How to Be Wealthy

Recently graduated from university and starting his professional career, Michael Oberschewen wanted to clarify his ideas about wealth. What did a mature relationship with wealth look like? What did it even mean to 'be wealthy'? And is our society's understanding of wealth the most evolved version possible? For help with these questions, he turned to some great minds of the past - Aristotle, Andrew Carnegie, and John Ruskin. What he found was a nuanced and enlightening disagreement.

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What is Wealth?

Our fascination with money, and more fundamentally what it represents, is age-old. Though it appears a simple enough topic on the surface, prominent thinkers have occupied themselves with understanding the nature of wealth for ages; the subject is much more evasive than meets the eye. 

Our modern notion of wealth is deeply associated with purchasing power, one’s capacity to consume. The more purchasing power one has, the 'wealthier' they are. The formula is simple.

Obtaining wealth is a function of productivity - those who produce more marketable things are rewarded more handsomely by the marketplace. 

And there is an ethical philosophy wrapped around it. Though things have changed over the years, the culture of work ethic in America continues to indict those who fail to accumulate purchasing power; if you cannot accumulate enough to obtain the material necessities of life, you are probably failing to become a productive member of society, and hence your discomfort is justified. 

The prevailing wealth framework shapes the aspirations of the young, talented, and ambitious. It influences how we think about status and social norms, which deeply impacts mental health and social policy in turn. 

Our modern understanding of wealth, and of what it means to be 'wealthy', shaped by the cultural forces of American consumerism, is not the only possible understanding. 

Begin With the End in Mind

Aristotle was influential in shaping the Classical understanding of wealth. He wrestled deeply with the subject in his treatise Politics.:

 “…true wealth consists simply in a number of instruments suited to the purposes of a household or a State.” (Politics, Book I Part VIII)

For Aristotle, ‘true’ wealth, or 'natural’ wealth includes all items that are useful. Most importantly, it is that which enables you to effectively fulfill your personal telos. Your telos includes your role in service to the larger whole – householder, statesman, or servant - and must take you towards eudaimonia, or the sense of fulfillment which is the telos of all human beings. To be 'wealthy', then, is to have enough. Enough to achieve your purpose, and the will to make use of your wealth to do so. 

The specifics of what constituted true wealth varied across classes and families. True wealth was particular to an individual’s circumstance and unique set of purposes. Comparisons of wealth between people were to be made on the basis of how well equipped they were to fulfill their telos, not on how much raw purchasing power they had. 

Aristotle suggested his own ethics related to wealth accumulation as well: 

“Of the art of acquisition then there is one kind which by nature is a part of the management of a household, …must either find ready to hand, or itself provide, such things necessary to life, and useful for the community of the family or state, as can be stored. They are the elements of true riches; for the amount of property which is needed for a good life is not unlimited,” (Politics, Book I Part VIII)

“There is another variety of the art of acquisition which is commonly and rightly called an art of wealth-getting, and has in fact suggested the notion that riches and property have no limit. Being nearly connected with the preceding, it is often identified with it. But though they are not very different, neither are they the same.” (Politics, Book I Part IX)

While true wealth is determined by telos, the means of acquiring and managing it can be natural or unnatural. When a household acquired various useful instruments, through effort or exchange, to achieve ends that were necessary to sustain life and useful for the community, it was considered natural and healthy acquisition. However, when wealth, in the form of useful instruments, was exchanged simply for the purpose of maximizing money, Aristotle saw this as a distortion of the use of wealth. Any form of money begetting money or seeking value from unequal benefit is considered an unjust exchange, as it is “carried beyond the point of satisfying mere requirements.” 

When the trader seeks the highest price possible rather than what is fair to satisfy both parties, they willingly deprive the buyer of their resources for the purpose of acquisition alone. Justice is lost in the exchange, and the acquisition of wealth becomes disconnected from telos; the trader’s ultimate purpose is obscured in favor of financial accumulation. When used as a tool for further acquisition, money’s natural purpose as a means to an end is malformed into a non-flourishing end in itself.

