Is great personal wealth good for people?

Robert Locke wrote the following to a correspondent, with me in the CC line, and I post it with his permission:

1. The average marginal emotional utility of money, above an upper-middle-class income, is zero. (I’m certainly not claiming there’s no point in climbing to upper-middle; there is. But then the curve flattens out.) If you don’t have money (I didn’t for the first 46 years of my life, and was seriously poor for a few years) you may think being rich would be really cool. It’s fascinating for the first three months, then you start to realize that most of what you can buy is toys, toys matter less than having other kids with whom to play with them, and any friends you can buy (they certainly exist) aren’t worth having. Life is the same drama with more expensive sets. Most of happiness is about emotional states that are just not affected that much by having a $50,000 painting hanging on your wall or a Ferrari in your garage.

2. The rich people I know who are exceptionally happy all have one thing in common: they either obtained their money by realizing some personal creative vision (in show biz, entrepreneurship, or whatever) or they spent the money they obtained otherwise realizing some personal creative vision. But it’s the realization of the vision that made them happy, and if they’d done it on a shoestring, they would be just as happy. In fact, inherited wealth can detach your rewards from your efforts, breaking a bond of satisfaction that is very important to people. And people won’t take your achievements seriously, and will resent you. (Justifiably, to some extent.)

3. Wealth carries enormous temptations to make yourself miserable. Middle-class life contains the built-in self-discipline of needing to function at work every day and get along with other normal, average people in your personal life. (None of this has made me like the poor, who behave badly. It has made me respect the middle class.) Wealth tempts you to think these constraints aren’t there for you. (They often aren’t.) It makes it very easy to be lazy, neurotic, decadent, and self-indulgent—none of which will make you happy. It makes it easy to be demanding, selfish, whiny, over-sensitive, and perpetually dissatisfied with whatever you’ve got. No matter how much money you have, you almost certainly socialize with people who have even more, which spoils the effect. Money tempts you into trying to be manipulative in personal relationships and embitters every family conflict. At the same time, you’re trying to project this “my life is perfect” facade because you think it ought to be, given how much it cost, and because everyone you know expects the people around them to be happy and nice all the time—because why should they put up with anything unpleasant, given how much they spend?

4. Seventy-five percent of the money you spend, above a certain level, isn’t even about buying luxuries. It’s about buying status. (Veblen really is right.) And because buying status with money is a relative game in which you’re trying to impress people who are on your own level (it doesn’t matter how impressive middle-class people you don’t know would find your stuff), it’s very inefficient and it’s a treadmill. This is why the Japanese pay their top executives in status directly, with 51.5 degree bows, status-reflecting grammar, etc. etc. It’s so much more efficient than giving them money to buy it with. And status is just a social arrangement in which you are the habitual recipient of respect, anyhow. And so much of the craving for respect is the just a frustrated craving for affection—which you aren’t getting because you’ve poisoned your personal relationships for the reasons discussed in #3.

5. When you’re rich, half the world begs to kiss your rear end every day. This is intrinsically corrupting. (Among other things, it explains why rich people don’t dislike poor immigrants. The only ones they encounter are sucking up to them like dogs.) It positively encourages you to take either a “screw the world, I’ve got mine” attitude, or a “tableau vivant” attitude towards the world, in which you care about the less fortunate, but they’re these action figures you play with to satisfy whatever emotional issues you have. Seeing the masses submit to you and accept (even revere) your privileges breeds contempt for them. It’s easy to give in to the sadistic pleasure of economic dominance for the sake of dominance, primp yourself on delusions of aristocracy, etc.

6. #1-5 above, when you live with them for years, can sink into a rut like any other rut. So it’s not even interesting. It’s just mechanical. But you feel like an idiot because you’re not stupid, so you know how privileged you are, and think you “ought” to be happy. So you hate yourself. So you hire an expensive shrink. Who just makes you more neurotic…

So wealth doesn’t make the rich happy and it does tend to make them nasty. So why would a sane society revere it? Nobody should earn more than $200,000 / yr.

- end of initial entry -

Carol Iannone writes:

Robert Locke is sounding a little like Tom Wolfe, who emphasizes that status is everything. I can’t quite wrap my thought around that. Status is more than principle? To me, principle is everything.

The idea that there should be a limit on wealth is in Aristotle, I believe, in that for a good society, there shouldn’t be too great a gap between rich and poor. So it sounds as if Robert Locke and Aristotle would both prefer a return to the pre-Reagan tax rates, when tax rates were high enough so that you didn’t see all this conspicuous wealth around that we can see today.

I should add that Robert Locke’s observations are very pointed and well thought out. I’m not sure I’m convinced though.

An Indian living in the West writes:

He makes valid points but he misses the most fundamental points.

The main defense of great wealth that I can present is that great wealth once acquired frees you from the drudgery of every day work and this time once freed up can be used for pursuits that are otherwise uneconomic. A middle class man is simply incapable of spending vast amounts of time reading great literature or exploring great art because this is a luxury he cannot afford. His greatest limitation is time. When time is in short supply, things that require slow careful labour are ruled out. I would like to read Shakespeare but I don’t get the time to do this. But if I had time, I would certainly read slowly and carefully.

