I recently stayed in an incredible house—a high-ceiling, high-quality, high-tech, mansion-type property that isn’t even in my wildest dreams to ever own. No matter how well I do in my working life—plus my parents’ inheritance on the sad day they die, plus bitcoin doing its things in rearranging the monetary premia of the world—I’ll never land in this astonishing villa.
This isn’t a story of generational inequity and how young people like me were disadvantaged by central banks and a vicious tax and zoning regime—that obviously hasn’t helped anyone, but the benefactors of the Cantillon effect. No, this is a story of values, wealth, and humility.
The couple who owns this house was definitely assisted by a property market that, for decades, propelled their net wealth upward and upward, in what will one day be considered the worst wealth redistribution scam of our age. To that, they added two successful, high-paying careers, a bit of inheritance, a few houses renovated and flipped into an increasing housing market and—voilà—here we are: a 3,500-sq feet, all floor-heated ceramic tiles, two large beds and baths, a grand back yard, an outside hot tub, a TV wider than my arm span, six cars, and a garage the size of my (rental) apartment.
As these things go, wealthy people in large houses live next to other wealthy people in even larger houses. By comparison, it turns out that my friends’ flashy home isn’t even that excessive compared to some other ones in the neighborhood. There’s always a greater fish.
What was most stunning to me wasn’t the difference in wealth between them and me, but how little it mattered to me. I have no aspirations to live in such a grand, stunning house. Moreover, it was shocking how quickly life here became quotidian—eat, sleep, work out, bathroom breaks, play chess on my phone. The human universals are the same.
A few days into my stay in this extraordinary, ostentatious house, what occupied my mind wasn’t the fancy furniture or wonderful views, but once again the goings-on in my own life. Sitting on the wooden patio outside the large floor-to-ceiling windows overlooking the mountains, it occurred to me that the material comforts of a person’s life really don’t matter that much—at least not to me. This house is—by market value at least—some 15 times better than the home I live in, but I find myself enjoying it roughly the same (with its roomier and open space, outdoor pool, and fancier equipment kitchen appliances, perhaps 20-50 percent).
Ameliorating this lesson in humility and subjective value is the value of sacrifice. When you drive to a scenic mountain lookout, the view is much less impressive than if you do the hard work of hiking the steep slopes to get up there. Perhaps I would have appreciated the amenities of this beautiful home more had I been the one putting in the hard work and overtime at my daily grind to acquire it—perhaps even thinking that I was deserving of the market up-valuing my assets.
My life and work and the things I build every day, exist largely in cyberspace. (Perhaps that’s not coincidental for my generation.) Even my closest friendships and family relations are, for most of the year, mediated via screens or phone calls, being as how we live scattered across the planet. It shouldn’t come as a surprise, then, that material comforts sit lower on the rung of priorities for those of us who grew up in the globalizing age, with tech our second-in-command, more often producing value online than offline—while being squeezed out of most property markets.
Don Boudreaux, professor at George Mason University and long-time economics educator, wrote a real-life reflection (“Can You Spot the Billionaire?”) on wealth inequality over twenty years ago now, and I’m frequently reminded of his excellent observation in that piece. A literal billionaire had been in the audience at a GMU seminar, making the local Gini coefficient go through the roof; Boudreaux—having been told about this gentleman’s financial status only afterward—was surprised at how non-obvious it was:
It’s true that Mr. Bucks [the name Boudreaux used for the billionaire] likely paid much more for his clothing, jewelry, and grooming than the graduate student did, but such expense is barely visible to the naked eye…. The reason he was not distinguishable as a billionaire had nothing to do with his own appearance; it had everything to do with the appearance of the other 25 or so people in the room. Everyone was as well-dressed and groomed as he was.
The extreme wealth—the “nice things” that others have—don’t matter that much. They practically don’t make that much difference to a modern person’s life: driving to the store in a flashy BMW took me there just as comfortably and effortlessly as a budget Kia. It felt better to drive a nice car, the engine was more powerful, everything responded quicker, and it was more beautiful to look at in the parking lot. But so what? Nothing else changes: After parking it, I still walk into the same store and buy the same groceries everyone else does.
“Most Americans have no idea just how unequal our society has become,” ranted Paul Krugman—the archnemesis of freedom—in a decade-old New York Times column titled “Our Invisible Rich.” Intended as a way to rally the troops for how bad American inequality really is, it has the opposite implication: it can’t be that bad if we literally can’t see it. If we don’t know about the extreme wealth of another, and the way we live life is roughly the same, then how is wealth inequality supposed to “harm” society?
Boudreaux remarked that obsessing over a society’s wealth inequality on paper is “to unwisely elevate ethereal abstractions over palpable reality.” Indeed, “in many of the basic elements of life, nearly every American is as well off as Mr. Bucks.” It is worth keeping that in mind next time you see a flashy car or the extravagant lifestyle of this or that person.
