The Coming Apart of Wealth and Virtue

In a world where wealth and virtue are anti-correlated, America needs to rethink its story about itself.

Soviet children in the 1930s learned a Story: that Stalin was a wise and good leader.

In America of the 1990s and 2000s, we too learned a Story: that wealth rewards wisdom and goodness.

No one told the latter Story quite as clearly as Ayn Rand, but many told it. Ronald Reagan told it. Al Gore told it. Steve Jobs told it. Your Economics 101 teacher told it: If you do a lot for society you get a lot in return. If you contribute little, you get little. Fair is fair.

The Story insisted: Scoundrels sometimes get ahead and good people hit rough patches, but these are exceptions, not the rule. Sure, the Story doesn’t describe the world everywhere and always, such as in communist countries or in medieval times. But here and now, things are working pretty smoothly, thank goodness, so that the Story is basically true. To deny this is not only to be an ignoramus, but also to be ungrateful, because so much wonderful work has been done—wars have been fought!—to make the Story true.

The Wealth of the Nation, Seymour Fogel, 1938.

Thus, The Story was not only the engine of American self-regard, but also of social harmony. The Story that wealth was a character reference and poverty a verdict made society civil. The Story did not need to be constantly reiterated. It did, however, insist on not being contradicted in polite company.

It is hard to overstate how pervasive The Story was during my early years. I certainly remember wondering whether The Story might have a screw loose somewhere. But I did not buy the full Marxist Story, either. It seemed to have some holes in it. And, though this is peculiar in retrospect, I wasn’t aware of any non-Marxist form of meaningfully pushing back. So I just reconciled to myself to The Story, even though it felt off. From my little window onto the world, it sure didn’t look like the richest were the best amongst us. But, I thought in all humility: maybe I’m missing something. Maybe I can’t quite see the bigger picture. And since I didn’t have a clear better idea for organizing society, I kept most of my questions to myself.

Many millions of other people thought this way too. But a crackup began in 2008.

The 2008 financial crisis made it impossible to suppress certain very simple thoughts which contradicted The Story. And these thoughts couldn’t be dismissed as bad theories, because they were too simple, too atomic, too undeniable. They weren’t theories, they were just observations.

For example: “the people who caused this are not the people suffering from it.” Yikes! How to square that with The Story? Then this: “The 99%”. That tiny phrase captured a thought which, while it may be hard to believe now, was at that time completely verboten, completely outside the Overton window. I remember the impression it made on me when I first heard it in 2009. It felt like a breath of cool air in an too-hot room. It felt the way I imagine it probably felt to hear Voltaire make a piercing joke about the King at a dinner party in the 1780s. For better or worse, it just landed.

In the 2000s, any questioning of The Story—of a growing pie, universal progress, and a rising tide—was considered the very summit of discredited economic illiteracy. So this little phrase, “the 99%”, while it has lost its punch today, was in those days incredibly cheeky, radical, undeniable. It asserted that the 99% was, first of all, a set of people who existed. Second, their interests might not be served by genuflection to the 1%. And third, their interests mattered. Their interests might even, banish the thought, matter more than the interests of the 1%. They might even matter 98 times more. What a concept!

Why did 2008 unleash this? Because in 2008 it was obvious that the financial crisis, whose ill effects fell entirely on the poor and the middle class, had been caused by exactly the people whom the market was rewarding, and who were nicely insulated from having their homes foreclosed, their careers derailed, and their retirements destroyed. Who were these people? They were Finance People. Respectable people who fought for good grades, filed into prestigious offices each morning, and, once inside those offices, did skillful and advanced things involving Mathematical Formulas and Very Complicated Spreadsheets—things that everyone, really, ought to be glad that they were doing, but that most people, bless their simple hearts, just don’t understand.

But the things Finance People did in those offices were, everyone could now see, obviously wrong. Not inefficient or mistaken or misguided. Morally wrong. Harmful rather than helpful to society, and in ways that were or ought to have been obvious to the responsible parties. It suddenly became possible to say this out loud without attracting a condescending avalanche of pettifogging talking points. Finance People did not deserve to become rich for what they did. They deserved, if anything, quite the opposite.

As the 2008 crisis settled into the early 2010s, the financial professions settled back into a kind of mild disrepute. The anger of 2009 faded, but the industry never regained the teflon sheen that it maintained from the 1980s to the 2000s. Too many people saw it as contradicting the Story, and therefore carrying a tarnish.

Yet the Story had to go on.

It moved on to Tech.

Let’s rewind to 2008. Tech People, unlike Finance People, weren’t obviously greedy. They didn’t have slicked-back-hair or tailored suits. They were nerdy, unthreatening, and, where the Finance People had always been a bit rough and “realist” — the Gordon Gekko archetype had long been established — the Tech People were distinctly “idealist”, and even defined themselves largely in contradistinction to Finance People’s cynicism. So the Story, like a stressed-out houseplant, was lifted from its old pot and transplanted into Tech, where it found high concentrations of fertilizer and, initially, thrived.

The rest is history. The great river of MBAs and whiz kids with big brains and small hearts simply re-routed from Wall Street to San Francisco. And in the fullness of time the Story unraveled there too, with even greater comprehensiveness and fury than it did in 2008. It has to be said that many of us saw this coming, and got called bummers and Cassandras, and felt fairly lonely, as the world breathlessly and baselessly insisted that Silicon Valley was saving the Story. Some of us are owed a beer or two. But never mind.

What we are left with now is No Story.

In America, having No Story is dangerous. What it means is that the ordering principle of American society, which is something like, “Those With Money Call The Shots”, now seems completely without moral justification. In a No Story world, Those With Money must be presumed to be worse than others in their judgment, their fitness, and their deservingness of leadership.

America is anti-aristocratic. Our founding myth has to do with throwing off the inherited monarchy, and replacing it with some kind of meritocracy or do-ocracy, where people earn their wealth-cum-power instead of having it handed to them. And if this is not moral progress, then it is hard to see why America is better than Not America. It is hard to see why George Washington, not King George, had the mandate of heaven.

But here is how things look in the America of No Story. Acquiring wealth, at least beyond the level of middle class comfort, ceases to be an indicator of virtue. Possessing unusual wealth becomes presumptive evidence of moral turpitude—because the usual ways to “earn” unusual wealth are to participate in financial or technological power accrual schemes, which are, more often than not, on thorough examination, not good, but actually bad. Thus, today, people with unusual wealth must rebut a moral presumption against them. They may do this, inter alia, by pointing to having inherited it, which is, while not a virtue, is also not a sin. Which brings us back to King George.

With No Story, America does not make sense.