Wealth like intelligence or any other resource can be used constructively or destructively. It all depends on who is using it.

The second point that needs to be made is that the freedom to acquire and build private property lies at the heart of America. I cannot believe that Locke would consider himself a “conservative” of any description if he thinks that this very basic element should be eliminated. America’s founders knew that great wealth could be amassed in a society that protected private property and free enterprise. But they wanted this to be the case for it allowed ambitious men to embark upon great ventures. And it is ultimately what turned America into an industrial behemoth. It was by design.

If people are to be limited from earning more than $200,000 a year, the state will have to use force to forcibly acquire private property because it has exceeded that level. The next step is socialism and from there, we know where this is going. If Robert Locke considers that incomes over $200,000 should be confiscated by the state, then he must find no fault with the nanny states of Europe that swallow some 70 percent of all your earnings (through direct and indirect taxation) and then spend it in unbelievably stupid ways. So the question is: would you prefer that this money be spent in stupid ways by the individual or in stupid ways by the state? My own view is that I would have a bias towards the former rather than latter. What is worse: the corrupting of some individuals or the corrupting of the entire political system of power by ransacking of private property? If you don’t believe me, read this book.

The above example is of Britain but I am sure that France is even worse. Human stupidity does not dissipate if the wealthy are robbed of their money. The stupidity is merely transferred.

Robert Locke replies:

People are rather missing the point. The ONLY point I was trying to make, in my original e-mail, was that megabucks don’t, on average, make people happy. I’ve actually seen this up close now.

I never said the government should take people’s money! Ever. Or anything about going back to high marginal tax rates.

Robert Locke continues:

Does your Indian interlocutor really think the average American with a net worth over $10 million sits around reading Tolstoy all day?

What a joke!

Culture peaks in the top-college educated upper-middle class. Even below that, given the low salaries of most cultural and artistic professionals.

Yes, rich people patronize the arts. But this just means they donate money to museums etc. A perfectly nice thing to do, but you’re dreaming if you think it means they have any greater appreciation of the art itself than the average graduate of, say, Amherst or Columbia.

It is true that a very small number of rich people are serious connoisseurs. They do exist. But they are a tiny percentage of the rich. And they would probably be cultured people even if they weren’t rich.

Indian living in West replies:

All I said was that wealth offers you the opportunity to do this. That is all it does. It does NOT guarantee anything—any more than possessing a High IQ guarantees success in business or any other endeavour.

People with good taste will always be only a small percentage of the population—no matter what society we are talking about. So the absence of American multimillionaires with good taste does not contradict what Im saying.

Lastly, I was just disagreeing with Mr. Locke’s point. I don’t see why he is getting so angry. I wasn’t attacking him personally.

LA replies:

I did think that ILW was misconstruing Mr. Locke’s point when he said:

“The main defense of great wealth that I can present is that great wealth once acquired frees you from the drudgery of every day work and this time once freed up can be used for pursuits that are otherwise uneconomic.”

But Mr. Locke was not saying that wealth is bad for people. He was saying that super-wealth is bad for people. No one needs to be a billionaire to have the leisure to spend time reading good books and pursuing other non-remunerative occupations. All one needs is enough to live on.

ILW continues:

“Does your Indian interlocutor really think the average American with a net worth over $10 million sits around reading Tolstoy all day?”

In hindsight, this was an exceptionally funny comment. The idea of some multimillionaire sitting on his yacht reading Tolstoy is hilarious. But there are oddballs like that too (though they don’t read on their yacht ).

LA replies:

But after all, Tolstoy was a millionaire, and he sat around on his estate all day writing Tolstoy.

ILW writes:

You wrote:

“But Mr. Locke was not saying that wealth is bad for people. He was saying that super-wealth is bad for people. No one needs to be a billionaire to have the leisure to spend time reading good books and pursuing other non-remunerative occupations. All one needs is enough to live on.”

Yes I think you are right. But I think that if that is the point, $200,000 is too small an amount.

Don’t get me wrong. I’m not trying to be funny here. If you really want to spend a life in leisure you need to accumulate a few million well before you are 40. On $200,000 (with current living costs) you can only do this if you are a miser and spend money on little else than food and shelter and save all the rest. With a family, this money can disappear quite fast. Note that someone making $200k a year would, at least in most of Europe, lose more than half that in taxes. Another big chunk disappears in expenses. And if you have children, there are education costs. The government-run schools are usually lousy and private schools are extremely expensive.

Now I think $200,000 a year is good money if you intend to work to the age of 60. But if you want to retire before 40 (which I think is essential if you really want to make progress in an area like literature or art), $200K won’t do it nowadays.

Without rambling too much here, I’d say that there has been so much inflation in the past two decades that what was once an enormous amount of money isn’t any more. Just look at petrol prices, for example.

Mark P. writes:

I think that Locke’s argument misses the point. The whole purpose of allowing within society great personal wealth has nothing to do with happiness. It also has nothing to do with allowing the leisure time to focus on art, literature or science. It is allowed simply because people can produce things of value that are worth more than $200,000 per year. Furthermore, we allow the inheritance of incredible wealth because we recognize that people have the right to spend their money on their children. The fact that such super-wealth has corrosive side-effects is beside the point.

