Fear and Loathing of Wall Street: Political Liberalism, Uncertainty, and Threat Management in a Dangerous Economic World

Abstract

Conservatives perceive the world as a more dangerous and threatening place than liberals, which explains conservatives’ more cautious social behaviors and their greater support for policies (e.g., anti‐immigration and harsher punitive measures) that aim to manage and reduce perceived threats and uncertainties. However, past research operationalized the “world” as a place replete with social and physical threats (e.g., street crimes and terrorism). Less attention has been given to the economic world, which is equally characterized by threatening events (e.g., corporate crimes, stock market crashes). In four studies, we examined whether differences in appraisal of the economic world explain ideological differences in stock market participation and neoliberal economic policy preferences. The findings reveal that liberals perceive the stock market as a more dangerous and riskier place than conservatives. This asymmetry explains liberals’ cautious investment behaviors, their greater support for regulation of the stock market, and their greater opposition to privatization of Social Security. We argue that liberals’ greater support for these policies serves to protect investors and the general public from the perceived harms of the economic world. Our findings suggest that the psychological processes underlying threat management and uncertainty reduction are similar for conservatives and liberals, but these processes are context dependent.