Wealth Without Independence
Wealth creates a treadmill effect where greater income leads to increased dependence on work and social comparisons, rather than independence. Despite unprecedented wealth, people are more in debt and less free, illustrated by the Tantalus myth.
THE IDEA
Wealth Without Independence
There is a phenomenon called the treadmill effect, similar to what we saw with neomania: you need to make more and more to stay in the same place. Greed is antifragile—though not its victims.
Back to the sucker problem in believing that wealth makes people more independent. We need no more evidence for it than what is taking place now: recall that we have never been richer in the history of mankind. And we have never been more in debt (for the ancients, someone in debt was not free, he was in bondage). So much for “economic growth.”
At the local level, it looks like we get socialized in a certain milieu, hence exposed to a treadmill. You do better, move to Greenwich, Connecticut, then become a pauper next to a twenty-million-dollar mansion and million-dollar birthday parties. And you become more and more dependent on your job, particularly as your neighbors get big tax-sponsored Wall Street bonuses.
This class of persons is like Tantalus, who was subjected to an eternal punishment: he stood in a pool of water underneath a fruit tree and whenever he tried to grab the fruit it moved away and whenever he tried to drink, the water receded.
And such a permanently tantalized class is a modern condition. The Romans circumvented these social treadmill effects: much of social life took place between a patron and his less fortunate clients who benefited from his largesse and ate at his table—and relied on his assistance in times of trouble. There was no welfare at the time, and no church to distribute or recommend charity: everything was private (Seneca’s book De beneficiis I mentioned earlier was exactly about which obligations one had in such situations). There was little exposure to the other wealthy biggies, just as mafia dons don’t socialize with other mafia dons but with their constituents. To a large extent, that’s how my grandfather and great-grandfather lived, as they were local landowners and politicians; power was accompanied by a coterie of dependents. Provincial landowners were required to maintain an occasional “open house,” with an open table for people to come help themselves to the fruits of the wealth. Court life, on the other hand, leads to corruption—the nobleman comes from the provinces, where he is now brought down to size; he faces more flamboyant, wittier persons and feels pressure to prop up his self-esteem. People who would have lost their status in the cities conserve it in the provinces.
You cannot possibly trust someone on a treadmill.
When to use it
When evaluating a job offer with a higher salary but longer hours, assess whether it increases dependence on the employer and reduces free time.
Before moving to a more affluent neighborhood, consider the potential social comparison treadmill and whether it will lead to more stress or debt.
In public policy, question whether economic growth alone leads to greater well-being or if it fuels a cycle of debt and dissatisfaction.
When making financial decisions, weigh the benefits of luxury purchases against the risk of being trapped in a cycle of needing more to maintain status.
FROM THEORY TO EVERYDAY LIFE
In practice
The Greenwich Mansion
An individual moves to a wealthy enclave like Greenwich, Connecticut, and despite having a high income, feels poor next to neighbors with $20 million mansions and $1 million birthday parties. This escalates dependence on a job to keep up appearances.
Tantalus Punishment
In the ancient myth of Tantalus, he stood in water under a fruit tree, but whenever he tried to drink or eat, the water receded and fruit moved away. Similarly, the modern wealthy class finds that as they earn more, their desires and social comparisons escalate, preventing true satisfaction.
Roman Patronage System
Romans avoided the treadmill effect through a patronage system where wealthy patrons supported less fortunate clients. Social life revolved around these relationships, reducing exposure to peer competition and maintaining independence based on local standing rather than relative wealth.
A MOMENT TO REFLECT
Put it to work.
How does your current income affect your sense of freedom and independence from work? Are you on a treadmill where more money means more obligations?
Consider your social circle: do you feel pressure to match the spending or lifestyle of peers? How does that impact your financial decisions and overall well-being?
Think of a time you received a raise or moved to a wealthier area. Did it increase or decrease your feeling of control over your life? Why?
Often confused with
References
- De beneficiis — Seneca
CONTINUE THE CONVERSATION
Source texts
- Antifragile (Nassim Nicholas Taleb)