The Question of What They Do


As is typically the case, Kevin Williamson’s musings on society and economics are worth a read, although I think he’d have done well to spend a little more time exploring his main theme, which is the question of what “they,” the rich, actually do for their money:

Often, the answer is: They work in finance. The Left, and some of the Right, talks about “financialization of the economy,” or the “FIRE” — finance, insurance, real estate — economy, as though it were somehow necessarily unsavory. (It often is unnecessarily unsavory.) You can kind of see why that might be. I know peanut farmers, and a guy who makes peanut butter, and another guy who sells expensive peanut butter in his chain of grocery stores, but none of them probably makes as good a return on the smushed-peanut trade as does the guy who finances their smooth operations and insures their chunky assets. Money is the one good that’s always in demand (give or take a few hundred trillion Zimbabwe dollars), and so one sort of expects the money business to be pretty lucrative.

What really seems to drive people bats about finance — and what’s behind a great deal of our resentment-driven “inequality” politics — is that same question: “What do they do?” It’s the mysteriousness that vexes people, the sense that there exists in these United States a class apart whose ways and means are alien and incomprehensible.

I don’t know that it’s the mysteriousness per se that raises suspicions, but rather the fact that something mysterious can contain a scam.  If people don’t understand somebody else’s path to riches, it very well may be that the road was paved with unfairness.  The United States has a remarkable level of turnover, whereby families ride up and down the wealth escalators, but there is still a degree to which the system seems rigged such that the economy’s structure ensures more wealth for the wealthy.

My entire life, I’ve heard jokes about somebody’s being the VP of pencil sharpening.  If the answer to “What do you do?” is “I make sure all of the company’s pencils are ready for use,” then a six figure salary seems like a handout.

Unfortunately, the popular misconception is that people in private industry manage the rigging all on their own, without thought to the ability of competition to squeeze those perks of aristocracy out of the system.  If the explanation of a finance job, say, is that the person has a real talent for performing a great deal of research and takes substantial personal risk to ensure that people who invest money actually make a healthy return, then the mystery disappears.

But especially in our post-crisis, post-government-bailout world, that doesn’t feel like the way it works.  Rather, it seems as if the right connections puts privileged people in a position to sip riches from channels created by a corrupt restriction of money’s flow.

  • Rhett Hardwick

    In college, I took a course entitled the “Arithmetic of Finance”. It showed the cost (or profit) in various types of loans. It was in fact simple arithmetic and don’t think it would ordinarily qualify as a “college course”. In a “consumer economy” I have wondered why this is not a required course in high school. Businessmen get it, as shown by the signs reading “We do not accept American Express”.