'Billionaires' Book Review: Money Can't Buy Happiness

http://www.newrepublic.com/article/120092/billionaires-book-review-money-cant-buy-happiness

by tacon • 12 years ago

47 44 12 years ago

This is an excerpt from a longer article in The New Republic, Extreme Wealth Is Bad for Everyone—Especially the Wealthy [1], which is a review of the book Billionaires: Reflections on the Upper Crust by Darrell M. West (Brookings). The articles are by Michael Lewis (the author of Moneyball and The Big Short, among others)

[1] http://www.newrepublic.com/article/120092/billionaires-book-...

dang• 12 years ago

Yes. Url changed from http://theweek.com/article/index/274046/what-wealth-does-to-....

marincounty• 12 years ago

"A team of researchers at the New York State Psychiatric Institute surveyed 43,000 Americans and found that, by some wide margin, the rich were more likely to shoplift than the poor." In college I worked as a security guard, and was astonished to see to amount of seemingly wealthy people shop lifting. It didn't make any sense, other than the thrill? Minorities, and seemingly low income people were watched the minute they walked on the door. If they did steal they were always arrested. The wealthy shop lifters were allowed to steal if they were good customers(spent a lot). Not one was ever arrested. While I was there a doctor's wife would steal weekly--she was given a stern warning. I'm tempted to name the store. On another note; employee theft was usually higher than customer theft. I though that store was an anomaly, but that's not the case; security professionals try to keep the real truth a secret.

peteypao• 12 years ago

I would really like it if you could name the store.

brandonmenc• 12 years ago

My anecdotal experience is the exact opposite of yours.

As a teen, I worked shipping and receiving at a Macy's in the mid-to-late nineties, and frequently hung out in the security camera room. I watched them follow thieves on the cameras while we waited for them fill their bags with a felony-level amount of merchandise before giving chase - chases I was at times enlisted to participate in.

Not a single thief was "seemingly wealthy," and we never, ever, let anyone walk out with merchandise. If anything, the opportunity to catch a rich person in the act would've been immediately seized, if only for the novelty.

ScottBurson2• 12 years ago

Interesting. I guess the well-off thieves figure out pretty quickly which stores will let them get away with it. Since it sounds like they also buy things from the stores they steal from, it might even be profitable to let them do it.

waterlesscloud• 12 years ago

From my time in retail (record stores, which tells you how old I am), employee theft completely dwarfed customer theft. Probably 95% of the 'shrinkage' was employees, if not more.

wtbob• 12 years ago

I don't think that it's terribly surprising that rich folks should be more likely to shoplift or steal candy than poor folks, for precisely the reason that Lewis identifies: the sums involved seem so much less important. I think it might imply that we are all constantly geting away with what we think we can get away with. That sounds right to me.

jberryman• 12 years ago

I think "the sum seems unimportant" is something a wealthy sociopath might think. I'm around lots of things I could steal that feel relatively cheap, but I don't, nor do I litter, etc., not because I couldn't get away with it, but because it feels wrong and icky, and I would be ashamed of myself.

nemo2• 12 years ago

I grew up in a neighborhood in CA that gentrified fast since it was on the coast so I wound up with a lot of millionaire neighbors (doctors, lawyers, actors, pro sports people, a remarkable number of people who scammed government contracts). One thing about it was that the richer the people were, the more you'd find among them those who had a sense of really being better than people who weren't as rich - even if they basically stole their money it made them feel like they were special and successful and better than others because of it, and different rules applied to them. Certainly not all, but some, and they stood out. Their kids who I was in school with inherited that attitude, and did things that made my skin crawl, like doing school fundraisers and spending the money on a cocaine party, or getting a Corvette for their 16th birthday and crashing it since they'd wanted a Porsche (my god I hated that kid), shoplifting for kicks, or wasting expensive things in front of less wealthy people for entertainment. Having a lot of money can seriously mess with some people's heads.

aflalfa2• 12 years ago

This seems less intuitive than the idea that wealthy people are less likely to commit petty theft because a candy bar is a much smaller percentage of their expendable income than the percentage of the expendable income of a lower income person.

curiouslurker• 12 years ago

Hmmh, I remember reading a study (or studies) that showed wealthy people are generally more honest, the larger point being that you are unlikely to thrive if you are not virtuous or lack high character.

That said, I'll quote from "As a man thinketh" by James Allen where he says some thing along the line of: When people look at successful people who are cheats and unsuccessful ones who are honest, they forget to analyze all their other traits. The successful cheat may have serious talents, work ethic etc that make him successful despite his dishonesty and the unsuccessful saint may be lazy, unambitious or have other faults that make him unsuccessful.

cafard• 12 years ago

The wealthy might have less incentive to lie in the small everyday transactions that make an impression. The English of the 19th Century regarded the Irish as inveterate liars, perhaps not considering the disproportion in power between the official classes (English and Anglo-Irish dominated) and the rest of the population.