I don’t thing VFR needs to go in the direction of attacking property rights and wealth accumulation within the context of a market economy. Besides, accumulating wealth is a rather benign activity. Would you rather have Warren Buffet applying his talent to overthrowing government or leading revolutions?

Aaron S. writes:

I like Mr. Locke’s post, and agree with most of it. It’s also an enjoyable irony that a man with that surname should deliver a series of thoughts so critical of wealth!

I think he would find David Hume and Adam Smith rather interesting reading, as they both deal with most of the themes he touches on here. Smith in particular is very lucid on the destructive personal effects of the “illusions” necessary for wealth-seeking. This raises an interesting question for genuine conservatives (as opposed to libertarians, right-liberals, neoconservatives, etc.): does the material (and perhaps even artistic and cultural) well-being of a society depend upon a certain degree of personal decadence or vice, at least among some segments of the population?

If the answer is “yes,” then the next question is how much “reverence” of wealth should be fostered—or if the inclination is natural, permitted—and this is no easy matter. Mr. Locke is probably correct that no one really needs more that 200,000 a year. Yet, I’ve often thought that it would be impossible for this particular quiet reactionary to enjoy movies from the 40s on a plasma tv if it weren’t for so many people chasing monetary illusions. In a very real sense, I profit materially and aesthetically from their vice.

I can’t claim to have a satisfactory answer here, though I suspect it lies in some Christian notion of moral responsibility giving a sense and meaning to wealth creation beyond personal fulfillment. Some of the other commenters seem concerned with whether only great wealth provides the leisure time requisite for refinement in taste, thought, etc. (Aristotle’s question) The more pressing question here is whether some people need to chase great wealth in order for more to achieve this refinement. The two groups needn’t be the same.

P.S. We might locate some thoughts on this matter in Republic II-V, but the modern conversation begins with Mandeville’s “Fable of the Bees”—I think Robert Locke might especially find Mandeville’s discussion of “active” and indolent” tempers relevant.

Anna writes:

This rambling has been so enlightening and entertaining.

The world has seen those born to or earning wealth, achieve many things to advance the world. The world has also seen those born to nothing, achieve many things to advance the world.

The world has also seen both groups achieve nothing.

It is individuals that make the difference. Our task, in the middle, it to see that success is rewarded and that food and opportunity are there for all individuals to be part of the game.

Not any easy task.

James P. writes:

ILW says:

A middle class man is simply incapable of spending vast amounts of time reading great literature or exploring great art because this is a luxury he cannot afford. His greatest limitation is time. When time is in short supply, things that require slow careful labour are ruled out. I would like to read Shakespeare but I don’t get the time to do this. But if I had time, I would certainly read slowly and carefully.

I disagree. I am a middle class professional and my time is in short supply. However, serious reading (in my case, history / political science rather than literature), and thinking about what I read, is not ruled out because I make a point of setting aside a couple of hours a day for it. This means there are some things I choose not to do—mainly, I never watch TV and rarely go to the movies—but I feel certain that anyone who really wants to read and think, and has a passion for it, will find the time to do so. In short, you can make the opportunity for serious non-remunerative intellectual pursuits regardless of your income level.

I know a number of “idle rich” folk, who never had to work, and serious mental effort of any kind is simply beyond them. They are not stupid, but they never developed the discipline for serious reading or thinking. They’ve never needed it! They have the means to do anything, but what they want to do is nothing. If you could magically free all the smart people from everyday drudgery, I am not convinced this would significantly increase the amount of “art and literature appreciation” in the world. You’d just have a lot more lotus-eaters.

Charles T. writes:

Mr. Locke’s article raises some very interesting observations. Like Mr. Locke, I have observed much of the unhappiness in the wealthy he speaks about firsthand. I have also seen it in the very poor and the middle class. I realize he is generalizing, but I had no serious objections and some minor disagreements until I read the last line where he states no one should be allowed to make more than $200,000 per year.

At this point I believe Mr. Locke crosses a line I would not be willing to join him in. Who would enforce such a thing? I can think of many socialists and fascists who would love this type of thinking and would probably lower the maximum salary from 200k for their cattle—uh—the working middle class. Limiting what people can earn is a bad idea.

Emily B. writes:

Thanks so much for posting Robert Locke’s “Is great personal wealth good for people”; one of my favorite posts at your site and that is saying a lot. I don’t have much to add, but it means so much to me personally as I find Jesus Christ’s following teaching the hardest to understand: “It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.”

Yet, I know it is true. The majority of very wealthy people I see live unrighteous lives and/or espouse immoral beliefs. The few who do not, well, look at their children. The very best seem to be able to have righteous children, but not grandchildren. I can’t recall seeing a non-royal man who was rich, rich enough for his children and grandchildren to be heirs to a fortune, and have all three generations be righteous, temperate, and humble (I think the people who handle wealth the best are royalty. Perhaps because of the responsibility?). But why? I accept all the Church’s teachings and understand the “why” on all of them, but this puzzle has been the greatest puzzle for me to solve and I have feared I would die before I could have understanding. Mr. Locke’s thoughts go a long ways towards that goal.

