In: Uncategorized27 Jan 2012
This piece was originally written as a blog post for www.fundweb.co.uk The first and last paragraphs can be ignored by the general reader as they are aimed at the publication’s readers. The more general point, about how even Republican presidential candidates are anxious about prosperity, is of broader interest.
Anyone who advises individuals on wealth management is facing a nightmare that makes the eurozone crisis look like a Christmas panto. Prosperity has become a dirty word.
Those who think this is an exaggeration should look across the Atlantic to the country generally regarded as the bastion of free market capitalism. Then focus on the more conservative of America’s political parties: the Republicans. In the popular imagination, at least in Britain, the Republican party is about as pro-capitalist and pro-wealth as it is possible to get.
But take a closer look at the party’s presidential primaries and it is apparent something strange is happening. Even in these circles being wealthy is often portrayed as “A Bad Thing”. That is even among Republicans themselves rather than what their Democrat opponents are saying about them.
For example, Mitt Romney reportedly told CBS News that Newt Gingrich, a rival Republican candidate, was too wealthy to be in touch with ordinary Americans.
“He’s a wealthy man, a very wealthy man,” Romney said. “If you have a half a million dollar purchase from Tiffany’s, you’re not a middle class American.”
As it happens Romney made an estimated $21.7m (£13.8m) last year while Gingrich had to get by on only $3.2m. However, this disparity only makes Romney’s claim more remarkable as he clearly did not think it through.
Meanwhile, Gingrich has not hesitated from using anti-capitalist rhetoric against Romney. In reference to Romney’s former tenure as the founder and chief executive of Bain Capital, a private equity company, Gingrich talked of “rich people figuring out clever legal ways to loot a company”. Gingrich went on to demand that Romney “give back all the money he has earned from bankrupting companies and laying off employees during his years at Bain Capital”.
Nor is this discomfort with wealth among the wealthy themselves a uniquely American phenomenon. In an exclusive Swiss ski resort, at the annual meeting of the World Economic Forum in Davos, it is estimated that at least 70 billionaires are among those attending a conference bemoaning social inequality. A poll of the delegates showed that income disparity was their top concern.
All this is a long way from what used to be called the “politics of envy” or class warfare. It is not about the poor envying the rich or wishing they could become wealthier. On the contrary, it suggests that even some of the richest people in the world feel uneasy about their prosperity.
There is something fundamentally wrong with a society in which even its greatest beneficiaries feel queasy about being wealthy. If even the rich are so anxious it suggests that this sentiment pervades the whole of society. The politics of envy would be a much healthier reaction.
Of course most people would probably say they could do with more money themselves even if they are unhappy about society as a whole becoming wealthier. But if asked about prosperity in general it will typically not take them long to hear concerns about the environment, greed, happiness, inequality and sustainability.
From this perspective anyone involved in either producing or managing wealth can easily be viewed as tainted. They are guilty by association with those who are seen as responsible for many of the world’s most intractable problems.
There is one way round this conundrum for those who want to be seen as morally wholesome while managing money at the same time. A bit of green branding can make one appear ethical while at the same time working with wealth. Green products may or may not be good investments but, in this perverse climate, they can have the therapeutic effect of making people feel good.
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