Richer than Croesus?

April 27, 2008 9:48 AM

The Sunday Times have published the 2008 edition of their annual Rich List. The full list of the 1000 wealthiest people in Britain is not online yet but they have published a list of the top 150 (pdf). So now you're richer than Croesus what do you spend your wealth on?

Not apparently on Updown Court the most expensive house in Britain, which despite being a very reasonable GBP 70 million is still unsold since going on the market in 2005. And not on prostitutes if the Duke of Westminster has learned his lesson since last year.

posted by electricinca (28 comments total)

The problem is that a 103-room house built in 2000 just sounds like a McMansion.
posted by Mr. President Dr. Steve Elvis America at 9:55 AM on April 27

I think I will spend 50,000 dollars to take my friends to Miami.
posted by Lord_Pall at 10:12 AM on April 27 [1 favorite]

So now you're richer than Croesus what do you spend your wealth on?

I'll tell you what I'd do, man: two chicks at the same time, man.
posted by jonmc at 10:18 AM on April 27 [6 favorites]

It is interesting to see valuations like that on fortunes made from old-economy businesses.

How hard is it to rise to the top in the Steel mafia?
posted by b1tr0t at 10:24 AM on April 27

So now you're richer than Croesus what do you spend your wealth on?

If I may be pendantic on my favourite topic, income is not wealth. Wealth is either assets (savings, investments, real property, etc) or goods that satisfy human needs and wants.

The truly wealthy live their lives funded from only a portion of the income that their assets throw off. Indeed, that is my personal definition of "Upper Class" -- able to live comfortably without needing any wage income -- ie. productive contribution to society -- to make ends meet.
posted by tachikaze at 10:51 AM on April 27 [4 favorites]

goods that satisfy human needs and wants

like two chicks at the same time, man.
posted by jonmc at 11:00 AM on April 27 [2 favorites]

If I may be pendantic on my favourite topic, income is not wealth. Wealth is either assets (savings, investments, real property, etc) or goods that satisfy human needs and wants.

I don't think anyone conflated the two.

able to live comfortably without needing any wage income -- ie. productive contribution to society

How is providing capital not a "productive contribution?"
posted by Mr. President Dr. Steve Elvis America at 11:41 AM on April 27

How is providing capital not a "productive contribution?"

Because when your whole reason for existing is "owning capital", you're basically a leech. You own things and make money not for working, but simply for owning.
posted by Pope Guilty at 11:51 AM on April 27 [2 favorites]

Because when your whole reason for existing is "owning capital", you're basically a leech. You own things and make money not for working, but simply for owning.

I don't know what you mean by "whole reason for existing," so I'm going to ignore that. Feel free to elaborate if you think it was important.

Who is the capital-provider leeching off of, though?
posted by Mr. President Dr. Steve Elvis America at 11:59 AM on April 27

How is providing capital not a "productive contribution?"

It's not a productive contribution, simply because you aren't producing anything. Your capital, through the banking system, may ultimately help someone somewhere produce something, but you yourself are not in any way involved in the production of goods and services. The use of the term 'leeching' is debatable, but clearly the situation of someone being able to live comfortably without working, while others work, is socially suboptimal.
posted by matthewr at 12:05 PM on April 27 [1 favorite]

Incidentally, I think relatively few of the people on the Rich List are rentiers. Perhaps the Duke of Westminster, and some of the ones who inherited their wealth (although many of these are atill involved in running the family firm).
posted by matthewr at 12:18 PM on April 27

It's not a productive contribution, simply because you aren't producing anything.

The contribution of capital is productive, though. Production requires both labor and capital.

Your capital, through the banking system, may ultimately help someone somewhere produce something, but you yourself are not in any way involved in the production of goods and services.

I'm not sure it makes sense to insist that people's labor is "themselves" but people's capital is not. I'm open to being convinced, but you're drawing what looks like a rather arbitrary line.

but clearly the situation of someone being able to live comfortably without working, while others work, is socially suboptimal.