For Aristotle, the householder who was happy in his work, employed in a useful profession, with sufficient wealth to sustain his family and fulfill his duty to the state, was truly wealthy. 

Aristotle’s influence on Western notions of wealth lasted for centuries beyond his life, influencing minds like Aquinas in the 13th century. But during Aristotle’s time, change happened slowly. People were fixed in rigid social hierarchies and the various professional arts were so stable that they seemed to be set by the laws of nature themselves. There was the shepherd and the farmer and the sculptor and the soldier, and their methods were the same from generation to generation.

Aristotle’s rigorous ethical demands would indict much of our modern capitalistic system. Could his ideas survive in our time of mass technological disruption and social mobility?

A New End for Wealth

Efficient mass production made the industrialists of the 19th century very powerful. Their authority on matters concerning the state and political affairs became more respected than ever before, and their newfound influence caused a shift in cultural attitudes surrounding wealth. The wealth disparities it created sowed the seeds of deep social unrest. Industrial processes created a divide between the working and owner classes. Andrew Carnegie, one of the foremost industrialists of the time, recognized the festering problem and attempted to offer a new philosophy of wealth that could ensure continued harmonious relations between the rich and the poor.  

At the core of Carnegie’s thought was the observation that wealth is handled better in the hands of some than others. Some are simply better at organizing talent and resources towards more productive ends; naturally, over time, more capital is accumulated in their hands.

Carnegie marvels at the advancements civilization made during his time. He saw the material advancement of society as a kind of proof that the subtle laws that governed modern civilization must be superior to the paradigms that preceded it. 

Among these was the law of competition. Perhaps inspired by the ideas of Social Darwinism that were prevalent at the time, the law of competition determined that those firms which successfully competed and won in the marketplace were, de facto, the best firms, guided by the most talented leaders. This logic, in turn, justified the unequal accumulation of wealth - your ability to acquire surplus riches was your claim to it; your worthiness.

However, it is this same law of competition that puts capital at odds with labor since firms need to extract as much value from labor as possible in order to survive the competition. Carnegie presents us with a conundrum, the very laws of society that produced the most advanced and brilliant civilization in history also create the conditions of inequality which threatened the social fabric of his time. Moreover, there must still be an end to accumulation; even the greediest recognize that wealth cannot follow us into the afterlife. 

To reconcile these challenges, Carnegie posited a virtuous end for wealth: philanthropy. Funding centers for public education, parks and recreation, and art patronage, his philosophy toward wealth paved the way for modern philanthropy to take shape. According to Carnegie, the duty of the man of wealth was threefold:

1. To live simply and shun ostentatious living,
2. To provide moderately for those dependent on him, and
3. To administer surplus wealth for the benefit of the community.

“…surplus wealth should be considered as a sacred trust, to be administered during the lives of its owners, by them as trustees, for the best good of the community in which and from which it had been acquired.” (The Gospel of Wealth)

To the philanthropist, the ability to acquire is not the mark of worthiness on its own. One must also use their accumulated resources as an instrument in service to the community. Like the Aristotelian ethic, it is not the act of acquiring the fortune itself that determines virtue, but how it is dispensed. 

Importantly, in Carnegie’s philosophy, large concentrations of wealth are required in order to create a better society. Only large concentrations of wealth can be aimed at the creation of great universities, libraries, parks, and other expensive projects which uplift society. If those concentrations were distributed away in the form of charity, or even higher wages, they would be spent in thousands of petty indulgences and no great civilization-advancing works would be funded. 

“Much of this sum if distributed in small quantities among the people, would have been wasted in the indulgence of appetite, some of it in excess, and it may be doubted whether even the part put to the best use, that of adding to the comforts of the home, would have yielded results for the race, as a race, at all comparable to those which are flowing and are to flow from the Cooper Institute from generation to generation.” (The Gospel of Wealth)

The concept of wealth as enough is also absorbed into this philosophy, but subordinated as mere competence, which “should be the aim of all to acquire.” Competence means the ability to provide a comfortable future for your family and is assumed to be the telos of all, though the more ambitious aspire to accumulate even more and have a greater social impact. 

