The utility of wealth

Ubiquitous upward economic mobility is a flawed goal because wealth (and ambition) does not have the same utility for everyone.

The New Yorker (where James Thurber got his start) is still one of those places one can go to to think. I was browsing it this morning and found this article titled “The Mobility Myth“. The author suggests that we have never really been economically mobile and that, instead of trying to figure out how to make society more upwardly mobile, we should focus on raising the minimum standard of living.

I agree with the author’s overall statement. I have never quite liked loud arguments that we fix our skewed income/wealth distribution by chopping off the upper tail. The income equality argument has always struck me as jealousy in disguise. If there are a few people, like Judge Judy, who earn 500x more than Joe the mail man, I don’t think we are gaining that much by knocking down Judge Judy’s take home pay. I like rich people: they pay for my subway (though, often, they don’t and that is shortsighted).

I do think that we should make sure that Joe and his family gets affordable health care and his kids can go to an affordable school, where the teachers are engaged enough to make sure students stay in school and pass the requirements. By affordable, I mean that Joe and his family don’t have to make a choice between paying for health care and eating, or living in a safe neighborhood, or getting an education.

After such things are taken care of, I don’t think it is society’s business what Joe’s kids do. Upward mobility is often taken to mean that our kids will be richer than us. I’m not sure we asked the kids if they wanted that. It is taken as granted that the sole meaningful metric of personal progress is how much wealth an individual accumulates. Under such a metric society has failed if Joe’s kids end up in a lower (or even similar) economic bracket as Joe. This metric tells us that, if Joe’s kids become Postal workers or plumbers, society has failed (with a hint that Joe and his kids have failed too).

I think it is important to consider here that a person’s attitude towards wealth – material possessions – is shaped by the environment they are in. If Joe likes being a mailman, and if Joe’s family is happy with their lives it is likely (though not certain) that Joe’s offspring will be content to have what their parents had.

Many people would consider this a lack of ambition, and some people would say this is a vicious cycle, where Joe’s children, not having a role model for themselves besides Joe, never pushed themselves out of Joe’s socio-economic bracket. I might have agreed, a decade or so ago. But now, I rather think that Joe’s offspring have understood the meaning of life, which is to find what makes them content and to share that, if possible.

The feeling of being content is hard to measure, often even by ourselves. It’s not as spectacular as happiness, and it sounds so unambitious that it’s embarrassing to even study it so it doesn’t get measured. But I think, if the goal of society is to reduce the unhappiness of the population as much as possible, we should pay attention to the disparity of contentment – satisfaction with life – which is the goal, rather than wealth, which is only one of the many, many partial predictors of contentment.

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