Economics of Liberty Free Style Opinions Philosophy

If I Were a Rich Man: What it Means to Be Rich

by Aya Katz

Have you ever dreamed of being rich? What were those dreams like? What does being rich mean to you? What would you do if you were rich?

Would it surprise you to know that there is no universally agreed upon definition of wealth, and that what it means to be rich is a very personal thing? According to the Wikipedia: “The concept of wealth is of great importance in economics, especially development economics, yet the meaning of wealth is not straightforward and there is no universally agreed-upon definition.”

To some, wealth is measured in currency. To others in land or cattle. To some, wealthy people are those with a relatively high income. To others, it is net worth that matters. After all, if you own enough to live on all your life and several more lives in the future, who needs income? To some, wealth simply implies controlling the assets belonging to others. For them, wealth is the ability to consume on a large scale while not claiming any ownership or income.

To some, wealth is relative to what other people have. The wealthy are those who have the highest income or the most assets, no matter how little that really amounts to. In a poor country, the wealthy may be those who have enough to eat and a roof over their heads. To others, wealth is absolute, so that you might be a middle or lower class member of a wealthy nation, and even though you have no more than the average person in your country, you have more than enough to eat and plenty of gadgets and space and freedom to make decisions about your life.

These definitions clash. They are not mutually consistent. When demagogues tell us to loot the wealthy, many of us with modest assets and non-existent income get nervous, because we feel wealthy! Do they mean us? we ask ourselves.

What does being rich mean to you? What would you do if you were rich? Do you think that being rich is something to be ashamed of?

And most important of all, would being rich in fact be as good a thing as we imagine it to be?

What passes for wealth these days is often just paper Image Credit:: Wikipedia

Wealth as Responsibility

I think that in some sense, to each of us that elusive dream of wealth is a little like a very small child’s dream of what it would be like to be a grown up. When we are little, the thing we see as the greatest advantage of adults is their ability to do as they like. Grown ups don’t have to ask permission. They make their own decisions. They have lots and lots of money and they buy whatever they want to.

Because the freedom of a small child is so restricted, because everyone is bigger and stronger, because a child is spared most of the heart-breaking decisions that adults have to make every day, a toddler or preschooler might get the impression that the life of an adult is mostly a matter of gratifying every possible whim. As we get older, we see the other side of adulthood, the part that involves taking responsibility and exercising self-restraint. We learn that being a grownup is often about not doing what you want. Sometimes it is about doing what you would rather not do.

Is it possible that if we were actually wealthy (by whatever our own definition of wealth might be) we would never allow ourselves to do the things we dream of doing now?

 

Wealth as Maturity

To have wealth and to keep it requires a certain level of maturity. Having money doesn’t make people wealthy, as many lottery winners have learned to their detriment. When someone unprepared for the responsibility of handling money comes into a lot of it, the money is soon squandered, and the person who had it is often no better off than before, and sometimes a great deal worse off.

http://www.dace.co.uk/proportion_child_2.htm
http://www.dace.co.uk/proportion_child_2.htm

To assume that a wealthy person is just like any other person, only with more money, is to mistake size with maturity. Some babies are born very large. Others are born small. But it is not their size that determines how mature they are. To estimate who is an adult and who is a child, we have to look at the proportions, not the absolute size. A six foot tall baby is still a baby. An adult who only weighs eighty pounds is still an adult. Any artist knows that it’s the proportions that betray real maturity.

Image Credit: http://www.dace.co.uk/proportion_child_2.htm
Babies have an unusually large head and an underdeveloped body Image Credit: http://www.dace.co.uk/proportion_child_2.htm

Fetuses are parasites who prey on the host mother. Babies are dependents who consume but do not produce. As children mature, they are able to do more and more for themselves, until eventually they arrive at a point when they begin to support their own weight and consume an amount equal to that which they produce. To be an adult capable of reproducing, you have to do more than that. You need to produce more than you consume, so that you can support dependents who are unable to support themselves.

