Is prosperity bad for our wealth?

It occurred to me recently that too much prosperity may blunt a person’s ability to make decisions, and that paying senior executives too well may render them incapable of making a choice and abiding by the consequences.  This is a new twist to the argument that senior executives are paid too much.  Every other argument boils down to the childhood wail that it isn’t fai-ai-ai-air.   Me, I don’t give a toss what senior executives are paid so long as they make good decisions, but I’m coming to wonder if prosperity’s bad for our wealth.

If you have to budget and juggle finances, my theory goes, then you learn two very specific skills:

  • the first is the art of deciding which option is best since you cannot have them both
  • the second is the art of getting your children to accept that they cannot have something just because it’s shiny.

Likewise, if you grew up in a household where you could not have everything you wanted the moment you saw it then you learn that doing without is actually ok and that deferred gratification is in fact more gratifying.

This came to mind in a discussion with a friend about his frustrations at work.  He has spent the last 18 months trying to introduce working practices which senior management say are worthwhile; for simplicity’s sake we’ll call them ‘weeding the garden’.  However his senior managers won’t back up their verbal support with actions and won’t order their their minions to stop doing other things which are either more exciting such as building the patio or more familiar such as mowing the grass.  As a result, none of them are putting any time weeding the garden.  My friend is going spare with frustration and he said to me “I don’t mind if the bosses back it or kill it, I just want them to make a bloody decision.  I wouldn’t mind but times are hard and getting harder and it’s pissing money away to go off half-cocked like this”.

It is this attempt to have the cake and eat it, this failure to make the choice and abide by the consequences, which I think may be the result of too much prosperity.  If you live on a budget then you learn to make choices and abide by them. You learn to think about and understand consequences.  You learn that you have to live with trade-offs.  You learn to choose between laying a patio, mowing the grass and weeding the garden because you haven’t got enough people to do all three.

You learn other skills and attitudes too.  You learn that lowering your sights may not mean lowering your standards and clean your carpets instead of replacing them.  You learn to make trade-offs and how to communicate them when you tell your kids it’s a balloon or an ice-cream but not both.  You learn to prioritise what you want because you cannot have it all.

You learn, in fact, to do what senior executives are paid to do which is to make choices and follow them through.  So you make the tough choices and announce that we’ll all have to live with grass that’s mown once a fortnight instead of once a week, you decide to put in decking instead of a patio, and then you use the money you’d have spent on sand and cement to train a couple of super-weeders who can then train the others on the days when they would have been mowing the lawn.  And you face up to the unpleasant discussions afterwards and actually deal with the complaints of the patio-buidlers and those that like bowling-green lawns.  But if you’re not used to making trade-offs and getting your family to live with that reality then you tell everyone who comes by that their particular activity is ‘very important’ and that you ‘support it at the highest level’ and feel nice and powerful when they go away.  But you don’t actually make the changes necessary to turn your words into truths.

This isn’t an argument for reducing the pay of senior executives because this isn’t some parallel universe prescribed by the Daily Express and the Daily Mail.  It isn’t even a rose-tinted re-write of the issues of real poverty.  It’s an awareness that the tough times that are on their way for most of us will, as tough times always do, very rapidly sort out the lean from the fat.


4 responses to “Is prosperity bad for our wealth?

  1. This is a good argument and I agree with your general ideas on prosperity. However, I have met a few business owners who grew up in poverty and, rather than giving them a sense of frugality, their windfalls of success led them to spend in an unrestrained and inefficient manner. At least for these individuals, they had not learned how to manage their wealth nor how to plan for contingencies. Perhaps this is why so many famous people go bankrupt early in their career…they spend beyond their means without preparing for the future or leave their finances in the hands of a manager who takes advantage of their naivety. So, as a counter argument, perhaps it is the lack of gratification (either personally or professionally) followed by a sudden illusion of bottomless resources and opportunity that creates the behavior you write about? In either case, the end results are the same…executives who are not able to make decisions or rein in bloated projects.

  2. I was aware when I wrote this that I’m talking about a relatively genteel lack of prosperity. (Today I’m not going to be buying a knife-block or a new bra because I am going to be buying some black paint, some curtain tape and some butchers’ hooks.) If you come up from being dirt poor, then I guess you never have the luxury of making a choice in the first place, because you can’t afford any of it.

    Thanks for reading, and thanks for commenting Folkrockgirl.


  3. Danny Whitehead

    I think it’s important to stress the point that you make in the last comment – that the luxury of being able to choose is not one shared by all.

    I work in Sub-Saharan Africa, and I’m quite sure many here would like the problem you describe as too much prosperity. As someone once said, a fortune in money might not make you happy, but I’d like to find out for myself.

    Often, I think the fact that those in poverty do not have choices – i.e. have a ‘simpler’ life unconstrained by, for example, new bra vs butcher’s hooks dilemmas – is romanticised by some of us who do have the luxury of choice. This is oft characterised in fiction (particularly on film) by the myth of the ‘fallen’ exec. who gives up everything (or has it taken away)and yet finds happiness in simplicity. Dan Akroyd might be able to find Jamie Lee Curtis (the hooker with a heart, another much vaunted Hollywood myth) and true happiness at the bottom of his dip into poverty, but most find malnutrition, inadequate shelter, and a general lack of compassion. Jarvis Cocker sums it nicely in Common People.

    I think that the heading is right – too much prosperity (in the hands of few) is bad for our (humankind’s) wealth. So I’d say it is an argument for reducing the pay of senior execs. Wealth inequality is the greatest challenge we face, in my humble opinion, yet no-one wants to vote for their own pay cut … not even if it might bring them closer to their idolised valhalla of simplicity poverty…

  4. The confusion of poverty with simplicity is one of the most pernicious ideas there is because, as you say, it romanticises poverty. There is a huge difference between choosing to do with out and having to do with out. It doesn’t hurt, for a start. It doesn’t involve bitterness, jealousy and feelings of impotence.

    Years ago I came across the idea that most people want about 20% more money than they have right now. So, so long as you have some money, someone somewhere would be delighted to have what you have got. I may have to choose between a new bra or some butchers hooks, (so far, neither, actually), but I can pay my bills, and I remind myself every time I see something shiny I cannot afford that I can pay my bills without worrying which is a privilege and a luxury in this society.

    Many years ago Katherine Whitehorn’s argued you should give kids huge amounts of pocket money, but make them buy everything with it, including school uniforms because that would teach them that money is to buy boring and nasty things as well as for fun. I think that only works if you let your kids make the choice between new or second hand.

    As I said, if you are in grinding poverty then none of this works. This is about learning to make choices and that only works if you can, like me, cover your bills.

    Thanks for commenting Danny

    PS – I don’t know about tarts with hearts but I suspect that is another sanitisation of a much more scary proposition, tarts with brains. See the links to the left in the section ‘working boys and girls’.

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