School kids as young as 5 are to be encouraged to become entrepreneurs in a new government initiative announced last week, spearheaded by Lord Young and publicly backed by  David Cameron. Much about this worries me, even if we do need to encourage entrepreneurial spirits and there is a certain logic to the plan. While not a Faustian pact, such initiatives give a very clear message about what we as a society value and maybe more importantly, research shows that encouraging business and money oriented attitudes create a likelihood that children’s more prosocial and generous character traits will be toned right down as self-interest and more instrumental motives become stronger.

The details of the initiative are that primary aged children will be given a fiver to start their own businesses, while plans are laid for an enterprise culture to sweep through secondary schools and universities, creating a generation of savvy money-makers. I am not against business or creative entrepreneurship, but I have deep worries about what kind of human values such an emphasis on money and profit might be encouraging. Leaving aside what the idolisation of business and markets might have done in recent years to society, important research shows graphically  how being exposed to market and monetary thinking turns off human traits that we should be valuing if we want a decent society and a remotely caring social fabric.

In one fascinating experiment [1] subjects were given words to re-arrange into sentences. Some had in front of them a random selection of words whereas others had similar ones but also some words linked with finance such as ‘profit’ or ‘high salary’. After this task they had to do a more complex puzzle, and they could both ask for and offer help. Those whose sentences comprised financial words considerably less likely to ask for or offer help.  Simply using financial words prods us to act more selfishly and self-reliantly.

In another experiment people were asked to play a game and told the rules. One group were informed that this was the ‘Wall Street Game, while others knew it as ‘The Community Game’. Amazingly 70% of those playing the ‘Community Game’ cooperated with each other, as opposed to only 33% playing the ‘Wall Street Game’, even though of course it was completely the same game [2].

We use different psychological and brain systems when working from market as opposed to social or relational values. Monetary thinking encourages self-interested, instrumental and less relational approaches to life. One recent study  [3] showed that, while people mostly don’t approve of practices such as child labour, land grabs or cruelty to animals, when induced into a monetary  market mentality they are far more likely to override such principles.  Those not in a market state of mind refused to accept money if this led to harm to an animal, but not so those  in a market mind-set.

The world we live in is increasingly consumerist and money orientated, and we should be worrying about this in relation to our children. Recent decades have witnessed a huge commercialisation of children’s lives, as they are pressured to consume by a bombardment of advertising. American children apparently spend about 40 billion dollars each year and influence parental spending of about 700 billion dollars. Increasingly they prefer to shop online than play,  according to Juliet Schor [4]. Nearly half of American youngsters dream ‘a lot’ about becoming rich, and more and more define themselves in terms of what they wear and look like, and think that money will make them happy. With such  values come less altruistic or generous attitudes and behaviours.

The current vogue for rewarding kids does not help. Coaxing them into desired behaviours by bribes of pocket-money or presents, or even gold-stars, immediately changes a child’s motivations. We know from work in the Max Planck institute in Germany that toddlers as young as 16 months love to help adults, and will for example pick up and return dropped objects with glee and pleasure [5]. However, when rewarded for this with things they simply don’t help the next time. If the reward remains the love of helping, they do it time and time again. Being rewarded with money or an object, what psychologists call extrinsic rewards, takes away the real, intrinsic, reward, that warm glow we feel inside when we do something for another person.

Helping others fires reward circuits in our brains, it makes us feel good. On the other hand, doing something for an ulterior motive, such as a financial reward for an adult or a toy for a child, is just not as intrinsically rewarding. Recent studies of toddlers under two years old showed that they even felt happier when giving treats to others than when receiving them themselves. Not only that, they were happier if the gift was costly, and they gave up some of their own resources for another person rather than giving a treat at no cost to themselves. What will Lord Young’s initiative do to this character trait?

Similar research is endless. Blood donations often decrease when donors begin to be paid for them, for example [7]. The researcher Lara Aknin  [8] suggests that money can indeed make us happy, but mainly if we spend it on other people! Looking at samples from 142 countries with very different levels of income, she found that irrespective of other factors, spending money on others predicted happiness.

And she found that the same is true for children [6]. It is worth remembering that helping others not only makes us feel good, it also makes us healthier. One study showed  that the more hours of community volunteer work undertaken the higher the psychological and physical health benefits[9] . Being helpful, like volunteering, even  reduces mortality rates.

Of course, we need our children to be creative and flexible and take initiative and even have the skills to turn a profit. But at a time when children’s mental health is worse than ever according to most reports, we also must worry  about the cost of raising mini Apprentice winners. Jonathon Swift said that a wise man should have money in his head but not in his heart. I think we should really be worrying what is in the hearts of our children, given the influences they are increasingly subjected to.

[1]          K. D. Vohs, N. L. Mead, and M. R. Goode, ‘The psychological consequences of money’, science, vol. 314, no. 5802, pp. 1154–1156, 2006.

[2]          V. Liberman, S. M. Samuels, and L. Ross, ‘The Name of the Game: Predictive Power of Reputations Versus Situational Labels in Determining Prisoner’s Dilemma Game Moves’, Pers Soc Psychol Bull, vol. 30, no. 9, pp. 1175–1185, Jan. 2004.

[3]          A. Falk and N. Szech, ‘Morals and Markets’, Science, vol. 340, no. 6133, pp. 707–711, May 2013.

[4]          J. Schor, Born to Buy: The Commercialised Child and the New Consumer Culture. New York: Simon & Schuster, 2006.

[5]          F. Warneken and M. Tomasello, ‘Helping and cooperation at 14 months of age’, Infancy, vol. 11, no. 3, pp. 271–294, 2007.

[6]          L. B. Aknin, J. K. Hamlin, and E. W. Dunn, ‘Giving Leads to Happiness in Young Children’, PLoS ONE, vol. 7, no. 6, p. e39211, Jun. 2012.

[7]          J. Costa-Font, M. Jofre-Bonet, and S. T. Yen, ‘Not All Incentives Wash Out the Warm Glow: The Case of Blood Donation Revisited’, Centre for Economic Performance, London, UK, CEPDP1157, CEP discussion papers CEPDP1157, 2012.

[8]          L. B. Aknin, C. P. Barrington-Leigh, E. W. Dunn, J. F. Helliwell, R. Biswas-Diener, I. Kemeza, P. Nyende, C. E. Ashton-James, and M. I. Norton, ‘Prosocial Spending and Well-Being: Cross-Cultural Evidence for a Psychological Universal’, Journal of Personality and Social Psychology, 2013.

[9]          P. A. Thoits and L. N. Hewitt, ‘Volunteer work and well-being’, Journal of Health and Social Behavior, vol. 42, pp. 115–131, 2001.