Robert Locke writes:

OK, make it $400,000 if you want.

The point stands.

And why do people keep assuming that confiscatory taxation is the necessary implication of what I’m suggesting?

For a start, government is only one of the ways in which society is regulated.

For another, policies that affect pre-tax income differentials are far better than waiting until AFTER the income has been earned and then taxing it.

I am well-aware of the problems associated with high tax rates.

Thucydides writes:

Bob Locke surprises me. The only alternative to leaving the existing distribution of wealth alone is some sort of collective intervention. That can only take place through government or some sort of mob action (the two might not be that different, as government action will only be pandering to mob desires under cover of a spurious majoritarian legitimation). The evils of intervention are worse than the evils that Bob complains of. Contrary to liberalism, government is not a vehicle for the rational pursuit of some ideal state of affairs; it is at best an evil that is necessary because of our flawed character, and one that has become more of an evil as it has expanded in such pursuits. Pace Obama, we don’t need government to start the world anew for us, it would be fine if they could just fill the potholes, etc. Achieving an ideal distribution of wealth is not only beyond government powers, it has been proven to be disastrous to even try. And the goal is incoherent: nobody could ever agree on what the correct distribution would be.

If there is nothing that can be done about it that isn’t worse than the problem, why even bring it up? Some rich people don’t make good use (according to some point of view) of their wealth. So what? Complaints about the distribution of wealth are always the demagogues’ opening door to power, pandering to the envy of the herd to gain power for themselves.

RB writes:

“Would you rather have Warren Buffet applying his talent to overthrowing government or leading revolutions?”

I found the above question quite interesting. I believe that, in fact, Warren Buffet uses his great wealth to support increasing income taxes on middle income people who have not had his good fortune. I also believe that he is a Democrat and is supporting B. Hussein Obama. And he is not, by any means the worst example. Mega billionaire Bill Gates, having made a fortune with a quasi monopoly uses his clout to undermine the country which has been so good to him by flooding it with cheap immigrant techies so he can make even more profit. Then there is the totally despicable George Soros. And, of course, there are the Kennedy, Rockefeller and Bush families who have persistently tried to undermine their country. Add to the above, numerous lesser known “trust fund Trotskyites”, rich Hollywood degenerates and wealthy left wing foundations. A cause of the decline of a nation or a civilization is the loss of any feeling of responsibility or obligation on the part of the ruling elite. In theory, I don’t begrudge the very rich their fortunes, but instance after instance of these “citizens of the world” abusing their great wealth by undermining their own country brings out my late 60s inner Marxist. I’m beginning to believe that we need a progressive wealth (not income) tax starting in increments above $10 million to take their destructive little toys away from them.

LA replies:

I think RB makes an important point. I did some reading last year on the super-endowed grant-making foundations in the U.S. Grant-making foundations exist by virtue of the U.S. tax code which exempts from taxation organzations that give charitable donations intended for the general good. Generally it is liberals who have challenged the existence of foundations, feeling that they are too “conservative” and don’t do enough, while conservatives have tended to defend foundations as great repositories of private wealth used for public purposes, which is an American ideal. But foundations also present a problem from a conservatives perspective. People who have enormous amounts of money, far more than they can ever use for themselves and their relatives, have to do something with all that money. What shall they do with it? What guides them in their choice of what to do with it? What guides them is the moral orthodoxy of our society, which is liberalism.

Vast harm has been done by people who were smart enough to make billions, but whose thinking about society has been under the influence of liberalism, or, more precisely, under the influence of the liberal elite that actually run and manage the foundations and make the decisions about where the money goes.

Terry Morris writes:

Society’s setting an upper limit to the amount of money someone should be able to earn is the exact same thing, in reverse, as setting a lower limit on the amount of income someone should earn, whether we’re talking about a yearly salary, an hourly wage or whatever, is it not? I get the point that people only need enough to live on (and on the other end that they need at least enough to live on), but what incentive beyond independent wealth does a farmer have, for example, for producing enough wheat to feed a hundred thousand people?

Thucydides writes:

Particularly comical is the opposition to estate tax repeal coming from Gates and Buffet. The estate tax is economically inequitable in that it taxes previously taxed money, and damaging in that it dissipates pools of accumulated capital, which are an important economic driver in our low savings economy. It hits small businesses hard, sometimes closing them down. But it is popular among politicians, who mobilize the voters’ worst instincts, in this case envy, in order to blind them. The estate tax works, like Hayek pointed out about progressive taxation, to make voters accept much higher levels of taxation than they otherwise would. “Never mind your tax bill, look how much that rich guy has to pay.” Added to this scam is the politicians’ practice of raising donations on promises of repeal of the estate tax, which somehow never happens.

