The New Economics: puzzle

So the new analysis of wealth has got stuck on an old question.

Let us define wealth as getting what you want. People feel poor when they can't get things they want, and rich people enjoy getting what they want.

But people have different wants. Some people want easy to get things like watching a sun rise, and some people want very hard to get things like a BMW.

Given two people who have everything they want then who is the more wealthy? The one with many things like the BMW and the house overlooking San Francisco Bay or the one who only wanted an apple.
To my mind at least the one with the apple is the more wealthy. The problem with the one with many things is that there is a lot that can go wrong. The car may break down, the house may get burgled. So there is an anxiety with having many things.

When we don't want things they become neutral. This doesn't mean we don't notice them. We can walk through a forest and not want to take any of the trees with us because they are neutral. But it doesn't mean that we don't have an experience. The forest will be owned by someone, and it doesn't have to be ours to have that experience. Some will say that we "own" our experience. But that experience is gone very quickly so what is there to own. We are however left with lasting memories, and perhaps photos and selfies etc. We can say we own these. But if someone sold their memories would we buy them? The value of memories is that we had the experience. The memories (as memories) are of little value without the original experience. And we can't own that experience.

What in fact happens here is very critical. If we like an experience, we often want to own it. Like going to a concert to see our favourite singer. Sadly the experience is quite short perhaps only a hour. When the experience is gone, we want to own it somehow. We have pictures, we buy the album if we didn't already do to at least re-experience the songs, we buy merchandise, we speak to other fans to share our memories and try and relive it. But the truth that we do need to sit down and accept is that it is gone. We have had that experience and it is gone. The fact we are sad, is actually a good thing, because it means that for that short 1 hour we were doing something we really liked. The sadder we are, the more it meant. But the only way to deal with this is just to feel that sadness. It is part of the ups and downs of life. If that sadness if unbearable what we are discovering is that we need to pay more attention to our life. It means that we do not like our life, we do not like our ordinary experiences and we want to run away into happy experiences like seeing our singer. Running away from what we are never works. At some stage we simply have to just sit down and start to take in the pain and unhappiness. In small amounts like letting water out of a drinking fountain. At first it may seem still full of unhappiness. But eventually letting little bits out we will empty all the feeling we don't like and find it easier just to feel what we feel. The point here about experience is that it cannot be owned. The truly happy people allow experiences to come and go in real time, both good and bad. When nice feelings end they don't go searching for them again (too much), and when bad feelings start they don't go running away (too much). They have some equanimity. This is the key to true happiness.

But memories can be like virtual reality and we like to experience them again. In Wordsworth's poem "I wandered lonely as a cloud" he ends:

For oft, when on my couch I lie
In vacant or in pensive mood,
They flash upon that inward eye
Which is the bliss of solitude;
And then my heart with pleasure fills,
And dances with the daffodils.

Here he is reliving his memories. He is not trying to go back to the say when he first saw them, that is gone, but he is able to re-experience that afresh through his memories. It doesn't have to be his memory. If he could buy that memory off someone then it would be just as good. This is pure aesthetisism.

So the person with the apple has no anxieties unlike the person with many things to worry about. But the person with many things has an extra thing that the person with the apple doesn't have and that is status. Living in the San Francisco Bay area means that they get respect from lots of people. People who cannot afford to live in this area may well want to do so, and those that can find that they are separated from the poorer people. Whether or not the rich people get what they want stops being the point, being distinct from poor people becomes a thing in itself. Now as discussed the person who only wants an apple will not live in the San Francisco Bay area, but the person who wants a BMW is much more likely to do so. Status separates people based upon only the physical material view of wealth, but as discussed if you need lots of things to be satisfied you may well be less satisfied than the person who is happy with just an apple.

If you go the San Francisco Bay you probably won't find people any more happy than anywhere else. But the opposite is not true. Being excluded by the rich and being viewed as low status is damaging on wealth and health. The person who is happy with only the apple, but also be happy with being low status (or at least low status defined by the people living in San Francisco Bay). Human and Animal societies have pecking orders and even if materially you are satisfied, you have the problem of surviving the status system. Everyone in the West is actually wealthy. No one in the West has any material reason not to be satisfied. Even the homeless person has every opportunity to get off the streets, and they have food charities around every corner. Unhappiness and dissatisfaction in the West is entirely generated by the status system. The UK has the most extreme status system in the West possibly with the exception of India (which the UK ruled for several centuries so is that a coincidence?). US also has some of the worst inequality in the world. The materially poor in both places, despite probably being materially satisfied are made to feel unworthy and poor. Discussed a lot in the blog that wealth is actually relative and this is why.

