Envy and Jealousy Tendency
The deep-seated human tendency to compare one's situation unfavorably to others and to feel pain at their success —even when that success has no effect on one's own absolute wellbeing. Warren Buffett called envy 'the stupidest of the seven deadly sins' because you don't even feel good temporarily.
“A member of a species designed through evolutionary process to want often-scarce food is going to be driven strongly toward getting food when it first sees food.”
Concept Analysis
Definition & Origins
Envy and Jealousy Tendency encompasses two related but distinct social emotions: envy (the pain experienced at others' success or good fortune, even when it does not diminish one's own) and jealousy (the fear of losing what one has to a rival). Munger considered these among the most corrosive and irrational of the psychological tendencies — producing suffering in the person subject to them while generating nothing useful, and driving institutional and market behavior that destroys value for all parties involved.
Warren Buffett, Munger's partner and closest intellectual companion, famously described envy as "the stupidest of the seven deadly sins, because you don't even feel good temporarily." Munger amplified this observation into an analytical framework: envy is the only negative emotion that cannot produce even short-term benefit for the person experiencing it. Anger at least produces adrenaline. Fear at least produces caution. Envy produces only pain and drives behavior that typically makes the envier's situation worse.
Munger observed that most human motivation is not driven primarily by greed — the desire for more than one currently has — but by envy: the desire to have what others have, or to prevent others from having what they have. This distinction has enormous analytical implications for understanding competitive market behavior, compensation design, and social policy. When Adam Smith described greed as the invisible hand of markets, he was describing a less destructive force than what Munger identified: envy, which is not merely a desire for more but a specifically comparative pain at the success of others.
The evolutionary basis of envy is straightforward: in small-group environments where resources were limited and relative status determined access to mates, food, and protection, pain at the relative success of rivals was adaptive. The individual who felt no envy at a rival's success made no competitive response, ceding relative status without resistance. The individual who felt intense envy at a rival's success was motivated to compete. In modern environments where absolute welfare has become largely decoupled from relative status, the same drive produces zero-sum competitive behavior that destroys value rather than creating it.
Core Ideas
Envy operates through comparison. The absolute level of wealth, status, or achievement does not determine whether envy is experienced — only the comparison to a reference group does. A person with $10 million experiences envy in the presence of billionaires; the same person experiences contentment in the presence of the middle class. The reference group is the key variable, which is why absolute increases in wealth do not reliably produce increases in wellbeing. This is the basis of the "hedonic treadmill" — as absolute wealth increases, the reference group shifts upward, maintaining the relative comparison that drives envy.
Jealousy operates through threat perception. Jealousy is triggered not by comparison upward but by the perception of a rival threatening to take what one currently possesses. In business, established companies experience jealousy toward new entrants — not because the new entrant has something the incumbent lacks, but because the new entrant threatens to take what the incumbent has. This drives competitive responses that are disproportionate to the actual threat, often destroying the economics of both the incumbent and the entrant.
The envy-comparison interaction. Envy is most intense when the comparison is to people who are similar to the envier in most respects — a close colleague's promotion is more painful than a distant celebrity's success. This is because similarity makes the upward comparison feel contingent rather than categorical: "they got what I could have gotten" rather than "they have what I could never have." This explains why workplace envy is typically directed at peers rather than at executives, and why envy within families is more destructive than envy between strangers.
The Reference Group Trap. Successful investment involves deliberately choosing a reference group that is not the most recent market performance. The investor who compares their portfolio to the S&P 500 each quarter is choosing a reference group that systematically produces envy-based distress — when the market rises more than the portfolio, envy drives risk-taking; when the market falls less than the portfolio, envy drives defensiveness. Munger and Buffett's explicit rejection of relative performance benchmarks was partly a structural defense against the reference group trap.
The Antidote: Pleasure at Others' Success. Munger's antidote to envy was not merely intellectual suppression but the cultivation of its positive inverse: the genuine ability to feel pleasure at others' success. He identified this — finding satisfaction in the success of colleagues, partners, and even competitors — as one of the rarest and most valuable character traits, and one that Buffett exemplified more completely than almost anyone he had known. This is not altruism — it is a practical tool for eliminating the cognitive distortion that envy produces.
