The New Gilded Age

The Corner has done us all a favour posting in full the text of Teresa Tritch’s NYT article, The Rise of the Super-Rich (there is a further comment at Tensegrities blog).

For some time it’s felt like we’re entering a new Gilded Age. This article is just further confirmation. Look at the growth of luxury brands, exclusive hotels and holiday destinations, super yachts (over 6000 worldwide) and you see a clear picture of widespread consumption and wealth that far outstrips the excesses of the 80s.

However, at the same time we are seeing an interesting trend; a new era of large-scale philanthropy. Look at the Gates Foundation and Warren Buffet’s recent “generosity.” This is an important, if long overdue resuscitation of the idea of Noblesse Oblige.

We might also be seeing some changes in the attitudes of some with regard to cross-generational wealth and social responsibility.

So, what do we make of this sudden explosion in wealth?

Overall levels of wealth, or the gap between the wealthiest and everyone else, are only one part of the problem. Regressive policies, policies that make it harder for the poorer to get ahead, policies that reduce access to education and health, are the deeper problem. Add to this excessive private debt, the inability to create investment income, lack of employment security, and too much personal burden for vocational training are other problems that need attention.

Moreover, some honest reflection is needed on how many of the world’s biggest companies originally started with massive government support (tax breaks, licence arrangements, protected markets) and how many of the world’s luminaries were educated through government initiatives (like the GI Bill, free tertiary education in the UK and Australia, etc).

Are we making the same opportunities to rise up an get ahead available to all young people today? It doesn’t seem so.

All this comes back to the question of why we have governments in the first place and what we hope to achieve by letting them govern us. Perhaps the most important line in Tritch’s article is the following,

…an ideology that began taking shape some 30 years ago, when economic policy makers began to disdain the notion of harnessing and protecting society’s collective potential in favor of crafting incentives to align individuals’ interests with those of the market.

I believe we measure a society by the plight of its poorest. This isn’t a matter of disavowing either market economics or globalisation. Rather, it’s about protecting the potential of each person and assuring their potential is not limited by their place in society when they were born. We should choose the kind of economics we need to fashion the society we want.

I want a society that promotes human potential and flourishing.

Maybe, just maybe, instead of reacting to the new gilded age with a sense of envy or demanding society take more from the super rich, the rich and the nearly rich, we could encourage a sense of generosity, even a playfulness of opportunity? Maybe we need less rhetoric about tax and tax burdens and more about the rewards and joys of being a giver? About focussing on opportunity?