The comical aspect is that Gates’s and Buffet’s own wealth will not likely ever be subject to estate tax. The super-rich (say estates over $50 million) set up charitable foundations which are exempt from estate tax and escape income taxes as well. Indeed, setting up the foundation produces an immediate huge income tax deduction which can be carried over against other income. These foundations then typically employ the founder’s relatives (Bill Gates’s father works for his foundation), children, and friends in perpetuity at lavish salaries and perks. And whatever the donor’s intent, they are sooner or later captured by professional staff, and set on a leftist course, as was the case with the huge Ford and MacArthur foundations.

Ben W. writes:

Concerning “Is great personal wealth good for people?” Plato makes the argument in “The Republic” that extremes of any kind are inimical to a society.

For those who use the free market argument against Robert Locke, it should be noted that Robert Locke doesn’t believe we have a free market economy.

Vivek G. writes:

Robert Locke draws three conclusions:

1. So wealth doesn’t make the rich happy and it does tend to make them nasty.

2. So why would a sane society revere it?

3. Nobody should earn more than $200,000 / yr.

I agree that beyond a point (one could argue whether it is $X/yr or $Y/yr, but I accept the principle) money can hardly buy happiness. But is it not true that happiness can hardly ever be bought? Though I admit that $X (or $Y) /yr will be needed to keep a lot of that unhappiness at bay which most people dread (like having no money to pay regular bills and so on), and will also afford them reasonable conveniences. I would like to add here that in addition to the wealth one makes, the means which one uses to make the same also matter. All means that are legal may not be moral. And often lust for wealth makes people acquire it by immoral means. May be that’s the purport of Christ’s saying which Emily B. refers to, for immorality can scarcely grant the kingdom of heaven.

Then why should a sane society revere it? A sane, traditional society reveres tenacity; and acquiring wealth by morally admissible means requires great tenacity. One could possibly list a few other such worthy qualities too.

I quite disagree with the third conclusion. I would prefer to rewrite it as “All those who earn more than $200,000 /yr (say $X/yr) need to be aware that the additional money may not buy them any happiness by itself.” And that earning it by immoral means (even if it be legal) exposes them to further dangers (non-traditionalists may disagree with me). And there indeed are people who work towards bringing this awareness to one and all. Further, freedom means freedom to sin, even though God also makes the moral code which holds you responsible for you actions. It may sound contradictory, and it indeed is paradoxical, that God forbids sin, gives the freedom (even freedom to sin) and will nevertheless punish the sinner under the moral law. To me it appears that God granted this freedom because there is something very crucial in freedom. (Though I admit that I haven’t understood this perfectly as yet).

Similarly, there could be many purposes (other than personal happiness) for which one may work with enterprise and end up making more than the stipulated amount. And many such enterprises are necessary for the societal benefit too. So I would refrain from saying that no one should earn more than $X or $Y /yr.

Yago Campos writes from Tokyo:

Everybody is saying how limiting people’s income automatically leads to socialism; but almost every country in the world but the U.S. does that in some way. Scandinavian countries use income tax for that, but that is just one way to do it. Japan, as everybody knows, is a fairly homogeneous country where billionaires are simply not allowed. A manager is simply not paid more than $300.000 a year, and inheritance tax is over 50 percent. There are thousands of ways a government can regulate personal income in a country without outright socialism. Japan of course is mildly socialistic but they don’t allow immigration, explicitly for the sake of national survival, which is more than any Western country can say.

Of course you may say that limiting personal income would affect technological innovation and whatsoever, but what is traditionalism about anyway? We are not supposed to pursue technology for itself, but a better society, isn’t it?

Robert Locke sends an article on money and happiness.

Clark Coleman writes:

The most revealing thing about this discussion, to me, has nothing to do with wealth or income. Rather, it is the umpteenth time that I have witnessed the following:

Person A says that something is not desirable. Person B responds, “So, you are in favor of the government making this illegal?” Person B proceeds to detail all the ill effects that will come from making and enforcing this new law.

It is a sad commentary on the leftist conditioning of our minds over the last century that so many of us assume that government intervention is proposed when government was never mentioned previously. You can no longer simply try to persuade others that something is not desirable, in order to change their attitudes and help spread your insights. No, you must be proposing government coercion.

Even after Robert Locke explicitly replies that he was not proposing government coercion, these kinds of c riticisms continue.

LA replies:

Yes, it is remarkable.

Locke was making most of all a moral argument.

He may have policies to propose as well, but he’s primarily making an argument about the human good.

It’s like with Plato’s Republic. The general view of the Republic is that it is a political program for a totalitarian state in which, for example, children are separated from their parents and raised in state schools. But such political proposals as are presented in the Republic are not what the book is really about. They are merely ways of expressing Plato’s main concern, which is, What is justice, which means, what is the proper ordering of the human soul?

Robert Locke replies:

This just shows that one of the main reasons people are so deferential towards big money in this country is simply that they fear the alternative, which they assume is a confiscatory state.

But:

1) I never espoused confiscatory taxation.

2) Even if I were to espouse government action, it wouldn’t be confiscatory taxation, which only affects after-tax income, with all sorts of bad side effects, rather than fixing the skewed distribution of pre-tax income.

3) People imagine that the skewed distribution of income is somehow not itself a product of government policy. But of course it is.