This is not at all clear to me. Why is it optimal that everyone rely on their labor to subsist? I would note that most people I've met who can comfortably live off their earnings from capital do in fact work, so I'm not sure the non-working capitalist vs. working laborer dichotomy is helpful.
posted by Mr. President Dr. Steve Elvis America at 12:18 PM on April 27

Not to mention that low paid laborers work HARDER, going just by muscular exertion, compared to white collar types who produce and earn more.
posted by Non Prosequitur at 12:21 PM on April 27

One hundred MILLION pounds, and you'd stop at TWO chicks at the same time, man?

You'll never make the big leagues thinking small (man).
posted by crazylegs at 12:39 PM on April 27

The contribution of capital is productive, though.

No, it's not. If I give you £10 of capital to produce some widgets, the end result is that you've produced something and I haven't. The fact that you couldn't have produced the widgets without my capital is neither here nor there; providing a factor of production is not of itself a productive act. Production is the action of creating goods or services. Providing capital to someone else to do this is not production.

but clearly the situation of someone being able to live comfortably without working, while others work, is socially suboptimal.

Yes, I was unclear here. Merely having the ability to be a rentier is not necessarily a social bad (not in the context of this argument, at least). No doubt some of the most productive members of society could easily afford to sit back and live off their wealth. But actually making that choice is a social bad.

To see that this is the case, you just have to compare the situation of a rentier with the hypothetical case where his capital is redistributed across society as a whole. In the latter case, society still has just as much capital and one extra labourer. Average quality of life improves, for two reasons. First, more goods and services are produced because of the increase in labour. Second, the redistribution of the rentier's wealth would be a net positive to society even if no increase in goods and services had taken place, because the marginal utility of income of the masses is far greater than the marginal utility of the income of the rentier.

However, though the existence of the rentier is a social bad, that doesn't necessarily justify doing anything about the situation. Most people would say, for instance, that the state ought not to violate his property rights and forcibly redistribute his wealth, even though that would result in a net improvement in welfare.
posted by matthewr at 12:52 PM on April 27 [1 favorite]

The Sunday Times is plural? I thought one would be enough.
posted by Sk4n at 12:52 PM on April 27

"Herodotus tells us that Croesus was so rich that he had every guest take as much gold as he could carry, upon leaving."

According to this definition, how rich you would need to be in order to be as rich as Croesus would depend on how strong Croesus' guests were, and how strong your guests were.

We will assume for the sake of argument that your average guest, motivated by the intensity of human greed, would be able to leave carrying 75 pounds.

The price of gold currently stands at $887.00 per ounce

Therefore, in order to be as rich as Croesus, you would have to allow every guest to leave with $1,064,400.00.

We will assume that your average extremely rich person has 10 guests per week (being a low level misanthrope rather than an extremely rich person, this is an uninformed guess, since I rarely have guests and never let them leave with money).

At this rate of guests, in order to be as rich as Croesus you would need to part with $10,644,000 per week, or $553,488,000.00 per year.

In 2007, Ron Paulson made 3.7 billion dollars. Based on the above figures, allowing a paltry 700 million for living expenses, Ron Paulson is approximately 6 times richer than Croesus.

Unless he has a large number of very strong friends. Adjust figures accordingly.
posted by crazylegs at 12:54 PM on April 27 [9 favorites]

Most people would say, for instance, that the state ought not to violate his property rights and forcibly redistribute his wealth, even though that would result in a net improvement in welfare.

Violating his property rights would deter the accumulation of capital, there being no guarantee that any capital accumulated now would not be forcibly removed later. Part of the motivation behind frenzied economic activity and the accumulation of excessive wealth would be removed.

Whether that is a good or a bad is something else that could be debated.

Note: I'm not advocating redistribution, just observing one unintended side effect of forcible redistribution.
posted by WalterMitty at 1:00 PM on April 27

I would hollow out a volcano and build my lair there.

