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Wealth

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Oh to be rich, so I can do all those things I always dreamed of...

 

This section is about the effect of wealth on the individual, and society in general.

 

 

Many people think that they could do so much more if they were wealthy. But consider this. What type of person becomes wealthy? How does being wealthy affect us mentally, or is it in fact the reverse - that a certain outlook on life promotes riches? Some of the super-wealthy have now become known colloquially as the Feral Rich. This article explores their effect on themselves and the world.

First, a tongue-in-cheek video. Join Brian Dowling on a Fiscal Safari tracking the feral rich. An invasive but rarely seen species, the feral super-rich leave their mark wherever they go. From New Internationalist Magazine:

Download video: MP4 format | Ogg format | WebM format

 

Introduction

Today, wealth is mostly of the manufactured kind (the Nouveau riche), though there are still some hereditary rich (Old Money) families in many Western countries. Old Money often takes the form of aristocracy, though having aristocratic connections today certainly does not necessarily constitute having money. Some of the aristocracy are not well off by today's standards, though whether this is due to the high running costs of land, estates, and large residences being beyond their current means is debatable.

For most today to "make it big" takes hard work, a certain attitude, good contacts, and perhaps cutting corners to make sure the wealth gained stays with the individual or group, rather than allowing it to get dispersed amongst others, for example into legitimate tax collecting authorities.

Unfortunately, many business dealings today require tactics that may lead to fostering an attitude of privilege, or as in another arena the same mindset is termed "Manifest Destiny". This short phrase popularly refers to a population in a country thinking that they have the God-given right to carry out their actions (God is on their side). The term Manifest Destiny was originally used in reference to wars, but is also used today in the economic sphere as justifying decisions that might affect the lives of hundreds, thousands, or millions of people.

This concept in some sections of the community may allow them to sleep easy by self reminders that their actions are for the good of all, or even that God ordained their actions (if they actually believe in a Creator) to justify often huge salaries, along with actions that many might regard as underhand or dubious. It is possible for them to do this by turning a blind eye to the consequences of their actions. Eventually as noted, this leads to a sense of privilege.

How does this affect the actions of the Feral Rich in relation to themselves and others? There are now studies to show that this category of people act in ways different from those that are less privileged. Typically, they respond in ways that would be considered sub-optimal by large sections of the population.

The information below is pulled from various sources listed after the conclusion, where I have given links to the original articles that also contain links to studies etc that may be of interest. There are also links within the text to other related articles.

 

The situation as it is now:

In much of the world today, time is running out in what is becoming known as the "hourglass economy". This refers to the huge imbalances in wealth we currently have that is distributed mostly between the very rich and less so, those at the bottom. The middle class is being squeezed out of existence to create a bipolar society of the very rich and the workers that serve them.

Known as HNWIs and UHNWIs – (High Net Worth Individuals and Ultra High Net Worth Individuals), the very rich however, are those that are benefitting most from the current dynamics. While most of the world population suffers in ever increasing poverty, the seriously moneyed are becoming ever more wealthy and more savage in their tactics in obtaining it. The rich are using their ever increasing power to divert more of the flow of the worlds resources into their own bank accounts and interests. As most of the world is finding it ever harder to survive, more and more wealth is flowing into the top of the hourglass (Wealth Untamed).

For the HNWIs life just gets better and better. Their fortunes just keep rising. For example, during 2012, the 400 richest Americans saw their wealth grow by $200 billion, which is enough to provide every student in the US with free education. While during the same period in the UK, the 1,000 richest Britons have seen their fortunes swell to $667 billion that constitutes almost a 5% increase over the previous year. The situation in India was even worse in 2012 where the ultra-rich increased by 30 per cent. As Sri Ram Khanna of the Delhi School of Economics said: "The better-offs continue to prosper in a slowdown and are largely immune to it… The lower your income, the more you are at risk. It is a global phenomenon" (The Feral Rich).

 

The Origins of Opulence

It is estimated that approximately one-third inherited their wealth, and the other two-thirds are described as "Self Made" or "New Money". Many are graduates in Maths or those who have gone into IT and Software development. A common factor is that many of these people come from already comfortable backgrounds, and/or have friends in high places, and are rarely true rags-to-riches stories.

An example is the oligarchs from the former Soviet Union that were close to political power at the time of transition to a supposedly free market economy. Many took advantage of the sale of public companies and utilities during that period. Another case in point is the growing array of the super-rich Chinese who are frequently the offspring of Communist Party officials. A common scenario is for many of these super-rich to augment their wealth using the services of hedge fund operators and private equity wizards that are known to plunder resources intended for the average person, such as pension funds.

The origins of the present situation goes back to the 1980's. On both sides of the Atlantic, Conservative governments crippled the power of the unions, dismantled regulation, and privatized state utilities such as British Rail in the UK, and also created new business opportunities that were pounced on by opportunists. It was also at this point that top executive pay started to outstrip ordinary wages by a large measure.

