Paul Krugman has long argued that the reason the rich will brook no public criticism has to do with the needs hierarchy. Since they have everything that money can buy, they’ve moved beyond that. Now their need is to have all the nation worship them as demigods for their brilliant successes. He wrote about this today, Plutocrats Feeling Persecuted. I think there is much to this. But the issue is more fundamental than this.
Last year, I reported on a study by sociologist Paul Piff. He had kids play the board game Monopoly with special rules. As I wrote, “Instead of giving players an equal start, he defined players as either rich or poor. The rich player received three times the usual starting cash. The poor player received half the usual starting cash, got half as much money for passing go, and had to roll one die instead of the usual two. Obviously, the poor player lost—and quickly.” There is nothing especially surprising about that. But what happened was that the rich players came to see themselves as deserving of their special status. For example, the rich players were far less likely to cut the other player any slack and showed feelings of schadenfreude.
This is quite natural. People tend to think that they are entitled to whatever they are used to having. I’ll give you an example of this. I have a friend who has rented a house for a couple of decades. Last year, his landlord raised his rent 50%. He thought this was totally unfair. But in fact, his landlord had not raised his rent in ten years. If his landlord had raised his rent only 4.2% per year, it would have been at the new rent level, plus he would have been paying higher rent for the previous ten years. But none of that really mattered to him because he felt that what he was paying was the amount he was entitled to. The sudden rent increase shattered that fantasy.
The rich are like all of us in that they come up with ways to justify living better than others. But they have a lot more work to do because the nature of our economic system is to intensify inequality. If two people invent something at the same time, the one who gets the patent first can go on to be a billionaire, whereas the other gets nothing. And over time, these kinds of disparities only grow. For example, because he was rich and well connected, Bono got to invest in Facebook early and so made about a billion dollars. His children will inherit his money in addition to all the other advantages that come from being Bono’s child. Wealth accumulates over generations. (This isn’t to put down Bono, who seems like a decent guy—especially compared to other billionaires.)
As a result of this, the rich need to do some heavy duty justifying. This is where we get the myth of the Job Creator. The little people just spend money but the rich create jobs. Thus, in their own minds, they take on the responsibilities of the government. What need is there for social programs when these great Job Creators are doing God’s work by caring for the poor? And this leads to a feeling that anything the government does to reduce their wealth is evil because it gets in the way of their own program of Good Works like yacht buying.
But as I said, this is completely normal. I don’t expect the rich to behave any differently. Similarly, I don’t expect corporations to work for the public good as others do. These people and institutions do what is best for themselves. And that’s how the whole capitalist system is set up to work. It is wrong to expect anything different. What we need, then, is a strong government that stops the rich from getting too rich and corporations from getting too big. Because once that happens, we see what we have today: a system where the wealthy manipulate the government. And what they do is make the already unfair “winner take all” capitalist system even less fair.
So the question is not, “Why are the rich so awful?” It is, “How did we allow the rich to get so powerful?” And going forward, we have the even more important question: what are we going to do to reverse this?