Several years ago, a business meeting took me to the home of an honest-to-God Wall Street billionaire, the first such member of that exotic caste I had ever personally encountered. The home was comfortable and well-appointed, but it was in most ways a domicile with a distinctly middle-class feel to it. The children, who were still quite young, were given chores to do, and they were taken to school by their parents, not by a chauffeur. There was no live-in domestic staff, no Rolls-Royce Phantom, no Donald Trump–style 24-carat-gold fixtures.
Because my curiosity is more powerful than my sense of social propriety, I inquired, as obliquely as I could, about my hosts’ apparently modest sensibilities, and they explained that they were making a determined effort to conceal from their children as long as they could how wealthy they were, in order not to sap their ambition or distort their sense of social place. I thought that this was an admirable plan (and one that would be executed more perfectly if they were to acquire a print of dogs playing poker to replace the Matisse hanging in the living room).
There are many competing definitions of “rich,” and they usually involve a percentage: the top 10 percent, the top 5 percent, the dreaded 1 percent. My own definition is the point at which the marginal utility of an additional dollar for personal consumption and investment is effectively zero. I think that this is a good definition for a couple of reasons: One, because people have different preferences, that point comes at very different wealth and income levels for different people, which is why there are so many people of relatively modest means who dedicate some non-trivial portion of their incomes to charity rather than to their own personal desires. Second, it accounts for the fact that while the value of an additional dollar for personal consumption may be zero, the value of deciding for one’s self how any additional dollars are to be disposed of is not
zero. That is why there are so many people who work diligently to minimize their tax bills while giving away millions or billions of dollars to charitable ends. The position is not, contra the protestations of our progressive friends, an inconsistent one.
The Fitzgeraldian rich — “different from you and me” — are indeed a class apart, though the history of modern capitalism is one of making membership in that rarefied grouping much more democratic than it ever has been. What was within living memory a class in the true sense of that word — aristocrats and heirs and the odd movie star — is today an aggregate that contains relatively few people whose economic talents consist of choosing their parents wisely and a great many more formerly middle-class manufacturers of plumbing fixtures. During my last year in college, I was very excited to be taking my first first-class flight, attending a film junket for Miramax. (There is not very much money in writing movie reviews, which is what I was doing at the time, but the side benefits are occasionally excellent.) The man next to me was very friendly, and as we talked I learned that he was retired, though he seemed very young to be retired, and was traveling from his home in Florida to his other home, in Manhattan. Because (see above) my curiosity is more powerful than my sense of social propriety, I asked him what he had done for a living that allowed him to be sipping champagne in first class at an age when most men still are working, and he answered: “I was a chimney sweep.” What followed was a memorable story about his beginning his career as a chimney sweep in New York City and later launching his own chimney-cleaning company, which grew into a company involved in all manner of fireplace-related commerce. When his interest in his business began to wane, he sold the firm and retired.
Anecdotes are easy to dismiss, but empirical studies are another thing, and the facts about the rich present a picture that is fundamentally different from the cartoon we get from the Left, which presents the so-called 1 percent, which is a statistical abstraction rather than a group of actual human beings, as a hereditary economic peerage, with millionaire families handing down enduring fortunes for generations like a family pew at Appleton Chapel.
Professor Mark R. Rank of Washington University, co-author of Chasing the American Dream: Understanding What Shapes Our Fortunes, tells a different story in a review of his own and others’ research in last Sunday’s New York Times. Far from having the 21st-century equivalent of an Edwardian class system, the United States is characterized by a great deal of variation in income: More than half of all adult Americans will be at or near the poverty line at some point over the course of their lives; 73 percent will also find themselves in the top 20 percent, and 39 percent will make it into the top 5 percent for at least one year. Perhaps most remarkable, 12 percent of Americans will be in the top 1 percent for at least one year of their working lives.