[FRIAM] What is Wealth for?

[Eric Charles]

What is the function of wealth? Most of the discussion above is about it's
function for the person who has it, but I think about this a lot in terms
of wealth's function for society. If I had to define social class, it would
be based around the benefit society should receive from having a healthy
middle class, and that is entirely dependent upon wealth (not income).

Lower Class - The lower class lacks significant wealth relative to
their expenses. Their ability to stand up for themselves is miniscule,
because one or two missed paychecks will wreck their lives.

Upper Class - The upper class has sizable wealth, relative to their
expenses. They have so much wealth that they could quit out of the
socio-economic game entirely and be just fine. They could not work again
ever, or at least last many, many years without doing so. They could start
a business, run it however they felt like, and if it never made money, had
some loss, or even went bankrupt, they could simply continue living off of
other wealth.

Middle Class - Between those extremes you have people with enough wealth to
take a stand, but not enough wealth to check out of the game. A middle
class person can, when told to do something they consider immoral, or even
sufficiently unpleasant, quit their job and spend some time looking for a
new one without worry. Is your boss abusive? Are work conditions
unpleasant? Were you asked to break the law, or look the other way while
others did? Is your company starting to abuse or take advantage of its
customers? You can refuse to take part in it. You might quit, you might
make them fire you. Either way, you can use your power as a
moderately-wealthy employee to push back against your employer. When the
middle class is small, that does something, but not a lot, because the
corporation can turn to the lower class as needed to fill positions. When
the middle class is large, this has a *huge e*ffect on how
workplaces operate (and this is why working conditions are better in
industries dominated by middle-class skilled labor).

I tend to think of the boundary conditions there as a cushion of between
6-months and 3 years. But you could certainly stretch that a bit. And note
that this definition scales with cost of living. If you make $500,000 a
year, but you would lose your house without the next two paychecks, you are
functionally lower class, and your company will figure out how to abuse you
as such. If you make $30,000 a year, spend every penny of your paycheck
every month, but are quite happy with your current living conditions and
have $30,000 in the bank, you are solidly middle class, and it will be
harder for a boss to abuse you.

The *function *of a middle-class wealth is to organically do a huge chunk
of the things we keep ineffectively trying to get laws to do. It reduces
workplace abuse. It allows people to pursue things they are passionate
about. It reigns in industry excess. It encourages more moral corporate
action. Etc. If we wanted to accomplish those things, and we wanted to
accomplish them through law, we would focus primarily on figuring out how
laws could encourage savings*, and we would make moves to at least slightly
reduce compulsive consumerism. Once you have a large middle class,
companies would not be able to survive without accommodating the ability of
middle class people to refuse unreasonable requests, and society as a whole
will benefit.

<echarles at american.edu>
*  Not weird 401K-style stock-market investment schemes with penalties if
you try to touch the money early; regular, old-fashioned, savings. Bank
account money, home equity, maybe a share in Cousin Steve's tree trimming
business, cause you helped him get started.

On Fri, Mar 19, 2021 at 2:02 PM jon zingale <jonzingale at gmail.com> wrote:

> so freaking cute.
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