Under this framework, wealth takes on the role of means to an end once more, giving the industrialists a goal beyond mere acquisition. The key difference, however, is that pure accumulation is no longer a departure from virtue in the new gospel; you’re allowed to make as much as you want, as long as the surplus is invested in the proper spirit. Money begetting money is no longer a sin; you can now pay the balance through philanthropy.

In Carnegie’s vision, the young men of talent in every generation, via the laws of competition and accumulation, amass their fortunes in the marketplace. They then apply their hard-earned wisdom to the administration of their surplus wealth for the betterment of society as per their understanding. By this mechanism, society continues to progress and the “harmonious ties of brotherhood” between the rich and poor are sustained. 

But what happens when the means of acquiring wealth for some actively denies economic prosperity for the less fortunate? American laborers often bore the burden of dangerous working and living conditions to provide the ‘robber barons’ with their fortunes. And what if the wealthy, in their efforts to improve society, choose to think beyond parks and libraries, towards influencing politics or making other decisions with broad-ranging, unpredictable impacts on the lives of regular people?  

Are the Means Justified?

John Ruskin was a British polymath, whose multifaceted interests in the arts and natural sciences were turned toward political economy as he observed the consequences of the Industrial Revolution in Victorian England. The field of ‘political economy’ was coming into its own in the 19th century when both Ruskin and Carnegie did their work. It attempted to derive the science of the economic system as it grew in complexity, seeking to ascertain its laws so that it could be better managed.

However, Ruskin saw deep flaws in this emerging science and aimed his critique at the heart of its proposed worldview. He directly refuted the law of competition as an unavoidable and beneficial law, calling the whole field of political economy, as it was practiced, a pseudoscience. It hinged on one false assumption, he claimed. The ‘science’ of economy conflates humans as soulless machines, from which labor is extracted and used for producing valuable assets, their capacity for labor maintained at best and exploited at worst. 

For Ruskin, ‘wealth’ represented something much more subtle and profound. There is a deep link between what we consider wealth and what we consider useful, something both Carnegie and Aristotle would agree with. But what makes something ‘useful?’ The same item that is useful in one quantity becomes poisonous in another, that is useful in a certain circumstance becomes superfluous in another. Two square meals a day is  nourishing; nine is torture.

Ilth, wealth’s ill-gotten counterpart, represents the opposite state of affairs, “causing various devastation and trouble around…in all directions” (Unto This Last, Book IV). Illth represents the accumulation of wealth beyond the capacity to use it fruitfully and/or the use of wealth to destroy life rather than enhance it. The dangerous working conditions and economic exploitation of the Gilded and Victorian Ages are some of history’s most shining examples of ilth.

Something is wealth only if it serves the flourishing of life. If there is no life, then all the dead material in the world adds up to no wealth. In the final analysis, as Ruskin says, "there is no wealth, but life."

“There is no wealth but life. Life, including all its powers of love, of joy, and of admiration. That country is the richest which nourishes the greatest numbers of noble and happy human beings; that man is richest, who, having perfected the functions of his own life to the utmost, has also the widest helpful influence, both personal, and by means of his possessions, over the lives of others.” (Unto this Last)

Here we see echoes of Aristotle and his concepts of telos and eudaimonia. Ruskin emphasized that the inherent value of a thing exists in the relationship between that material thing and life. The skill of the possessor to make use of it impacts its value. 

“Wealth, therefore, is the possession of the valuable [useful articles] by the valiant [those who can properly dispense of them].” (Unto This Last, Book IV)

While Ruskin’s definition of wealth has great poetic force, so far it is still vague in its prescriptions. What is the proper dispensation of useful articles? How do we make best use of things in service to life?

Ultimately, the answer to these questions must be left to the intuition. However, Ruskin proposes a very interesting theory of appropriate compensation in his treatise on political economy, Unto This Last. This framework was meant to be applied whenever an employer and a worker are engaged in a transaction. It is a major practical consequence of Ruskin’s philosophy that deviates from the mainstream political economists of the time, as well as from Carnegie. 