As for the unsuccessful saint, presumably he regards sanctity rather than wealth as success.

pronoiac• 12 years ago

I heard the opposite. "A new study suggests that being wealthy primes people to act like jerks."

http://healthland.time.com/2012/02/28/why-the-rich-are-less-...

amelius• 12 years ago

“While money can't buy happiness, it certainly lets you choose your own form of misery.”

― Groucho Marx

ctchocula• 12 years ago

The part about money not being able to influence politics does not ring true to me. Sure, perhaps isolated cases like Mitt Romney and Meg Whitman may not have succeeded in winning some election, but then you have Koch brothers using newspapers and television networks to push their brand of politics.

"Another study, by a coalition of nonprofits called the Independent Sector, revealed that people with incomes below twenty-five grand give away, on average, 4.2 percent of their income, while those earning more than 150 grand a year give away only 2.7 percent."

This study is also unconvincing. You could say by percent the people making less than $25k are more generous, but the use of percents as a metric here is misleading. 2.7% of $150k+ is a minimum of $4050 while 4.2% of <$25k is at most $1050. Is it fair to say the wealthy are less generous when they are donating more money by one metric but not another?

judk2• 12 years ago

Also that metric is likely considering low income religious people who are giving money do their church leaders, not charity in the sense of "giving to others for nothing direct in return"

A d of course high income folks pay 10-20% more of their income in taxes than low income folks.

And quite possibly spend more supporting extended family members and friends , compared to lower income members of the same family or social circle.

ceph_• 12 years ago

of course high income folks pay 10-20% more of their income in taxes than low income folks.

This is blatantly false. The effective tax rates for the super rich are much lower than the average person, due to the majority of their income coming from capital gains. For example, Mitt Romney paid 14% on the 13.7M he made[1] in 2011.

[1] http://www.slate.com/blogs/moneybox/2012/09/21/mitt_romney_s...

thangalin• 12 years ago

It ought not ring true for anyone.

“Economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.”

~ Martin Gilens and Benjamin Page, Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens; Perspectives on Politics, 2014

jacquesm• 12 years ago

And let's not forget Berlusconi and every American presidential election. Without money and media those would be completely different.

byuu• 12 years ago

The part about money not being able to influence politics does not ring true to me.

Yeah, it's true that you can't outright buy an election wholesale. But rich people are rich for a reason: they don't just throw their money away on things that have zero results. They spend so much on elections because it has real results. Maybe it sways a race by 4%. But if the race is decided by 2%, then that's enough to win instead of lose. Plus, some of that money goes to campaigning, some goes to decide which candidates are able to afford to run in the first place, some goes to lobbyists, some of it goes directly to congressmen in return for favors, etc.

wpietri2• 12 years ago

You may be interested in this: "In almost every instance, senators appear to be considerably more responsive to the opinions of affluent constituents than to the opinions of middle-class constituents, while the opinions of constituents in the bottom third of the income distribution have no apparent statistical effect on their senators’ roll call votes. Disparities in representation are especially pronounced for Republican senators, who were more than twice as responsive as Democratic senators to the ideological views of affluent constituents."

"Economic Inequality and Political Representation", Dr. Larry Bartels, Princeton https://www.princeton.edu/~bartels/economic.pdf

Omniusaspirer• 12 years ago

"Is it fair to say the wealthy are less generous when they are donating more money by one metric but not another?"

In my opinion yes, simply because I feel the "raw $$$ given away" metric is inherently useless when attempting to measure generosity; Exactly because it doesn't factor income into the equation. Someone making $1 million annually could give 100% (or more) of a lower income individual's income away without any serious effect on his quality of life.

danieltillett2• 12 years ago

I love the subtlety of this defence of the wealthy. Peons don't worry about all that money the 0.01% have extorted from you by rigging the rules, they are not happy. Don't worry about their corrupting influence on democracy and society because some of them sometimes lose (like Meg and Mitt). Move along and leave your betters alone - isn't it time for you to phone in your vote for American Idol?

pedalpete• 12 years ago

Did you miss this statement "The single biggest donor to political campaigns just now is Tom Steyer, a Democrat with a passion for climate change."?

If all the wealthy people had the same goals and views, then you'd be in trouble, but as they having competing ideals, what it seems America ends up with is the wealthy trying to outspend each other to gain political favour, which, according to the article, they have been unsuccessful at doing.

The 99.09% may not have the money, but they've got the vote, they've got brains, creativity, and the persuasive effect of numbers.

The question, what should those capabilities be pointed at resolving?