Plutocrats achieved this by the erosion of union power, while trans-national corporations cut through international barriers by often using cheaper, usually non-unionised labour. This meant that profit margins grew rapidly that benefitted their shareholders alongside the business owners. Many corporations also found loopholes that enabled them to avoid tax, while governments aided high earners by savage cuts in the higher rates of income tax.

However, one of the most important factors was the de-regulation of the financial markets that was initially implemented in New York and London. This caused financial sector wages to hit the roof, while at the same time excessive bonuses were paid out. The upshot of this was that (during the 2008 financial crisis), the political response was to cut public spending affecting the majority of the population, while leaving those who were the root cause virtually unscathed. As an example from the UK, the richest households were $561,000 better off as a result of the Bank of England "Quantative Easing Program", while the average increase was just $1,900 (The Feral Rich. Wealth Untamed).

 

How the behaviour patterns of the elite came about

George Monbiot in his interesting article entitled "Another Country" offers some thoughts on how those in power came to retain their influence over large swathes of the population.

He says of his education:

"My second boarding school was a kinder, more liberal place. But we remained as detached from the rest of society as Carthusian monks. The world, when we were released into it, was unrecognisable. It bore no relationship to our learning or experience."

He goes on to say that he suffered "cognitive dissonance" due to the reality of the world outside being at odds with his education. He says that he then began to create his own reality that was either: "shored up by selectivity and denial, or (if you have power) you try to bend the world to fit the shape it takes in your mind".

This follows my own experience of state education that is at odds with real world requirements, and does not enable the individual to find that for which they are best suited in life.

Monbiot goes on to say that his understanding of the situation in the US is not that different. I can imagine that it is the same in most countries.

I can but quote him once again:

"Our own ruling caste, schooled separately, brought up to believe in justifying fairytales, lives in a world of its own, from which it can project power without understanding or even noticing the consequences. A removal from the life of the rest of the nation is no barrier to the desire to dominate it. In fact it appears to be associated with a powerful sense of entitlement.

So if you have wondered how the current government can blithely engage in the wholesale transfer of wealth from the poor to the rich, how its front bench can rock with laughter as it truncates the livelihoods of the poorest people of this country, why it commits troops to ever more pointless post-colonial wars, here, I think, is part of the answer.

Many of those who govern us do not in their hearts belong here. They belong to a different culture, a different world, which knows as little of its own acts as it knows of those who suffer them."

 

The Sense of Entitlement

Urvashi Butalia in India wrote a very interesting article in New Internationalist entitled: "India’s elites have a ferocious sense of entitlement". To give some background, she says her office is located in an urban village in the heart of Delhi that was originally surrounded by fields. Now it is an area of apartment blocks and shopping malls. However there is still a strong sense of community.

Until about a year ago, in the evening, houses in Shahpur Jat would empty as people spilled out on to the narrow streets where a village market was set up, from which fresh vegetables, fruit, fish and many other items could be purchased.

She recalls that it was about 6:00 pm one evening:

"When along came a large SUV, driven by a young and obviously wealthy man. He honked loudly for people to get out of his way; no-one really bothered. He tried again, he leaned out of the car and shouted, he revved up his car. No effect: the cart standing nearby was doing brisk business, another one went past and gently grazed his car. Suddenly, before anyone could realize what was happening, this young man leapt out, caught hold of the cart laden-with-onions standing in front of his car, tipped it over, spilling its contents on to the road, lifted the heavy metal scales and hurled them at the vendor, who just managed to duck and escape being badly injured. People scurried away, the young man stalked off, climbed unhurriedly into his car and drove off. Since that day, the village market has disappeared, the people are too frightened to come on to the road, children don’t play there and cars can now drive freely down it."

She says it isn't about road rage, but that:

"It’s about being rich, and the privilege, callousness and arrogance that comes with it."

And further:

"Indeed, the ferocious sense of entitlement that the rich carry with them at all times has also helped to legitimize so many inequalities in India. Take, for example, a simple urban phenomenon: parks within the city. These are the places where poor people can hang out, do nothing sometimes, and where the homeless often find a bed. But the assumption seems to be that our public parks are only meant for the rich, and so the poor are often pushed out and denied entry."

 

How entitlement breeds wrong thinking

Nestlé Chairman Peter Brabeck in an astonishing interview for the documentary "We Feed the World" in this blog: Nestlé chairman says water is not a human right, says access to water isn’t a human right. He also downplays the idea that nature is benevolent or good, and offers the idea that humanities' ability to resist nature is a good thing. He also puts forward the idea that geneticially modified food is better, and attacks organic agriculture. It might be noted here that Nestlé is the world’s largest bottler of water.

