Sunday’s New York Times Magazine contained a controversial article about a former partner of Mitt Romney’s at Bain Capital named Edward Conard. Sounding a bit like the libertarian novelist Ayn Rand, Conard argues, forcefully, that we are all better off because of rich people.
Rich people, Conard says, do most of the saving and investing. They provide the capital that creates new businesses and industries, finances inventions and discoveries, and are willing to take many risks and lose a lot of money for every one that pays off spectacularly. If the rich didn’t do these things, we would all be worse off.
Conard concentrates on rich people as investors. But the wealthy also provide enormous benefits as consumers. Think of all the inventions of recent years that were enormously expensive when the first ones came on the market: personal computers, high definition televisions, cellular telephones, tablets, and so many others....
In his famous 1889 essay, Wealth, Andrew Carnegie, who sold his steel company in 1901 for the equivalent of $325 billion in today’s dollars, agreed that the wealthy aided society both as investors and consumers. But at the same time, he said that the ownership of great wealth bestowed a heavy obligation on those with it.
Carnegie had no respect at all for those who merely inherited their wealth and simply sat on it; and he thought it was irresponsible for those who made great fortunes to leave them to those who didn’t earn it. He believed strongly in an archaic concept known as noblesse oblige, which means that great privilege brings with it great responsibility.
Carnegie believed that not only should wealthy men leave little to their heirs, he also disdained those who left their fortunes to foundations, universities and such, viewing them as monuments to vanity. While the latter was better than the former, Carnegie felt that rich men ought to use the same skills that made them wealthy to properly dispose of their fortunes while they lived. The man who dies rich, he said, dies disgraced.
I think Carnegie would disagree strongly with Conard, who appears to think that the responsibility of the rich man begins and ends with making a fortune. Sadly, far more rich people today appear to agree with Conard than Carnegie.