The conventional theory of political economy saw price as a function of supply and demand. Ruskin saw this as an error which was particularly problematic when it came to the market for work. In Unto this Last, Ruskin lays out a theory of ‘just exchange’ which claims that the just compensation for a unit of work is the amount of "time, skill, and strength of arms" necessary to produce it; to paraphrase, the amount of ‘life’ that must be given to do the work. This stands in contrast to the idea that the appropriate compensation for a unit of work was whatever the market was willing to bear. 

“And this equity or justice of payment is, observe, wholly independent of any reference to the number of men who are willing to do the work. I want a horseshoe for my horse. Twenty smiths, or twenty thousand smiths, may be ready to forge it; their number does not in one atom's weight affect the question of the equitable payment of the one who does forge it.” (Unto This Last, Book III)

Contrary to Carnegie’s gospel, Ruskin saw vast concentrations of wealth as something to be suspicious of. He preferred that wealth should be distributed by the law of just compensation so that more people could be empowered to use the wealth to shape things in their own unique ways. By holding to this standard of just compensation, wealth is distributed through the system, rather than being easily concentrated in the hands of a few. 

The employer, who must always pay the full, just price, cannot hoard wealth through exploitation, nor can the worker exploit the employer through taking advantage of a desperate situation. The worker is compensated fairly and empowered to use that wealth to employ another. Wealth is distributed in just quantities, diffused via a chain process through the whole system. 

Ruskin claims the nation does not profit in the same stride as the ultra-wealthy; they are instead drained by those who would exploit its people and politics for personal gain...or those who accumulate material riches without the requisite skill or agency to use them for beneficial purposes. 

Wealth ensures all stakeholders are empowered to live well. Wealth exists in the relation between, “the value of the thing, and the valor of its possessor,” and it must flow through an economy via the law of just compensation. 

For Ruskin, the competent individual who collects around him instruments that he can use in service to the flourishing of life is wealthy. Any departure from this moral duty once again transforms money into an end rather than a means - ilth instead of wealth. And in its refusal to prioritize life, the state or society that lacks provision for individual flourishing will fail to flourish as a collective. 

Though a beautiful set of ideas, is it too idealistic a vision of economics to work in the real world? How exactly do you measure the 'just price' of a piece of work, for example, and who would we trust to impose such a price on the market?

A New World 

We have seen the implications of Carnegie’s philosophy firsthand in the 20th century. An explosion of technological advancement changed the state of human life forever: agriculture, medicine, economy, war - the list goes on - have been modernized to secure a global standard of living beyond our thinkers’ furthest imagination. 

And much of our progress is owed to the interaction between rich and poor. With a few regulatory sweeps and labor movements along the way, employee & employer continue to mediate their longstanding relationship toward just exchange. Carnegie’s description for his time reigns even truer in ours: 

“The poor enjoy what the rich could not before afford. What were the luxuries have become the necessaries of life.” (Gospel of Wealth).

A simple shirt off the clearance rack is itself a modern miracle. The sourcing of raw materials, manufacturing, logistics, wholesalers, and labor at each step of the journey requires unprecedented international collaboration. Though this vision does not come without consequences; more trade means more riches as well as a greater opportunity for injustice.

Labor standards are not shared across international borders, but the opportunity to offshore labor to cut costs has proven too compelling for most businesses. Obtaining such advantage through this exchange denies life from both the domestic and foreign laborers, placing it unjustly in the employer’s hands. The trap of money-getting for its own sake is ever-present in a society that synonymizes wealth with purchasing power. 

Like Carnegie and Ruskin, we stand amidst a revolution ourselves. The fight continues to maintain good faith between the owning and working classes as we struggle to balance technological advancement with social and environmental impact. 

As we enter into a new age of progress, we must define what progress means, starting with our notion of success and how it is achieved. We must decide which is worth more: economic growth or life?

Michael Oberschewen holds a bachelor's degree in marketing and the humanities from Villanova. He currently works as a logistics professional and writes as often as he can in his spare time. 

All opinions expressed here are solely of the author and do not reflect the views of the author’s employer.