So the person with many things, at least within the society, will be better off not because they have many things, but because society will attribute them a higher status. Having the correct accent when speaking, having manners, a good family name, being the right race are some of the other things that affect one's status. This type of "wealth" is what makes life easy for upper class people, and harder for lower class people. The BMW then is not about the car itself but about the status.

In UK its more complex. The aristocracy will look down their noses at the BMW. That my great grandmother would have said was "vulgar." Any criminal or lottery winner can buy or steal a BMW. That possession means nothing in true upper class circles. Class is defined by your deference to the status system. You respect those above you, and you behave in a self controlled and knowing way. Nothing worse than embarrassing the upper classes by doing or saying the wrong thing. It is a game that knits actually respectful and desirable characteristics into a formal system that protects the aristocracy. My mother says of the UK gentry she knew how courteous and  respectful they were to everyone regardless of class. But they would never allow people to transcend class and they would never step down in class.

Animals are already adapted to their environment and know how to survive. Humans didn't add anything to this. What humans did was take basic material needs and turn them into a complex social class system. With the upper classes controlling the resources of the poor classes. When we talk about wealth in human circles we are talking about the system of control and status. Not the material value, but purely the social value of things. Humans know how to live the idea of a 3rd world is fake. People are in poverty because social structures have restricted their access to land and resources. Rich elites in 3rd world countries control the movement of resources and that is what causes poverty. Those rich elites include the Western Imperialists who first colonised those countries and set up the corrupt system that now flourish. Not least is the system on international finance that ensures that most of the wealth of countries is extracted into the Western financial system either as payment of debts, or through offshore accounts that hide the wealth of whole nations.

SO returning to the original question who is most wealthy depends upon what you mean. True wealth means simply the person who has what they want. It can be a sunrise or an apple or a BMW. But what I will call False Wealth is what other people think of your wealth. If I have a gold bath it is just a bath made of gold, it is of no value to me at all. But it demonstrates physical wealth which in a society that measures people by their material wealth confers status. But in UK aristocracy that would actually serve to lower ones status because it is "common", "vulgar" and ironically "cheap" to have a gold bath. True social value would be running a bank or having some award from the Queen. Demonstrating some worth that could not be simply bought by a lottery winner, and preferably some status that occurred over several generations. Class cannot be sold over the counter is how the aristocracy would like to view it. But which ever way status is a social phenomenon and not a material or personal one.

For me if you buy something for yourself because other people want it you are actually being dishonest to yourself. If it is for you, then buy what you want. But we don't live on an Island and rarely buy just for us. If you are buying with other people in mind, like buying the family car that your wife and children want rather than just thinking of yourself then that is actually the highest class there is. That is the kind of behaviour that gets noticed not just on Earth but also in Heaven. Thinking of other people is actually the path to true happiness. This doesn't mean not thinking of yourself, but it means treating others as you do yourself, so that you don't see a difference in the value of what other people want and yourself. This transformation is the way to be Really Truly Wealthy.

So in fact the initial assumption was wrong. Wealth is not getting what you want. Wealth is everyone caring that we all get what we want.

Now how do I add that into the economic models? Perhaps first I need be clear how this achieves a greater outcome that what Adam Smith's Invisible Hand (IH) achieves.

The IH says that in a free market then people buying what they want gives money to the producers and encourages them to make more which brings the price down. Conversely things that people don't want get less cash and so profits drop and encourage business to close or change to making what people do want. Producers seeking individual profit and consumers seeking lowest prices means that everyone gets what they want as efficiently as possible.

This is a pure material production machine. It ignores status obviously and it ignores people.

A common example is doing work for a friend. It is common practice to offer a friend a lower price. Cynically we might say this happens because we trust the friend and so expect to get savings ourself in return.

But importantly this is not the whole truth. Humans care about each other. Not entirely egalitarian, when running to someone's aid we will we place family and friends first. While this looks selfish we will often place family and friends before our self. We also have the heroes who place their own lives at risk to help complete strangers. This is actually normal human behaviour. To be celebrated but something we all have more or less. It is not present in Adam Smith or economics.

I may do overtime for a client who cannot afford but needs my help. I step aside from my "professional" capacity and work as an individual on a person to person basic. This is why I say that Capitalism actually puts a barrier between people because as a Professional we only do things for payment, not out of welfare for the client as a person.

I need to stop here. But the new question then is how, and what benefit is there, is adding to economic models person-to-person interactions outside the exchange system. In particular somehow measuring the wealth that arrives not materially but through caring for another.