The proportions of a child are the proportions of a consumer. The proportions of an adult are those of a producer.

In economic terms, what this means is that an adult is someone who has finished growing and is not always engaged in consumption. When we start earning, our concern is that we be able to feed ourselves. This concern never goes away, of course, but as maturity sets in, less time and energy is spent on getting and using, and more is spent on conserving, protecting and maintaining what you already have.

An immature economy, like a small child, is concerned only with growth. But when maturity sets in, growth ceases, and a period of relative stability sets in. Nobody keeps growing indefinitely. A really wealthy person is not one constantly engaged in making more money. A wealthy person is one concerned with maintaining the economic status quo for himself and his dependents.

I wouldn’t have to work hard — Yubba Dibby Dum

Many of our ideas of what it would be like to be wealthy fail to factor in the maturity of an adult into having a great deal of power. It is like the fantasy of a child about what he would do if given unlimited wealth and set free in candy store.

Take the lyrics to the song “If Were a Rich a Man”. Don’t they represent some of our more naive dreams of what having wealth would mean? Is it true that the rich don’t work hard? Or are they workaholics who got rich by working very hard? And, anyway, what would we do with our time, if we didn’t have to work hard? Wouldn’t we get bored?

Complicating the question is the fact that “work” like “wealth” means different things to different people. Is work doing something that you hate? Or is it just being engaged in productive effort?

I’d build a big tall house with rooms by the dozen, right in the middle of the town!

We’d build a big, tall house with rooms by the dozen right in the middle of the town? Right in the middle of the town?! Why? Do you know the cost of real estate in urban areas? Why pay that much when you could do more for less out in the countryside? Consider the pollution, the zoning regulations, the overcrowding and the crime? Why do people live in cities? Isn’t it because they can’t make it out there on their own and they want someone to give them a job? If you didn’t need a job, why would you live in the city?

To make a big impression on all your friends? How mature is that?

I’d fill my yard with chicks and turkeys and geese, sqwacking merrily as they can

Okay, now it’s very nice to fill your yard with chicks and turkeys and geese and to listen to them sqwacking merrily as they can. But, aren’t there ordinances that would keep you from doing this right in the middle of the town?

The lyrics to “If I were a Rich Man” are amusing, precisely because that’s what a poor man might dream that a rich man would do. But a real rich man would in all probability not do that at all.

The wealthy avoid ostentation. They don’t want to make a display of their wealth that will cause envy. It’s only the nouveau riche who are known for that sort of thing.

The most important men in town would come to fawn on me

Do the most important men come to call on the wealthy, just because they are wealthy? Or do the wealthy have to hire lobbyists to influence the most important men in town?

Wealth and power may be closely allied, but having money does not automatically give you power, and the most powerful men are rarely the most wealthy. The wealthy have much to fear from demagogues. It’s whoever appeals to the people that has the most power.

And I’d discuss the holy books with the learned men seven hours every day

Whether one has dreams of being a scholar or a scientist, one finds that the learned men are not easily influenced by money. The wealthy get their names placed on endowments and university buildings and funded chairs, but academicians rarely allow the wealthy to set the curriculum or make a contribution to knowledge. Being wealthy does not always give one a voice.

Pressures on the Wealthy in Today’s Political Climate

Surprisingly, many of today’s “rich” appear to behave quite a lot like someone fulfilling an immature dream of what wealth would be like. They take risks to acquire wealth, and then they keep taking the same sorts of risks in order to maintain that wealth. (See the Dvorak story as an example.)

While acquiring wealth requires one to take risks and to gamble, keeping wealth requires much more cautious behavior. In the same way that risk taking diminishes as we mature, a wealthy person is less likely to engage in economically risky behavior. At least, that would be true, absent the sorts of government interventions that are meant to encourage unlimited growth.

© 2010, 2016 Aya Katz

Related posts