4) If one prefers one thing simply because of a loathing for the alternative, one should be clear about this fact. We preferred Stalin to Hitler, but (most of us) never forgot he was almost as evil in his own right. It is perfectly coherent to say that Big Government and Big Money are both parasites upon the hard-working middle class.

The two big breakthroughs for me personally, in overcoming the superstitious reverence for wealth which is natural to an American, were:

1) Becoming rich myself, which led me to discover that wealth isn’t even a golden calf. It’s a papier-mache calf spray-painted gold. It just doesn’t have any mystique for me any more.

2) Learning about Japan, which is a successful capitalist country with a fraction of the concentration of wealth America has.

3) Learning about America in the 1950s and 1960s, which had a much lower concentration of wealth and a stronger economy.

Indian living in the West writes:

I have read a lot about Japan but I think the Japanese methods and their ways would never work in the West. I apologise for a long argument to make this point.

First, it is easier to have much lower levels of inequality in a homogeneous country. Japan is, even today, about 99 percent Japanese. It is an anomaly in the West and the fact is that it doesn’t belong in the West because the Japanese do not subscribe to liberal ideas in the way that Westerners do. Robert Locke is right that America had less inequality in the 1950s but this is because America was also more homogeneous. Why does homogeneity matter so much? Because if I am to sacrifice my wealth for the good of the country, I must feel an affinity towards my countrymen. I won’t feel that kind of affinity if the country is so heterogeneous that most people do not share a lot with me. It is not a coincidence that Brazil and India both have some of the greatest inequalities in the world. Being from India I can say with confidence that most rich Indians don’t give a damn about the poor because they differ from them in a thousand ways—caste, religion, language, class etc.—you add distinction upon distinction and you get to a point where the rich feel no affinity for the poor at all. It is interesting that unlike 19th century Western societies, there are very few philanthropic billionaires in India’s industrial boom. In my experience, most rich Indians come from the upper castes and among the upper castes predominantly from the business castes (for those who are students of Manu, Vaishyas). They do not see it their duty to be philanthropic towards the lower castes or Muslims who are disproportionately poor. Politics makes this worse because in India we have very aggressive affirmative action. Many upper caste Hindus who have become rich by the dint of their own hard work think it is perverse that they should give their money away to the poor when the government actively discriminates against their own children in jobs and university admissions. And of course, need I say that no sane Hindu would throw his money away to remove Muslim poverty!

Brazil is similar although the distinctions in Brazil are based on percentage of white ancestry. While I’ve never been to Brazil, in my experience, the well to do Brazilians that I’ve encountered in Europe have tended to be white. Many of them were phenotypically indistinguishable from Italians or Greeks. The poorer Brazilians are darker and the poorest are black. It comes as no surprise that the rich Brazilians feel no affinity for the poor and there is so much inequality. I won’t get into the question of race and IQ which I am sure most of your readers are familiar with.

The reason you have much more inequality in America today is that America is a much more heterogeneous country. And the more heterogeneous it becomes, the more inequality you will have. It is an iron law of nature.

Europe is headed the same way. I have found Northern Europe to be the most interesting case. Socialism has historically worked to some extent in Northern Europe but it cannot in the future because the countries are changing so rapidly that the sense of affinity that one feels towards one’s countrymen is gone. Why should an upper middle class Dane or Dutch want to part with 70 percent of his income so that the money can then be redistributed by the government to Muslim immigrants? Most Northern European liberals I’ve met (actually I’ve never met a serious Northern European conservative) seem utterly incapable of understanding this. Their brains are stuck in a la-la land where the whole world could live happily ever after in peace and harmony under a Scandinavian welfare state. I am more inclined to believe in Elvis sightings on the Moon.

The second reason why Japan can have the kind of society that it does is because Japan’s history is unique, its people are unique—and the kind of system they have built complements that. Before Westerners arrived in Japan, it was a feudal country in the extreme. What the Japanese valued most was loyalty and obedience. Only in a country like Japan could harakiri have become an act of such honour. That, combined with their homogeneity allows the Japanese to make all kinds of laws and conventions which would never work in the West. Even if America could be changed to the way it was in 1950 (or even 1850), America could never function that way. America grew out of an ever expanding frontier in which man took on nature, the elements, savagery and triumphed—as an individual. Yes the community did matter but the communities were built by pioneers. Before Marxists got hold of the university campus and destroyed higher education, American boys grew up on stories of Davy Crockett and other similar Western heroes (it is also no accident that the 1950s which marked the high point of the celebration of Americana also marked the making of some of the best American movies in history (and a disproportionate number among them were Westerns)). Those men were individualists. They would never fit into the kind of society that Japan created. It simply wouldn’t work. And although America has changed a lot, the roots of modern American traits are to be found also in history. You cannot really disentangle the two.

Sorry I’ve rambled so much. I don’t disagree with Robert Locke—wealth beyond a point may have little value. This is perhaps undoubtedly true (although I haven’t reached a stage where I have felt it myself!). So nothing I’ve said alters that fundamental point.