Blame the rich may be popular right now, and I'm all for a more equal society, particularly bringing up the income of the lowest 50%, but I doubt a heaping tablespoon of sarcasm is going to get us there.

wpietri2• 12 years ago

Honestly, sarcasm and ridicule are one of the best weapons people have against status quos. Humor cuts through bullshit like no amount of serious debate can. I don't think it's a coincidence that people like Jon Stewart and Stephen Colbert have had such success in an age of rapidly increasing inequality.

marcusgarvey• 12 years ago

If all the wealthy people had the same goals and views, then you'd be in trouble

One must of course speak in generalities but it seems obvious they have at least one goal in common: to remain wealthy & empowered, come what may. Which of course has implications for which public policies succeed and which fail

As for your statement that the wealthy have not gained political favor -- not true: "Multivariate analysis indicates that economic elites and organised groups representing business interests have substantial independent impacts on US government policy, while average citizens and mass-based interest groups have little or no independent influence." http://m.bbc.com/news/blogs-echochambers-27074746

danieltillett2• 12 years ago

I was not trying to be sarcastic here. I was summarising the articles defence of the 0.01%. It really is a subtle and powerful attack on the mega wealthy thinly disguised as a defence.

jamariusThomas• 12 years ago

I think one of the interesting things about this article is the principle of relatively and how people will tend to do things within their means. You're more likely to violate traffic rules if you have a more expensive car because it's faster than the other cars and you want to be able to utilize the car's features or you know if you do something wrong and get caught, you're able to pay off the fines because you have so much money. I'm sure there's a ton of rich people who are very happy, and I'm guessing the proportion of happy rich people would be about the same as the proportion of happy average people. I think one of the things these studies do is that they use the relatively small and highly selected sample size of rich people and compare them to a group of normal people and then come to a generalized conclusion of rich people being more miserable than average people. But I would beg to differ if you were to take rich people in other industries besides the banking industry, such as tech, healthcare, or natural resources you'd probably find a lot of people who love their loves.

pcl• 12 years ago

This was published in November, weeks before the big shake-up at the New Republic [1]. It will be interesting to see whether or not the new New Republic will publish articles that go into an issue with this much depth and consideration.

[1] http://www.nytimes.com/2014/12/05/business/shake-up-at-the-n...

gbog• 12 years ago

This states the obvious: the very rich or very successful ones are not happy. Bill Gates doesn't have a better life than the first rickshaw you'll find in Kolkata. The main reason will probably because of the kids, which are not likely to be spoiled in the case of the rickshaw.

And this is where I find some demonstrations of pg fall short: the reason to start start-ups is to make huge money, but huge money is dangerous for the mind. In this case it is better to make normal and steady amounts of money, which normal corporate jobs provide.

I guess starting start-ups is only for those with very solid psychology, or for those already crazy.

peteretep• 12 years ago

I struggled to find "the very rich or very successful ones are not happy" in the article

clamprecht• 12 years ago

But Bill Gates now has the money to fund things he thinks will improve the world. That's a pretty good motivation to become rich, no?

nazgulnarsil• 12 years ago

Even though most people have convex utility WRT money this is not true for everyone. Some people need large amounts of money for big ambitious projects, others might have linear utility WRT money. For example, say you were donating a significant fraction of your wealth to effective charities. It is not clear you should have diminishing marginal utility towards these donations the way you would with personal consumption.

j_lev• 12 years ago

Some thoughts:

1) "Enough" by John Bogle is a decent read if you want more of the same:

Two famous authors, Kurt Vonnegut and Joseph Heller are talking at a party hosted by a billionaire hedge fund manager. Kurt says to Joseph, “You know, this billionaire makes more money in one day than you made in your whole lifetime from your novel Catch-22“. Joe responds, “Yes, but I have something he will never have… enough.”

2) There's a big difference between people wanting to give back and Picketty's proposal to tax the tits off the rich. I believe the difference is due to people's faith in government and the "buffer" they perceive they require. There is no shortage of people with an 8-figure net worth who just want to increase their wealth a little more, "just in case."

3) The "rich cancel each other out" argument may hold more for the US than for other countries. Not a criticism, just pointing it out.

dbarlett• 12 years ago

Counterpoint: If money doesn't make you happy, then you probably aren't spending it right http://www.wjh.harvard.edu/~dtg/DUNN%20GILBERT%20%26%20WILSO... (PDF)

a8da6b0c91d• 12 years ago

Why should we care about happiness? Poor people in dirt poor Indian towns where they all shit on the street are statistically happy. This is something to aspire to?

This whole genre of "happiness" pop-psychology seems essentially effete. Why don't we ask people how bad-ass they feel? Can money buy you bad-assery?

'Billionaires' Book Review: Money Can't Buy Happiness

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