over a pair of black shoes for me to try on with the pants and jacket. While we were debating about the purchase, Louis asked about the color of my wife’s dress for the wedding. Louis then picked out a shirt and tie for me to complement my wife’s dress, made a knot in the tie, placed it against the shirt, and put both under the jacket. Wow. It looked great and went well with my wife’s dress.

I could see Louis was using the consultative selling process. Louis did not sell us. We closed the sale ourselves. We did not want to travel to another men’s store to look at or try on clothes when he took care of all of our needs.

The sales lesson is here for you:

§ Louis built a friendly rapport in the first minute of our meeting.

§ By asking questions, he quickly determined why we were there, what we were looking for, the time frame for the purchase, and the outcome we wanted from our investment. Louis knew what was motivating us to buy.

§ He impressed us with his knowledge of clothing, style, the presentation of his product, and filling our needs. He wowed us.

§ The price was not the determining factor in the sale.

Louis is the “real salesperson” who stood up; the other salesperson was the imposter. What about your salespeople? Are they real salespeople? Or, are they just acting and are really imposters? Whose fault is that?

If your salespeople do not stand up, then you as the boss need to help them. You need to help them study what motivates people to buy and brainstorm how to wow your clients. As the boss, it is your job to help them become their best to be real salespeople. You need to step up and train them or lose customers to people like Louis.

James McEntire is a business and sales coach. Contact him at (315) 225-3536 or email: james.r.mcentire@gmail.com