Wednesday, January 13, 2010

Can Wealth Buy Contentment?

Despite this blog’s short lifespan so far, the astute reader will have already noted a tinge of disdain in my thoughts when it comes to people who make a ton of money.

And while those astute readers would be correct in their assumption, I would like to say that my jealousy is already tempered with a fair amount of conviction. Conviction in the sense of being remorseful for being jealous, and conviction in the sense that I have strong opinions on the subject.

After all, as an evangelical, to be jealous is to be sinful, and money is a gift from God. He gives wealth to whomever He wills, and he allows poverty for whomever He wills. To whom much is given, much is required. And to correct the commonly mis-spoken proverb, money isn’t a root of all sorts of evils, it’s the love of money.

But hey – don’t give me all sorts of grief about my suspicions about the super-wealthy and how they got that way. Bill Gates, the planet’s wealthiest person, cobbled together his wealth in part by forcing competing software developers to sell out to Microsoft. Most Wall Street financiers make their money by selling other people’s money, which might not be as bad as it sounds if they weren't so sneaky about it. Just because certain ways people make money may be legal, that doesn’t make them moral. Or even good for society in the long run.

In yesterday’s blog, I commented about the senior executives at American Airlines who have already been paid out millions in bonuses while rank-and-file employees have yet to be repaid what they gave up to help keep the airline from filing bankruptcy. I’ve also groused about executives of companies who fight environmental controls because they’re a drain on profitability (and compensation). I’ve even had the temerity to blast the movie character, Gordon Gekko, by saying that greed is NOT good.

If you didn’t know me any better, you’d say I was a liberal, fascist, communist redistributionist.

But you’d be wrong.

Wealth Itself Isn't the Problem

I don’t begrudge anybody an honest day’s pay for an honest day’s work. I don't begrudge the fact that for some people, an honest day's pay is more than it is for others. I don’t begrudge somebody with a great idea the opportunity to make money off of that idea. I don’t begrudge people who assume significant responsibility for a venture the opportunity to be rewarded for their efforts and expertise. I don’t begrudge heirs to a fortune the right to inherit what their parents leave behind.

Indeed, I believe an entrepreneurial system is an efficient way to help foster creative thinking, find effective solutions to vexing problems, and generally “raise all ships” as a rising tide of wealth gets dispersed throughout an open economy. At its best, capitalism rewards good ideas, nurtures competition to find better answers, and blurs social barriers that might otherwise deny people with tenacity the opportunity to participate in financial success.

For the most part, the United States has enjoyed a pretty good run at economic development with capitalistic theory at the helm. At its worse, however, capitalism has fallen prey to the same insidious cancer that destroys any socioeconomic system: greed.

I’m not going to re-hash the lessons from history that we’ve all heard before: the Soviet Union, the Great Depression, etc. What seems to happen, however, is that as periods of economic calamity fade into history, newer crops of eager beavers set out to prove they can make greed work.

And as we’ve seen yet again in the past couple of years, some people just can’t handle money and their thirst for more of it. Unfortunately, these people are the ones that bring everything falling down on everybody else.

One of the significant problems with this cycle of boom and bust is that people don’t learn their lesson. Because industries don’t voluntarily regulate themselves to safeguard against abuses, because investors can’t control themselves and enslave themselves to due diligence, and because everybody wants a bigger share of the pie, the inevitable crash makes government think that a new layer of laws and oversight will fix the problem. Unfortunately, all new layers of bureaucracy do is provide even more loopholes and encourage greater risks, and eventually, the cycle is back in full swing.

Does Greater Wealth Mean Greater Contentment?

Have you heard the phrase, “be thankful for what you have”? Maybe the concept of contentment won’t do much for building a dynamic economy. But which does the Bible call believers to do – be content or acquire wealth? Here again, wealth itself isn’t the problem, but the greed for it.

Hoarding wealth can be another manifestation of greed. Doesn’t the value of money lie in what it can buy? Some people say they need to hoard their money so it will produce even greater returns through compounding yields. That may be fine to a point, but when your portfolio starts looking like the national economies of small countries, maybe you should re-think your priorities.

No matter how much it is, if you don’t “redistribute” your wealth yourself, eventually, somebody else will do it for you. Sooner or later, the real costs for what is bought, sold, and held in a nation’s economy need to be paid so everyone’s books balance. By taking care of these matters along the way, the prudent person can earn their money, enjoy the fruits of their labor, and better control what happens to it.

The other day, I read where, in light of Wall Street’s recent volatility, a significant number of small investors are pulling their money out of the stock market and reinvesting elsewhere. Some analysts say that brokerage firms might find themselves back with only institutional investors who actually know now the game is played. As one jaded investor who’s lost about $700,000 commented, he’s giving Wall Street back “to the crooks who run it.”

Now, I wouldn’t call them “crooks” myself… I’m more open-minded than that!

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