Vail Daily letter: What drives greed?
Vail, CO, Colorado
Reading Butch Mazzuca’s fanciful story about college students being taught a Catch 22 dilemma (“Today’s political Catch-22”) brought to mind a college economics course years ago in which our professor was lecturing on the concept of “marginal utility” and, specifically, the marginal utility of one dollar.
The professor challenged us with the theory that the marginal utility of one dollar is as important to a millionaire (billionaire in today’s terms) as it is a homeless person who doesn’t have a dime to his name and that no one can prove otherwise.
That seemed counterintuitive at the time, and it still does. If true, it explains a lot.
Those of us of average means often wonder what it is that drives the uber rich to acquire more and more and more wealth. Aren’t these people ever satisfied? McMansions on multiple continents, private jets, outrageous yachts and enough wealth that seemingly couldn’t be spent in a dozen lifetimes.
In the process, the ultimate wealth builders often break or bend laws, buy off politicians and skirt on the fringes of questionable business ethics. Yes, these people are very serious about this.
Wasn’t it the Duchess of Windsor who said one can never be too rich or too thin? The phrase “you can’t buy happiness” is totally lost on this culture. They’ve all heard the phrase you can’t take it with you, but they will die trying.
There are numerous, credible studies that confirm that the very rich are getting richer and the middle class is somewhere between stalled and backing up.
Put simply, a greater portion of the total pie is going to a shrinking percentage of the total population. This isn’t just happening in the United States but in the industrialized world generally.
In other times and places (the French Revolution comes to mind), the building of aristocracies led to beheadings of the perpetrators. But royalty was involved there rather than unfettered capitalism.
This brings us back to the marginal utility of a dollar and my professor’s argument. If he was correct, it debunks a lot of popular theories such as “a rising tide lifts all ships” and a popular supply-side economics principle that cutting taxes to the rich will have a “trickle down” effect on mainstream America through job creation and capital investment.
This just hasn’t happened, perhaps because the very wealthy didn’t want any dollars trickling anywhere but into their bank accounts.
I really don’t disagree with Mr. Mazzuca’s contention that individuals should be rewarded for their accomplishments and the taking of risk. To much of the rest of the world, we are workaholics. But that is who we choose to be.
The problem is that greed, which becomes most visible in a free-market economy such as ours, is both limitless and boundless. We don’t all have that trait or behavior in equal amounts. Bill Gates and Warren Buffett are notable examples of individuals who exemplify the spirit of the marginal utility theory but are returning much of their accumulated wealth back to support charitable causes.
Should we ever reach a point where we are all middle class (not a likely or desirable scenario), Mr. Mazzuca and I can take comfort knowing that the marginal utility of a dollar will be the same for all of us, as it was for the millionaire and the homeless. We will all equally value that next dollar. In the meantime, those of us who wish to feed at the trough can’t get the big hogs out of the way.
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