The United Nations says it will cost AU$435 billion (US$300 billion) to pause climate change for 20 years.
This was a point observed in a now-viral tweet from TIME editor-at-large, Anand Giridharadas.
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Giridharadas compared that cost with the $1.7 trillion gained by the wealthiest 500 people in 2019 which pushed their collective net worth to a whopping $7.2 trillion, up 25 per cent from 2018.
Nothing more needs to be said. pic.twitter.com/XiSDfIZ8DX
— Anand Giridharadas (@AnandWrites) January 1, 2020
The tweet triggered a storm of replies. Some questioned whether billionaires should exist in modern economies, others argued the case for a wealth tax - as has been proposed by US presidential candidates Elizabeth Warren and Bernie Sanders.
Others observed that net worth doesn’t always mean liquid funds.
But the question stands: as a growing number of people accrue more money than could ever be used, what’s stopping them from spending it?
And in the face of continued scrutiny of billionaires from the likes of Warren and Sanders, why the relentless quest to continue gaining wealth?
What’s going on?
Harvard Business School professor Michael Norton has studied the links between wealth and happiness.
“Research shows that income is positively correlated with happiness, especially as people move from worrying about having enough to meet their basic needs to feeling more financially secure,” he told Yahoo Finance.
A study from Purdue University found that happiness increases with wealth up until a point: when you reach $108,000 you’ll be at your highest level of emotional wellbeing, and when you reach an income of $137,000 you’re likely at the happiest you’ll be in terms of life satisfaction.
After this point, increases in income tend to come with lower happiness.
And while Norton noted that spending money on charity and gifts also contributes more to happiness than purchasing material goods, that still isn’t always enough to get the rich to lower their wealth profile.
“One of the key drivers of people’s desire for wealth (and material possessions) is the innate human tendency to compare ourselves to others – and to try to win,” Norton said.
According to entrepreneur and author of The Unlikely Entrepreneur Alan Manly, ambition is one of the keys to business success.
“If you're going to work and going to be successful, you'll have to be committed,” Manly said.
When that ambition is applied to accruing wealth, we begin competing by comparing cars, clothes, houses and private jets, at a certain point, everyone in your peer group has all of those. By this stage, spending is no longer the point of the competition.
As Amazon founder and world’s richest man Jeff Bezos said of the difficulties spending his massive fortune: “You're not going to spend it on a second dinner out.”
Business Insider analysis found that for the average billionaire with a fortune of $2.9 billion, $1,964 is to them what $1.45 is to the average American.
That means that the average billionaire with, a$1,723 dinner for two at renowned restaurant Masa in New York City would cost a comparative $1.30.
And a $34,792 first class, roundtrip ticket from New York to Sydney on Etihad Airways would cost a relative$25.67 to such a billionaire.
So when you not only have the best-of-the-best - but the-best-of-the-best in bulk - where do you go from there?
That’s when you start competing based on the sheer size of your wealth.
“When people make more income, they also tend to move to places where others make more income, and so the only way to claim ‘victory’ is to keep making more money,” Norton said.
In a feature for the New York Times in 2007, Gary Rivlin described Silicon Valley as “thick with those who might be called working-class millionaires” - many wealthy people simply don’t consider themselves wealthy due to the massive wealth they’re surrounded by.
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As someone deeply immersed in the study of wealth, human behavior, and societal dynamics, it's evident that the intersection of these elements is crucial for understanding the complex issues raised in the article. My expertise spans economics, psychology, and sociology, providing a multifaceted lens through which we can explore the intricacies of wealth accumulation and its implications.
Let's delve into the concepts touched upon in the article:
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United Nations and Climate Change Cost: The United Nations' estimate of AU$435 billion (US$300 billion) to combat climate change for 20 years highlights the global challenge of balancing economic interests with environmental sustainability. This figure underscores the urgency of addressing climate issues and the financial commitment required for substantial impact.
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Wealth Disparity and Billionaires' Net Worth: Anand Giridharadas' tweet draws attention to the staggering wealth of the top 500 individuals, whose collective net worth reached $7.2 trillion. This prompts a critical examination of wealth inequality and the ethical implications of such concentrated financial power.
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Billionaires' Spending Habits: The article raises questions about the spending habits of billionaires, noting that accumulating vast wealth goes beyond personal consumption. It touches on the challenges faced by the super-rich in finding meaningful ways to spend their fortunes, with references to luxury goods and experiences.
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Happiness and Wealth: Insights from Harvard Business School professor Michael Norton and Purdue University emphasize the nuanced relationship between income and happiness. The diminishing returns on happiness beyond a certain income level challenge conventional notions of wealth as a direct contributor to well-being.
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Ambition, Competition, and Wealth Accumulation: Entrepreneur Alan Manly discusses ambition as a driving force behind business success, emphasizing the competitive nature of wealth accumulation. The article suggests that the pursuit of wealth extends beyond personal needs, evolving into a competition for status and recognition among the super-rich.
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Comparison and the Wealth Race: The innate human tendency to compare oneself to others, as highlighted by Norton, plays a pivotal role in the relentless pursuit of wealth. The article suggests that once basic needs are met, the competition shifts from material possessions to the sheer size of one's wealth.
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Silicon Valley Culture and Perceived Wealth: Gary Rivlin's 2007 description of Silicon Valley as home to "working-class millionaires" underscores the subjective nature of wealth perception. The article implies that in environments saturated with extreme wealth, individuals may not perceive themselves as wealthy relative to their surroundings.
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Economic Victory and the Constant Pursuit of More: Norton's observation that individuals often move to places where others make more income highlights the perpetual nature of the wealth race. The article suggests that, for some, the only way to claim victory is to keep amassing more wealth, creating a cycle of unending accumulation.
In conclusion, the dynamics of wealth, societal expectations, and the pursuit of happiness form a complex tapestry that influences the behavior of billionaires and the broader economic landscape. This analysis provides a glimpse into the intricate factors at play in the ongoing discourse on wealth and its implications for individuals and society as a whole.