Brabeck's claim that water is the most important raw material in the world is substantially correct. However he believes (though his views are conditioned by his role in the Nestlé company) that privatization is the best way to ensure fair distribution.

Brabeck also believes the ultimate social responsibility of a Chairman such as himself is to make as much profit as possible, so that more people will have access to jobs. He also states that we should all be working longer and harder.

Urvashi Butalia again in: "India’s elites have a ferocious sense of entitlement" makes the point that there is also a particular way in which the rich adopt the moral high ground as Brabeck has done above. She gives an example of three poor Dalit boys that accidentally caused a minor blaze in a local Community Center at which they were employed. The Community Leader pleaded with the Center Manager to let them go with just a warning, but was told in no uncertain terms: "No, you can’t be soft on these people, they have to be punished, else they will never learn." It is likely these three boys lost their jobs, and it is likely that they were also the only earning members in their families.

 

Why the rich collect wealth

The March 2013 Forbes magazine carried an article on Prince Alweed. He was apparently nearly in tears when Forbes valued his net worth at about $7 billion less than he had judged it to be. The researcher responsible for calculating his wealth in 2006 wrote: “When Forbes estimated that the prince was actually worth $7 billion less than he said he was, he called me at home the day after the list was released, sounding nearly in tears. ‘What do you want?’ he pleaded, offering up his private banker in Switzerland. ‘Tell me what you need."

Bob Diamond, a former chief executive of Barclays Bank in the UK said: “I never did anything for money. I never set money as a goal. It was a result.” In essence, he states that it is the power, prestige and sense of purpose that drives him, not the salary. Others of his ilk such as the motor racing magnate Bernie Ecclestone, and former chief executive of Shell, Jeroen van der Veer say the same. The very rich appear to value relative income most. The politics of envy is a major factor amongst the very rich.

Unfortunately, due to the insatiable desire for wealth, the social contract is reconfigured, the welfare state is dismantled, and so that the rich can pay less tax, essential services are cut. This is compounded today by governments that have no vision except continued economic growth. This lack of vision is eating away at the very fabric of society in a world of dwindling economic resources.

Robert and Edward Skidelsky note in their book: How Much is Enough? that the nations with the greatest inequality, yet have the longest working hours in the OECD graph they published, are the US, UK and Italy. Of note they might also have added that they are also the three with the lowest levels of social mobility.

 

How the rich maintain wealth

Surprisingly (or not), many of the rich do not actually feel wealthy, so says George Monbiot in his extensive article entitled: "Secrets of the rich". His article lays out extensive double dealing and underhand tactics carried out in the upper echleons that are used to maintain their status. I recommend following the above link for further information.

 

The Meat of the Matter

Urvashi Butalia in her article "India’s elites have a ferocious sense of entitlement" goes on to say:

"Who could study the rich? Where does this kind of behaviour come from? You’d think if people had more than they need, they would be generous about it, and would see, reflecting on themselves, that others might want to have more as well. Not so. Until recently, every time I asked myself this question, I wondered if I was just being prejudiced, or imagining things. And then I read about the experiments carried out in the US by researchers Michael Kraus, Dacher Keltner, Paul Piff and others about what wealth does to people socially and psychologically – their conclusions are telling."

Luckily science has come to her aid. Scientists in the US have been investigating how access to riches affects the ways it affects personality and behaviour. It turns out that not only are their results consistent, but it shows that the rich are indeed different, but not in a good way. Their culture makes them less empathetic, less altruistic and generally more selfish.

Dacher Keltner, Professor of Psychology at the University of California, Berkeley says: "We have done 12 separate studies measuring empathy in every way imaginable... and it’s the same story..." (1)

For example, richer people are poorer at deciphering emotion from a photo. They are also more likely to check cell phones, doodle, avoid eye contact in video recordings made of them than less privileged people, who make eye contact and nod their heads more often, thus signalling engagement. A further test showed that when poorer people were awarding points that represented money, they frequently gave away more than richer people.

The brain records and responds to emotional inputs partly via the vagus nerve. Keltner studied the activity of this nerve, and the degree of response of different parties. Keltner has found that those from poorer backgrounds experience more intense activation of the nerve when for example, they are exposed to pictures of starving children. In other words their vagus nerve becomes more active than those of the rich.

Jennifer Stellar, one of Keltner's students measured heart rate in a similar experiment. The heart rate slows with feelings of compassion. However, unlike poorer students, the heart rates of the richest students did not change when they viewed pictures of children with cancer. "They are just not attuned to it" Stellar told the New York Magazine (2).

Paul Piff, another University of California researcher, published a paper in 2012 entitled "Higher Social Class Predicts Increased Unethical Behaviour". From his experiments using quizzes, online games, questionnaires, in-lab manipulations and field studies, he found that living higher up on the socio-economic ladder makes people less ethical, more selfish, more insular and less compassionate.

