Sunday, November 05, 2006

We need the rich but should learn to laugh at rather than envy them

Even though the way he said it was crass, Peter Mandelson was right when he said that Labour should be relaxed about people becoming rich. It’s an inevitable part of an entrepreneurial liberal economy in which ability is judged more highly than breeding.

Without incentives many with the flair necessary to drive businesses forward just wouldn’t bother and our economy would suffer. There can be little doubt that money is a great motivator for these sorts of people. One of the reasons that many of us will never become millionaire businessmen is that we can’t understand why anyone who’s made a million or two would bother to carry on working.

It’s curious that, even in leftwing circles, ‘self-made’ people seem to be regarded with much greater suspicion than those who have inherited ‘old-money’ are. Somehow these types who were born rich seem so much less brash and more at ease with their wealth. But their ancestors were probably robber barons, royal sycophants or the thrusting entrepreneurs of their day so they’ve no reason to feel superior. Nor we to troop around their ancestral homes in reverent admiration for their family’s good taste. I wonder if in 100 years time the National Trust will own Alan Sugar's or the Beckhams’ places and our descendants will be dragging their unwilling offspring around it when they can’t think of anything else to do?

In the Observer today Will Hutton uses the classic journalistic trick of using one rotten apple to condemn the whole bunch. He refers to Tom Bower’s book about Conrad Black’s rise and fall. But, as he points out, "The very rich ... are like the rest of us: they don't want to be left behind by their social equals" which is why they compete for status symbols like private jets or monstrous pensions.

He rather unpicks his own tirade though by pointing out that "great companies, paradoxically, are about common purpose, shared endeavour and a fair distribution of rewards". Sure the amounts some people pay themselves (sometimes just because they can) are obscene but there is little that can be done about it. Tax for the super rich in this globalised world is largely voluntary.

So we'll do better to smile at the foibles of the wealthy than to get bitter and twisted about the ever widening gap between the richest and poorest. Every society has had its winners and losers, the important thing for Labour is to ensure that the losers can lead decent lives...


At 20:53, Blogger Harry Barnes said...

I couldn't get to your comment page earlier, so my comments are linked via my own blog.

At 08:10, Blogger politaholic said...

I can't say I have any very strong feelings about "old money" versus "new money", but a brutish meritocracy is not a very inspiring ideal. Nor are market economies accurately described as "meritocratic". The best argument for market economies is the utilitarian one that they amplify the volume of wealth and (because the "pie" is bigger) the least well-off are better-off than otherwise (they have more "pie" even if they have a smaller proportion of the "pie"). There are however several problems: one is that it is not obvious (even if we restrict the comparison to capitalist liberal-democracies) that the most unequal societies have the most efficient economies. Nor is it obvious that the poorest are best-off in the most unequal societies (if I were poor, disabled, old, sick - I'd rather be in Sweden than Detroit). There is also another argument, a tad idealistic perhaps, which is that systematic gross inequalities undermines common citizenship (this ties in with many of the comments in Harry Barnes post who fills in some of the details of this argument). Not all "goods" are material goods. Beyond a certain level of well-being there may be some things - such as equal citizenship - which are of greater value. Of course, I may be arguing this because I am consumed with envy (the tiresome old ad hominem argument against those who favour less inequality). In truth, I do envy the super-rich (who could not?) but I don' think I am preoccupied with this; but then when it comes to our own motivations which of us can be sure?

At 14:36, Blogger Hughes Views said...

Thanks for the comments Harry and Politaholic but I think you've slightly missed my point. I'm not suggesting that it's morally justifiable for people to be super rich whilst others starve (and in global terms we who blog are all super rich). But there's nothing a liberal democratic government can do about it without putting at risk the economy upon which all our prosperity depends.

It's about pragmatism. When I spoke to Tony Blair in early 2005 about why he didn't support the Lib Dem 50% high rate tax proposal his answer was primarily pragmatic - it wouldn't raise the expected revenue and it would probably slow down the economy.

Do you really want to return to pre-1980 Britain or Dennis Healey's infamous threat to squeeze the rich until the pips squeak?

I'd much rather have a Labour government doing good by stealth with a vibrant economy than either of the only realistic alternatives viz a Tory government or a Labour one lurching from Sterling crisis to Sterling crisis.

I'm sorry p. is envious of the super-rich. I'm not, their lives look ghastly. I've never met any of them but I have met quite a lot of very rich people. For example at a wedding reception I went to recently I was the only one sitting at a big table who wasn't a multi-millionaire. They still had all the same worries and concerns that the rest of us have. 'The money to be comfy' (as Dylan Thomas put it) is all anyone needs...

At 10:31, Blogger politaholic said...

The point, as I recall, was about whether we should be "seriously relaxed" about people becoming filthy rich. Harry Barnes and myself made several reasoned arguments against this, which you have chosen to ignore. No one questions the need to be "pragmatic" (although I doubt that a 50% rate would seriously damage the economy). Finally - less seriously - it must be very consoling to imagine that the lives of the super-rich are ghastly. I'm not so sure. Those grapes don't look sour to me.


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