The vilification of the ‘rich’ is a common tactic used to score easy political points.

Why we despise the rich
By Karen Horn

The vilification of the ‘rich’ is a common tactic used to score easy political points. But where does this resentment come from? Karen Horn writes for CapX on the cultural and historical sources of ‘Rich Aversion’ and why it has no place in modern liberal society. "Material inequality is once more the – not so fertile – soil on which the wide anti-capitalist, anti-free trade, anti-globalization, anti-western, anti-American stances have been growing."

Remember the earworm “Que sera, sera”, interpreted by Doris Day, so typical for the Fifties? “When I was just a little girl / I asked my mother, what will I be / Will I be pretty, will I be rich …” Children know that there is no free lunch. Money promises access to the many material marvels of the world. Not all boys and girls will be rich once they’ve grown up, however, for a variety of reasons, be it lack of education, talent, motivation or sheer luck. And those who will be rich may end up disappointed, since money can buy a lot, but not everything that is essential to a happy life.

In his Theory of Moral Sentiments, the Scottish Enlightenment philosopher Adam Smith (1723-1790) describes the fate of a rich man who comes to recognize the vanity of wealth: “It is then, in the last dregs of life, […] that he begins at last to find that wealth and greatness are mere trinkets of frivolous utility, no more adapted for procuring ease of body or tranquillity of mind than the tweezer-cases of the lover of toys; and like them too, more troublesome to the person who carries them about with him than all the advantages they can afford him are commodious.” (TMS, IV.I.8) Money can leave you lonely and unhappy. As the common expression implies, the “happy few” are only a few, and even inside this small group, there tends to be more rivalry than chivalry. What ties the rich together nevertheless is the vast ocean of resentment, envy and prejudice that engulfs them all.

The sight of other people’s wealth doesn’t seem to function as a good incentive. Many have-nots just pity themselves and indulge in a zero-sum mode of thinking. They feel exploited and abandoned. In an analogy to Pierre-Joseph Proudhon’s saying about property, they hold and spread the belief that all prosperity is essentially theft. This sense of deprivation, irrational as it may be, contains the germs of rebellion, as Adam Smith lucidly foresees in his “Wealth of Nations” (1776), his famous economic masterpiece: “Civil government […] is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all.” (WN, V.i.b.12) In our days, material inequality is once more the – not so fertile – soil on which the wide anti-capitalist, anti-free trade, anti-globalization, anti-western, anti-American stances have been growing.

From a rigorously economic point of view, however, there is really nothing that supports such a hostile attitude toward the rich. Wealthy people consume more than others, and they consume more expensive goods. Without their demand for luxury, there would be fewer jobs and smaller, stagnant incomes for the not-so-rich who cater to them. Their consumption spurs growth. The rich also accumulate capital. Since they cannot consume as much as they have, they save and invest – which is good for the whole of society.

None of this is news. In the last days of the feudal age, Adam Smith wrote, perhaps a little too optimistically: “Though [the rich] mean only their own conveniency, though the sole end which they propose from the labours of all the thousands whom they employ, be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species.” (TMS, IV.I. 10) There it is, the famous invisible hand.

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