The Sadness of the Billionaire

michael-bloomberg-one-percentMicahel Lewis revisits the problem of the extremely wealthy over at The New Republic. Money may not be able to buy you happiness after all, what it can do is corrupt your soul. This is the dark side that’s been seen since the times of the prophets. Or I suppose, since Lord Acton spoke about power. In the end it is all the same: the intoxication of wealth and its freedom reduces the sense of mutual obligation that grants our lives value.

What makes us better off?

Earlier we discussed  an article (maybe not) in the WSJ about how we are all doing better because we have such cool things as flat screen TVs and the like.  In any case, today there are letters including one from John Tiemstra of Grand  Rapids.  Instead of the usual defense and/or cheerleading, they offer some interesting perspectives to how we understand material wealth.

later comment: The big problem in the original essay was always the easy parallel between consumption and wealth: I am rich because of what I purchase. This rather misses the point that wealth means the resources to see one’s way, whatever the way is. Money is as they say a way of keeping score, it is also implicitly, a measure of power. This latter is the great distorting force that needs to be constrained. the Founders had it right that one could not constrain the strong man directly, but only through a web of competing institutions; constraint is built by the web not by the mandate.

On the Rich

[Rev. Daryl DeKlerk wrote an essay in The Banner on the Occupy movement, ending with a celebration of the rich, an argument that they have earned their wealth. Well maybe yes, but then again… ]

I’m also one of those who would be cautious about how we deal with social and economic issues. This is the territory for wisdom and prudence.

Rev. DeKlerk does a fine job highlighting changes in global economics, and had he left it there I would be rather edified. It’s when he moves to the domestic front that he gets in trouble. There are three areas where I get cautious.

First, biblically: Scripture (and experience) does not allow us to take an uncritical eye on the rich or the poor. Whether we look at Proverbs, James, Luke or the prophets we encounter cautions about wealth and the spiritual dangers that arise from riches. The human, fallen nature of ours makes it easy to self-deal and look only after ourselves and our families. This note was missing in Rev. DeKlerk’s essay.

Second, economically: the treatment of the rich, the notion that they “earned it” would benefit from greater study of the structure of wealth. While some grow wealthy by leading and building teams in entrepreneurial organizations, other paths include the financial sector (a segment that has expanded substantially in the US economy in the past generation), natural resources, real estate, and inheritance.

As to earning it, as late as the mid-70s the chairman of Herman Miller was limited to a multiplier of 35 — his income was to be no larger than 35 times that of the average wage on the floor. And that company was not alone. Today, the multiplier is on the order of 300 – 400: has the executive suite become that smarter in this past generation?

Finally, Rev. DeKlerk runs into the real differences between the United States and Canada. The two nations have quite different tax structures, and differing political approaches to their tax systems. Thus to say we shouldn’t raise taxes will mean one thing where there’s a 13% GST, say, but quite another where such phrases have a particular political and partisan cast.

The question that he has stumbled into is that of what makes a tax rate just — this is an interesting topic, but I am not sure it is one for a general publication such as The Banner.