Practical Application
Executive compensation ratchet. Corporate boards set executive compensation by benchmarking against peer companies, with a common target of "at or above the 50th percentile of peers." This produces a ratchet: if every company targets at or above the 50th percentile, the entire distribution shifts upward in every benchmarking cycle. The mechanism is pure envy at the institutional level — each board experiences envy of peer companies' executive packages and ratchets upward to match. The result is a compensation inflation that has no connection to performance and is driven entirely by comparative rather than absolute evaluation.
Value-destroying competitive behavior. Airlines that engaged in price wars rather than allowing new entrants to take some market share were acting on jealousy — the pain of threatened market share loss triggered responses that destroyed the economics of entire routes. The rational calculation (allow some share loss, maintain pricing discipline) was overwhelmed by the jealousy response to the threatened deprival. This is a recurring pattern in industries facing disruption: incumbents choose value-destroying competitive responses driven by jealousy over rational strategic adjustment.
Portfolio relative performance. Investment managers who evaluate their performance relative to a benchmark are subject to benchmark envy — the constant comparison to the benchmark creates envy-based distress when trailing the benchmark, driving behavior (buying what's in the benchmark, reducing tracking error) that prioritizes benchmark parity over absolute return. This institutional envy explains why so many active managers converge toward index-like portfolios: the envy of the benchmark's performance drives convergence toward the benchmark's composition.
Common Misconceptions
Misconception 1: Envy drives productive competition. While competition can produce beneficial outcomes, envy itself — the pain at others' success — generates no useful output. The productive aspects of competition come from independent striving for excellence, not from the emotional distress of comparison. Munger was explicit: the desire to be better than others is not the same as the pain of others being better than you; the former can be productive, the latter never is.
Misconception 2: Greed is the primary motivator in markets. Munger observed that most human motivation is driven not primarily by greed but by envy — the desire to have what others have or to prevent others from having what they have. Misidentifying envy as greed leads to flawed analysis of competitive behavior, compensation design, and institutional incentives.
Misconception 3: Benchmark comparison is a rational evaluation tool. While relative performance measurement appears analytical, it systematically triggers envy-based distress that distorts decision-making. The investment manager trailing a benchmark makes envy-driven trades that prioritize psychological comfort over absolute return.
Munger's Own Words
"The idea of caring that someone is making money faster [than you are] is one of the deadly sins. Envy is a really stupid sin because it's the only one you could never possibly have any fun at. There's a lot of pain and no fun." — Charlie Munger, Wesco Annual Meeting (2003)
"As I have shared the observation of life with Warren Buffett over decades, I have heard him wisely say on several occasions: 'It is not greed that drives the world, but envy.'" — Charlie Munger, The Psychology of Human Misjudgment (Harvard, 1995)
"Envy/jealousy is extreme in myth, religion, and literature wherein, in account after account, it triggers hatred and injury. It was regarded as so pernicious by the Jews of the civilization that preceded Christ that it was forbidden, by phrase after phrase, in the laws of Moses. You were even warned by the Prophet not to covet your neighbor's donkey." — Charlie Munger, The Psychology of Human Misjudgment (Harvard, 1995)
Thought Evolution
Related Concepts
Case Companies
Corporate boards set executive compensation by benchmarking against peer companies, with a common target of "at or above the 50th percentile of peers." This produces a ratchet: if every company targets at or above the 50th percentile, the entire distribution shifts upward in every benchmarking cycle. The mechanism is pure envy at the institutional level — each board experiences envy of peer companies' executive packages and ratchets upward to match. CEO compensation in the S&P 500 has grown from approximately 20x median worker pay in 1965 to over 300x by 2020, driven largely by this envy-based ratchet mechanism.
Airlines that engaged in price wars rather than allowing new entrants to take some share were acting on jealousy — the pain of threatened market share loss triggered responses that destroyed the economics of entire routes. The rational calculation (allow some share loss, maintain pricing) was overwhelmed by the jealousy response. Southwest Airlines' entry into established markets consistently triggered pricing responses from incumbents (American, United) that were economically destructive to all parties.
Investment managers who evaluate their performance relative to a benchmark are subject to benchmark envy — the constant comparison creates envy-based distress when trailing, driving behavior (buying what's in the benchmark, reducing tracking error) that prioritizes benchmark parity over absolute return. This institutional envy explains why so many active managers converge toward index-like portfolios while charging active management fees: the envy of the benchmark's performance drives portfolio convergence toward the benchmark's composition.
Mentioned In
Source: Poor Charlie's Almanack, The Wit and Wisdom of Charles T. Munger