Monday, July 09, 2007

The Rich

There is something in the zeitgeist. The middle classes in Britain are stirring in their resentment of the rise of the super-wealthy: Russian oligarchs, Asian industrialists, hedge fund wizards, private-equity privateers, and London’s growing collection of non-dom tax-refugees.

These UHNWIs have helped push house prices in and around London off the charts; they have lead to a rise in inflation in the luxury goods market and have generally pissed off the chattering classes.

I have a couple of things to say about this. One is that this affects the London-based middle classes more than any other group, and has little or no effect on poor people like myself.

It is infuriating to hear the likes of Polly Toynbee complain about the super-wealthy, as if she wasn’t extremely well-paid and comfortable, holding a prestigious job and making influential friends.

The other point is the old problem with taxing the rich: there are many people who object to “super taxes” on the extremely wealthy (people with incomes in excess of one million pounds a year) not because they are wealthy, but because they one day hope to be wealthy. I count myself amongst these people.

I have always felt slightly guilty about this desire. One point raised in a recent article in The Guardian is that Adam Smith, according to what he wrote in Wealth of Nations (apparently) would disapprove of our current public-limited-corporation model of capitalism. Smith argued that limited-liability laws would mean that owners of businesses would behave in a less responsible fashion to their workers, investors and creditors.

I disagree: if you set up a company you want it to succeed, but you might not want to take the risk if you’re liable for the debts if the company folds (despite your best efforts). I think irresponsible PLCs and faceless shareholders are one of those nasty side-effects of living in a free and pleasant civilization (other examples being rampant consumerism and environmental degradation). You can't have social justice without freedom, and that includes the economic freedom and equality of opportunity offered by public limited companies.

When I read books like Richistan, Rich Britain, and The Rich: A New Study of the Species I am struck by how resentful the middle classes in general and the chattering classes in particular have become to the new super-rich. These books are full of middle class types (like I wish I was), many of them journalists, whining about how much other people have and how pissed off they are about it.

The problem is we shouldn't be indulging in jealousy-induced rants about a minority of ostentatiously wealthy Russians or sly usurers, we should be demanding that we, all of us, haul those below us in the income ladder up, and work to carry ourselves up.

We need to realise that our aim as a civilization is to make a billionaire lifestyle available to all. This may sound unbelievably optimistic, but how would be respond if you told Epicurus about aeroplanes, the Internet, vaccination, mass-education, plastic, the NHS, cars, satellites, nuclear reactors and cheap clothes? If you were not able to provide evidence of these things he would have dismissed them as the fevered dream of a madman.

This is what we have built: a world were many more are comfortable than would have been possible in the past. Ours is a world that supports six and a half billion people, and the resultant beauty and rich diversity of human experience and achievement that this number entails.

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