Monthly Archives: October 2012
About a week ago, Charlie Stross wrote a post musing about the declining marginal utility of material possessions and the question of why billionaires would want to chase after even greater fortunes. He thinks that some of this behaviour is because being super-rich allows you to produce new goods which are not normally available for purchase at any price, i.e. create new inclusive club goods such as novel medical treatments. Interesting, but a bit charitable.
I’d speculate that much of the pursuit of ultra-wealth is motivated by status concerns, as at any point in the income distribution the income gap between oneself and those acquaintances one knows who are wealthier is likely to be greater than the gap between oneself and those acquaintances who are less wealthy. Even billions might seem small potatoes depending on the company one keeps. The second major reason is dynasty-building. Stross’s account is too individualistic. Whenever the wealthy have had the opportunity to bequeath their wealth as an unearned patrimony to their offspring they have done so, such as when British industrialists did their best to turn themselves into a landed gentry. Profits are often turned into permanent rent-producing assets as soon as they can be. Hence the complex systems of trust-funds, offshore bank accounts, family limited liability partnerships and so on employed by people like Tony Blair. There might be limits to what super-wealth can buy you, but it can increase the chances that your descendants will remain at the top of the heap. In other words, the goal of many capitalists is feudalism.