All I can say is that if you despise the kind of vulgar inequalities that now seem to be arising in America, you may have to learn to live with it unless you can turn the clock back a long long way. Diverse countries do not attain equality nor do the rich in a diverse society ever feel a great affinity for their countrymen the way the rich do in homogeneous countries. At the moment, the American rich seem to believe in noblesse oblige towards the other as a matter of status. This will change when America’s transformation into Brazil or Mexico becomes complete. Then such acts of benevolence may not attract the same kind of admiration from the public. They will have wisened up—naturally.

The last point I’d like to make is that once a people have been robbed of their sense of nationhood, all that remains is materialism and hedonistic escapism. This seems to be the rule in the West now. I’ve often met some Europeans (in France and Italy this is not uncommon) who in complain about what their countries are becoming. But if they are successful, they shut this out of their minds. The ruling liberal theocracy has made any such expressions verboten. So they deal with this by not thinking about it and indulging themselves in hedonistic pleasures. Most rich men, from what I’ve seen, seem indistinguishable from children in the way they love their gadgets and other fancy toys. I’ve seen men in their 60s talk endlessly about their Ferraris and their Lamborghinis. I was mistaken when I thought men grew out of that kind of idiocy once they were past their teens. But they don’t! Some would say that the rich were always like that. But this is not true. John D. Rockefeller was by common consent the richest man that ever lived. But he was not a hedonist. He was actually a deeply religious man. Some might think this is a contradiction given his ruthlessness as an industrialist but his religiosity was not a facade. Historical accounts of his friends and close acquaintances prove this to be true.

Robert Locke replies:

I have never said the Japanese system would work in the U.S.

In fact, in my key article on the subject, I emphasized that it wouldn’t.

I’m glad your interlocutor observes that racial diversity undermines equality. The left won’t grasp this in a million years.

The post-’60s left (unlike the Old Left) has never been honest with itself about the fact that if you don’t like capitalist individualism, you need to oppose it with some kind of social solidarity. They talk a nice fantasy tune on solidarity, but relentlessly undermine every kind they come across, from ethnic identity to old-time labor unionism, in the name of an antinomian Me Generation “everything goes” philosophy.

LA replies:

On the last point, I’m reminded of the communitarian idea of Amitai Etzioni. He wanted some kind of common values and authority to hold society together, but, being a modern liberal, seemed to reject every actual system of values and authority by which that could happen.

ILW continues:

I thought I’d make an additional point.

I must confess that when I was growing up I experienced a certain romanticism reading about the 19th century industrial tycoons. The fact that Cornelius Vanderbilt left school at age 11 and became the wealthiest man in the world not through conquest but through business is something that still impresses and utterly astonishes me.

I think men like that don’t do it just for the money. To them there is a certain accomplishment which comes from building an empire. I think the reality is that these were empire builders—Vanderbilt, Carnegie, Rockefeller or Ford and their ilk. Some of that romance has gone as people spend all their lives in front of a computer screen in an air conditioned office. Those guys were, relatively speaking, almost heroic figures—who rolled up their sleeves and got on with the job of building an empire with their bare hands. And nothing fazed them—war, chaos, violence, unions, politicians, nothing.

I don’t think those men were looking to attain a certain amount of money because that money would bring them happiness—any more than Caesar’s conquest of Gaul was meant to bring him “happiness.” You could say that this kind of extreme ambition is a type of insanity and it probably is. But that is what humanity is—it has all these characters and oddballs. Somehow I think that the richness of life would be lost without men like that. Perhaps I live in the past too much!

M. Jose writes:

Robert Locke finds it strange that people think he is arguing for heavy levels of taxation.

It is very easy to interpret, “So wealth doesn’t make the rich happy and it does tend to make them nasty. So why would a sane society revere it? Nobody should earn more than $200,000 / yr.”, as meaning, “No one should be allowed to earn more than $200,000 / yr.”

He would have done better to have said, “I don’t think anyone needs to earn more than $200,000 a year,” or, “It’s not a good idea to try to earn more than $200,000 a year.”

James P. writes:

Yago Campos says,

“Everybody is saying how limiting people’s income automatically leads to socialism; but almost every country in the world but the U.S. does that in some way. Scandinavian countries use income tax for that, but that is just one way to do it. Japan, as everybody knows, is a fairly homogeneous country where billionaires are simply not allowed. A manager is simply not paid more than $300.000 a year, and inheritance tax is over 50 percent. There are thousands of ways a government can regulate personal income in a country without outright socialism. Japan of course is mildly socialistic but they don’t allow immigration, explicitly for the sake of national survival, which is more than any Western country can say.”

Does Yago know that he is making “everybody’s” argument for them? Almost every country in the world is socialist, by any reasonable definition. Certainly the countries he mentions here are socialist—the Scandinavian nations and Japan. Japan is not “mildly” socialistic, it is extremely socialistic, though in a characteristic East Asian fashion (one that works), not a Soviet / East European fashion (that doesn’t work). It is a one-party state with “public” (i.e. bureaucratic) control over the commanding heights of economic and financial policy. Japanese egalitarianism did not emerge by accident—rather, expropriation of private wealth after WW2 was seen (and still is seen) as necessary to enable the state to guide the Japanese economic system. What is that but socialism? Looking around the world, it is clear that limiting people’s income and socialist regimes go hand-in-hand!

a Vivek G. writes:

I recall an old saying: “If wealth is lost nothing is lost. If health is lost something is lost. If character is lost everything is lost.”

