Topic: Economics
The Purpose of the Rich

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A crucially misunderstood aspect of society and the economy

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by Edward Townes
(libertarian)
Sunday, December 30, 2007

From newspaper articles decrying the Christmas bonuses of those who work in the financial services, to curiosity programs into their lifestyles on TV, I get the sense that people don’t understand what useful purpose the rich serve. It seems to me that because of this lack of understanding, a certain level of nastiness is reserved for the rich, one that would be deemed despicable if applied to any other "minority" group, double standards be damned.

Let me start by telling you how rich people come to exist. Contrary to popular opinion, the vast majority of rich people do not become rich by evil deeds and luck. Nor are the vast majority of rich people arrogant, uncultured, wastes of oxygen. The small number of people who do in fact possess these "qualities", also exist, unsurprisingly, as proportionately represented in the poor. The vast majority of rich people become rich because they’ve succeeded in our society. This is a capitalist world, where making yourself unequal with the competition is precisely, and entirely, the point. Thus demonizing the rich for being successful in the competition of career life makes about as much sense as telling your children to do well in school and then shooting the one in the face who dares to get all A’s. Literally, about as much sense as that. How on earth people expect to have a successful country where the successful people are punished and insulted is completely beyond my comprehension.

So let’s leave aside how they became rich and ask what purpose do they then have. We see them as having more money than we could possibly need for day-to-day life. They make a million or more a year, whilst we are able to comfortably live on a fraction of that. They drive Bentley Continentals, whilst we prove by the millions that you could live with a Ford Ka. They have no primal need for luxury goods, and we get along just fine without them, so it does beg the question, why is this useful to society? Well, when it comes to luxury goods, we would be extremely well advised to keep in mind that the luxury items of today are the standard items of tomorrow. These are the people who are willing to pay the extra money to get brand new expensive technology into commercial production, and for all the jobs that will come with that production. Without rich people, technology you take for granted, such as automobiles, would have remained prototype stages for decades, if not permanently. 

But even this misses the really big purpose of rich people. Yes, they spend their money on what we would consider extravagant things, but there is a limit to how much money they can spend. What about the money that they earn and never end up spending? Enter the single biggest hole in mainstream economics. Amazingly, having spent 2 years studying economics at school, I was never taught this most basic of functions - the capitalist. You are implicitly taught in socialist England that the worker is the center of all tangible production, and, in true Marxian style, that the capitalist is merely a mechanism for defrauding the worker of their right to the profits of the enterprise. Pure, unadulterated, bullshit. The capitalist serves a purpose which is equally vital to the worker. He is the one that puts down all the money for the machinery and land for the workers to work. He is the one who provides the monthly wages the workers desire instead of them having to wait until a return is made. He is the one who takes the risk that the good they are producing might fail in the market. He is the one who forgo-ed the consumption of the money he put down for the enterprise. The rich people of the world fill the absolutely essential role of providing assets to be worked and made productive. Without rich people we would not have most of the technology we enjoy today in our daily consumables, nor would we likely have jobs that required capital beyond a stick and an animal. Let us keep this in mind the next time we participate in the immoral act of judging other people’s acceptable incomes.

©2007 Edward Townes, all rights reserved. You must have written permission from the author in order to republish this work.
Published: Sunday, December 30, 2007
Last modified: Sunday, December 30, 2007

The views expressed in this article are those of Edward Townes only and do not represent the views of Nolan Chart, LLC or its affiliates. Edward Townes is solely responsible for the contents of this article and is not an employee or otherwise affiliated with Nolan Chart, LLC in his/her role as a columnist.

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