Does a Rising Tide Lift All Boats?

People are fond of analogies that help them visualize concepts that can be difficult to grasp. Steve Jobs used an analogy when he said, “Computers are like a bicycle for our minds.” Another common analogy is describing the human brain as a computer.

One analogy that’s kicked around quite a bit in politics is, “A rising tide lifts all boats.” That’s easy to picture. After all, when the tide rolls in all boats sit higher relative to the docks they’re tied to or some other stationary object.

Politicians like to use the phrase when it comes to the economy. If more tax cuts are given to the wealthiest people, they’ll spend their extra money creating jobs or buying more stuff. Either way, more goods are sold which means more people are employed to produce and sell those goods. Everyone is better off because all boats have been lifted.

But there’s a problem. The analogies we use are only comparisons to help us understand something but they’re not the actual thing. In one sense they’re like a map. A map can be a helpful tool but it’s not the actual terrain. It can never fully represent the real thing and the more diverse the terrain is, the less a map can fully represent it.

People who use the rising tide analogy want us to believe everyone is better off when the wealthiest among us do better. There is some truth to that. However, it ignores a basic tenant of behavioral economics regarding how we make comparisons and decisions.

You see, most people don’t simply look at their situation relative to how they were at some point in the past. Rather, we have a habit of comparing ourselves to others in the moment.

We see this publicly played out in sports quite often. Let’s say an athlete has a great year and gets a huge raise because he or she is considered among the best in their sport. They’re happy! But the moment the athlete learns someone else just got more money, discontentment sets in. No longer do they care that they’re making significantly more than they used to. Instead, the athlete feels slighted compared to the other, higher paid athlete.

The same can be said of the average American. While many may be a little better off than they were five or ten years ago based solely on their income, they don’t necessarily see it that way. That’s probably because they’re not comparing their take home pay to prior paychecks. In fact, if inflation, medical bills, or other things that occur in life may have eaten away at their take home pay. That’s a big reason people often feel they’re working harder than ever but have little or nothing to show for it.

Another comparison point comes when people hear about senior executive compensation at large corporations. For example, did you know back in 2005 the average CEO made 525 times more than the typical American worker made? That pay differential took a significant dip due to the 2008 recession but it’s trending back up and was 369 times more in 2012 (344 in 2022).

Can you see why someone might be disgruntled? Most people have an innate sense of fairness, and of right and wrong, and when that gets violated, many people would rather get nothing just to see the other person get nothing too. It doesn’t make economic sense because economically a little bit of something is better than a lot of nothing.

Several years ago, I conducted survey with my blog readers. One question read: You’re playing a game, and your partner was given $100 to share with you any way they see fit. The two of you get to keep the $100, but only if you think you’ve been treated fairly. What’s the least amount you would want in order to not reject the deal?

Just over two thirds of the respondents said sharing $50 of the $100 would be fair. The average for all responses was $41.88. Even though they’d have been better off only getting a dollar, the vast majority would reject the deal if the split wasn’t about equal.

It doesn’t make sense economically because if you were given $30, $20, even $1 that’s better than nothing, and it’s more than you started with. But that’s not how most people typically think and behave. When people don’t feel they’re being treated fairly they take action…even if those same actions might hurt themselves in the end.

The tide may be rising but all the people in the little boats stare at the luxury liners and from their vantage point is seems as if those ships are getting a bigger lift…and they don’t like it.

My fear is this; if our government in conjunction with big business doesn’t come up with ways to make the average workers feel like they’re being compensated in a more equitable way, the consequences could be worse for all of us in the long run. Whether or not you agree with the “We are the 99%” and “March on Wall Street” movements, they reflect what I’m sharing about here. People are unhappy and they’re starting to take action.

A take-away for those of you who aspire to be more effective persuaders would be this – whenever you use analogies to make a point, make sure the analogies are appropriate for your audience or your best laid plans could backfire on you.

Brian Ahearn, CMCT®
Chief Influence Officer

 

influencePEOPLE 
Helping You Learn to Hear “Yes”.
2 replies
  1. Anonymous
    Anonymous says:

    Very well said. I will be cautious when utilizing this principle in a talk I'm giving this Sunday at church. The topic I've been given is that "Marriage between a Man and a Woman is ordained of God." Considering the subject of discussion I must be careful what analogies I use.

    Reply

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