So, in a traditional outlook, it is not worth making money compromising character and/or health. Now the question is, even in the absence of such a compromise, is it worth making a lot of money?

I have always felt that when we learn about what money can buy, it is also very important to learn about what money cannot buy; so that one does not have unreasonable expectations from money. And often it is a matter of great surprise to many people when they discover that there indeed are things that money can not buy. Mr. Locke beautifully summarized it in his point “Becoming rich myself … any mystique for me any more.”

One soon realizes (I do and I think most traditionalists do, and I am aware that I am over-simplifying a bit) that beyond hunger-food; tiredness-sleep type of gratification, pleasure in life comes from human relationships. And, in a true sense, human relationships can hardly be bought. So money or wealth are surely irrelevant in this sphere.

I wonder if racial diversity undermines equality, though I am not a leftist at all. However, I often think that large scale immigration leads to immorality, possibly because away from their traditional set-up immigrants may tend to compromise on moral values. I wonder if there are any statistics which show that a disproportionately large percentage of illegal activities are committed by immigrants. Why immigrants should have greater proclivity for illegal / immoral behaviour is still unclear to me though. And I am not saying this only regarding U.S.

Yago Campos writes:

I’m not trying to defend the Japanese system as workable in America, of course Japan is a unique country with a unique people and that couldn’t work in a white society. But living in Japan you know that basic freedoms are granted, speech and enterprise is totally free; that by itself means it is not a socialist society. It’s just not comparable with the tyranny of modern Europe and its hate speech laws. Of course the government directs the economic system, but I’d rather have this than have the corporations direct the political system. Massive immigration is unthinkable, and homosexuals are not marrying here, period. James says: “Looking around the world, it is clear that limiting people’s income and socialist regimes go hand-in-hand!” One could also say that looking around the world, it is clear that not limiting people’s income and suicidal liberalism go hand-in-hand. I’d rather have soft-socialism than Islam.

Robert B. writes:

Your readers are confusing old money behavior with new money. They are culturally distinct from one another—and I do know from which I speak—my paternal grandmother was old money in 1892, as was her mother. Her line came into this nation before it was a nation. They are of very old English stock (Tilden)—with towns named after them on the eastern seaboard. My grandmother once said to me, “I would rather be newly poor than newly rich,” and my life’s observations are that she was correct in this. I will explain why.

New money goes to college to learn a trade—MBAs, CPAs, etc. Old money goes to college to become educated and worldly. Their education, from birth, is one of acculturation. The old families follow traditions, mostly English, that have been handed down throughout the generations. They believe in “good breeding” and were the first recyclers known to the planet—which is to say, we enjoy handing down heirlooms of all kinds and we enjoy using them in our everyday life. I was sent off to college with sterling silver, Minton china and 175 year old furniture. I lived alone in my own apartment, but I did join a frat—the same one my father belonged to. I did not pick a major that would garner me a job, I chose the oldest of studies because I enjoy philosophy, I chose Political Science. I do spend most of my free time reading—I have read all of the classics as have my children. I am a patron of the arts, but I also attend. I support my local opera and symphony, as do my friends.

Like my ancestors, I eat with my family each and every night. We eat from china and silver which has been handed down, we eat on linen which was handed down—though there is now new items to replace those that have been retired. At the dinner table we discuss the days events, both personal and in a much broader sense. We discuss politics and current events. Dinner requires an hour on weekdays, an hour and half on weekends. Dinner parties require three hours and guests are mixed so as to have a broad discussion available. It is assumed that everyone is educated enough to keep up with the conversation. In the winter, we sit by the fire at night in the library and we read while listening to music. Ostentatiousness is considered bad manners and poor taste. It is a sure sign that one is of nouveau riche stock. They say it takes three generations to acquire the manners and behaviorism of that rarified atmosphere that old money reputedly attains to. I say it takes one-hundred years. It is long enough were a person no longer has anything to prove with regards to money (1st generation), long enough not to feel guilty for having what others do not (second and third generation) and long enough to feel that one is blessed and deserving of this wealth—entitled to it in a righteous way. By that time, the manners, speech, and scent have arrived as a given, a way of life one grows up with. One has long since gone past that point of conspicuous consumption that screams “look at me.” One now looks down on people who buy the shiny baubles. Of course, old money is the only real money in that fortunes come and go, but only the best keep it for five generations or more. Old money also understands that a person can, indeed, have too much. If you have enough forever, then what, exactly, is the point in spending your life pursuing more? Pursuing more is a sign of an ill-bred person. One should allow the needy to pursue that for you, thus giving them a job and allowing you to spend your time doing worthwhile things. Besides, in a world where everyone has money, money ceases to have meaning—it then comes to who and what you are as a person. Intellect is always greatly valued, as is the ability to recognize and appreciate true quality, artistic ability and craftsmanship.

Posted by Lawrence Auster at June 07, 2008 04:58 PM | Send