Problem: The leader may not be able to retain both the good will of his/her followers and the status that his/her own prizes confer on himself/herself.
The leader may not be able to retain both the good will of his/her followers and the status that his/her own prizes confer on himself/herself.
WHY this may be a problem
Leadership may be legitimized in a number of ways, sometimes contradictory. In Iliad One Agamemnon derives legitimacy from both the quantity and special quality of his possessions and from his generosity in giving them. Losing either one may take him down a peg, at least as far as he sees it.
Consider one possible solution offered by Xenophon's Cyrus the Great (see "He Will Rock You", in the scene with Croesus where he explains how willingly others will give back what he has given (Xenophon Cyropaedia 8.2.13-23). His rule of liberality might be characterized as "Giving to the Grateful."
One way to think about the effects of a leader's generosity is to understand how the human brain tends to respond more negatively about losing something than simply not having something.
In their book Nudge (2008) Richard Thaler and Cass Sunstein explain human loss aversion in terms of an experiment conducted by Kahneman, Knetch, and Thaler (1991) to ascertain the "value" of a mug ("Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias." Journal of Economic Perspectives 5, no. 1: 193-206):
"Roughly speaking, losing something makes you twice as miserable as gaining the same thing makes you happy. In more technical language, people are "loss averse." How do we know this?
Consider a simple experiment. Half the students in a class are given coffee mugs with the insignia of their home university embossed on it. The students who do not get a mug are asked to examine their neighbor's mugs. Then mug owners are invited to sell their mugs and nonowners are invited to buy them. They do so by answering the question 'At each of the following prices, indicate whether you would be willing (give up your mug/buy a mug)." The results who that those with mugs demand roughly twice as much to give up their mugs as others are willing to pay to get one. Thousands of mugs have been used in dozens of replications of this experiment, but the results are nearly always the same. Once I have a mug, I don't want to give it up. But if I don't have one, I don't feel an urgent need to buy one. What this means is that people do not assign specific values to objects. When they have something to give up, they are hurt more than they are pleased if they acquire the same thing" (Thaler and Sunstein, Nudge 2008:33).
QUESTIONS to consider
Are there situations today where a leader is expected both to have a lot of resources and to be generous with them?
See related issues of the problem of liberality for Mark Antony.