But why do I go stating the obvious?
posted by Astro Zombie at 1:01 PM on April 27 [1 favorite]

Didn't we just discover from the recent divorce that The Times's estimation of how much McCartney had was well off the mark?
posted by opsin at 1:13 PM on April 27

You're right that more people working generally leads to greater productive output and since scarcity continues to be a problem greater productivity looks like a good thing for society. Sustainability is important too, so perhaps greater productive output is a social ill and scarcity is not best dealt with by producing as much as possible. You could even argue that wars, famine, plague and ecological disasters are beneficial to society. I wouldn't, because I'm not a monster and I find people charming even if they're underproducing.

Speaking of which, whether or not capital is productive, certain conditions have to exist in order for people to even have jobs where they can be productive, namely someone has to be willing to pay them. Once someone has been hired, if they want to accomplish anything they require all sorts of very expensive items like a place to work, training, equipment, perhaps merchandise et al. Some businesses have even been known to spend more on equipment than they do on people. You could argue that having lots of rich people is a social good because they invest in businesses that employ people and they have more money to buy goods and services in general. This argument is known as supply side economics and while I dislike the implications with regards to government spending, it holds water.

Also, when will the state ever do a better job of spending my money for me than I will? The state doesn't even do a better job of spending my money on other people than I do! While not for profits aren't uniformly great, I'd rather voluntarily give money that would be spent on taxes to NPOs that I know will spend the money well(and not give it to NPOs that will let it go to waste!).

With that in mind, I'd like to plug the Larkin Street Youth Center in San Francisco. I should share that I'm friends with people that help run it. They do a better job at welfare, medicine and education than the US government. I know that there are a lot of MeFites in San Francisco and I encourage you all to volunteer there if you ever feel like doing something productive in your free time.
posted by christhelongtimelurker at 5:04 PM on April 27 [1 favorite]

We will assume for the sake of argument that your average guest, motivated by the intensity of human greed, would be able to leave carrying 75 pounds.

I know what i would do if I was a friend of Croesus...bench press like crazy for a month before dropping by.

Crazylegs, brilliant quantitative analysis of the Croessian implication, Sir!
posted by storybored at 5:35 PM on April 27

Actually what amazes me is someone went to the trouble of coming up with a list of 1000. Isn't 10 enough? Who would be interested in #963 for example?

Also rich is kinda boring. Please send list of 1000 horniest people.
posted by storybored at 5:38 PM on April 27

Please send list of 1000 horniest people.

Couldn't mathowie just send you the MeFi user list?
posted by jonmc at 6:01 PM on April 27 [1 favorite]

Please send list of 1000 horniest people.

Couldn't mathowie just send you the MeFi user list?

There're 70,000-odd of us, it's going to take some whittling.
posted by aihal at 7:42 PM on April 27

I actually like lists of 'richest people'. Sure, the top items tend to be boring since they're either well-known businessmen, or they're the children of very wealthy people. But I love when you get deep into the list and the life stories start being really unconventional and interesting.

As such, the top 10 don't interest me at all, they're just some rich blokes.

As for Updown Court, of course it's still for sale. It's hard to imagine somebody who is simultaneously in the market for a 100 room mansion, yet has no desire to have it built to their own specifications.
posted by Project F at 11:50 PM on April 27

but clearly the situation of someone being able to live comfortably without working, while others work, is socially suboptimal.

Modern science was founded largely by men who had the means to live comfortably without working. Some of them decided that they would seize upon this opportunity to educate themselves and study the world. They were viewed as being trustworthy largely because they had no financial motivation to distort results, as they already had plenty of money.

In my experience, most people with means choose a life that contains significant work and productivity, simply because the type of person who as able to acquire large amounts of capital is generally a person who is unafraid of work.

But even if one decides to focus on that minority of a minority, the wealthy who are interested solely in themselves and do nothing productive, it's still very difficult to identify any measurable harm that they cause, except perhaps an increase in bitterness and envy among those whose primary asset is their ability and willingness to work.
posted by Project F at 12:01 AM on April 28

I'll tell you what I'd do, man: two chicks at the same time, man.

I'd play my trophy wife off against my mistress. More fun than World of Warcraft!
posted by dhartung at 1:24 AM on April 28