In another experiment he showed that rich participants, when placed in a room with a bowl of candy meant for children, the rich were the most likely to help themselves. In another experiment he showed that the well-off were three times more likely to cheat than those at the lower end of the socio-economic ladder.

Piff and his researchers spent three months in another study observing the behaviour of drivers at a busy intersection of two major highways. They graded cars according to value on a scale of one to five, with five being the most expensive. To no-one's surprise, they found that drivers of the most expensive grade-five cars were the most likely to cut off other drivers.

The researchers also studied drivers at a busy intersection in the San Francisco Bay area. The team stationed "pedestrians" at crosswalks. A researcher acting as an ordinary pedestrian would enter the crosswalk as a car approached. Half of the grade-five car drivers entered into the crosswalk, with little regard for pedestrians. Piff commented that: "It’s like they didn’t even see them" (2).

As an aside but not analyzed for statistical significance, about one-third of Toyota Prius drivers also broke crosswalk laws, making the car among the highest of the "unethical driving" car brands. Piff said: "This is a good demonstration of the 'moral licensing' phenomenon, in which hybrid-car drivers who believe they're saving the Earth may feel entitled to behave unethically in other ways".

 

1. Michael Kraus, Paul Piff and Dacher Keltner, ‘Social Class as Culture: The Convergence of Resources and Rank in the Social Realm’, Current Directions in Psychological Science, August 2011.

2. Lisa Miller, ‘The Money-Empathy Gap’, New York Magazine, July 2012

 

Why do we allow this to happen?

I will let George Monbiot have the last word before the conclusion from his article "The Spark of Hope". While his article is aimed at the UK, it also applies in great measure to other Western countries:

"Most of the world’s people are decent, honest and kind. Most of those who dominate us are inveterate bastards.

So the age-old question comes knocking: why does the decent majority allow itself to be governed by a brutal, antisocial minority? Part of the reason is that the minority controls the story.

Despite everything that has happened over the past two years, Rupert Murdoch, Lord Rothermere and the other media barons still seem to be running the country. Their relentless propaganda, using exceptional and shocking cases to characterise an entire social class, remains highly effective. Divide and rule is as potent as it has ever been.

But I’ve come to believe that there’s also something deeper at work: that most of the world’s people live with the legacy of slavery. Even in a nominal democracy like the United Kingdom, most people were more or less in bondage until little more than a century ago: on near-starvation wages, fired at will, threatened with extreme punishment if they dissented, forbidden to vote. They lived in great and justified fear of authority, and the fear has persisted: passed down across the five or six generations that separate us, and reinforced now by renewed insecurity, snowballing inequality, partisan policing."

 

Conclusion

The evidence is incontrovertible, and is backed up by pretty much everyone's experience in the University of Life that wealth corrupts, sometimes absolutely. While it is a truism you don't get rich by giving it all away, that doesn't mean that all rich people are misers, or have crossed the thin blue line. However, it can be said that it may also be that a certain type of person is attracted to wealth to fulfil their own financial dreams, and are oblivious to the consequences of their actions. That does not explain the attitude of hereditary rich such as Prince Alweed though, whose efforts to appear as one of the richest on the planet at all costs, shows that there is more to this than just the money.

It is the power, prestige, and sense of purpose that drives these people. Frequently too, it is the attention lavished on these people that they also enjoy, rather like actors in a play. Thus in the end, it is indeed a form of acting, or the living out of a role along with those who also partake of the dream, either as equals, or wannabes. They are blinded by their self interest, and for people with so much at their command, do not see, or refuse to see, the negative impact they have on societies throughout the world, to say nothing of the often disastrous environmental impacts.

 

Articles of interest in no particular order:

Science Magazine: Shame on the Rich

New Internationalist Magazine: India’s elites have a ferocious sense of entitlement

Biz Radio with Dion Chang: The Feral Rich. Wealth Untamed

New Internationalist Magazine: The Feral Rich

George Monbiot: The Spark of Hope

Keithpp's Blog: Nestlé chairman says water is not a human right

The Guardian: Why the politics of envy are keenest among the very rich

Mana with John Minto:The feral rich - how can we help them?

George Monbiot: Secrets of the Rich

George Monbiot: Another Country

New Internationalist Magazine: Animation: feral rich fiscal safari

 

As a courtesy to researchers and students, due to the volatile nature of the internet, the above files and videos are available as a zipped file of about 40 megabytes. The file name gives the date of access: Feral Rich 10th May 2013. Right click the file and choose "Save Link As" or similar, to save it to your computer. Please remember that if applicable, the files remain copyright© of the respective authors, publishers or organizations.

 

If you have an article, video or image to contribute to this section, please get in contact. Remember, we are non-religious, nonpartisan and support no-one, except those who aim to bring truth to everyone, so we can't accept anything with a bias. Real life examples are most welcome.

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