Standing By My ‘Richer-than-Rockefeller’ Argument

by Don Boudreaux on May 7, 2017

in Reality Is Not Optional, Standard of Living

Here’s a letter to someone who read George Will’s recent, superb (!) column explaining that ordinary Americans today are arguably materially more prosperous than was J.D. Rockefeller 100 years ago:

Ms. Carly Joh

Ms. Joh:

Thanks for your e-mail.

You misinterpret George Will’s summary of my argument that ordinary Americans today are materially wealthier than were J.D. Rockefeller and other billionaires of a century ago.  The operative word here is “materially.”  My argument is that an early 21st-century typical American has a larger bundle of consumption goods and services than did an early 20th-century billionaire American.  My argument does not speak directly to happiness or to what you call “contentment and life satisfaction.”  (I will, however, aver that our being free in the early 21st century from a significant risk of having to bury a child – and also from having to bury a wife or sister who dies from giving birth – is a source of genuine happiness, contentment, and life satisfaction.  Such a reduction in risk is one that a billionaire in 1917 would surely have paid a large fraction of his or her income to achieve.)

Further, neither Mr. Will nor I denied that human beings care about status and rank.  Indeed, I agree with you that “having high social status is worth a fortune,” at least to many individuals.  But high status differs from material prosperity in two relevant respects.  First, unlike material prosperity, high status is necessarily confined to a relatively small number of people; it cannot be enjoyed by the masses.  Second, unlike societies with mass prosperity, societies with positions of high status exist always; if differences in monetary wealth aren’t available to confer high status, differences in the likes of political power, physical strength, or family name will do the trick.  Given these realities, isn’t it better that the masses who enjoy no high status at least be materially prosperous rather than materially impoverished?  And if the material prosperity of the masses grows so rapidly as to enable hoi polloi to consume better than the richest and highest-status moguls of a mere 100 years ago, isn’t this achievement something to celebrate even if it doesn’t yield earthly perfection and bliss for all?

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030


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