Should the rich be social benefactors?

Being rich is not an absolute measure of wealth, but a relative one. It is not a sign of abundance, but of inequality. This is why there has been a lingering discomfort about wealth, argues historian Guido Alfani, in As Gods Among Men: A History of the Rich in the West. The book looks at forms of wealth in the last thousand years with recent data on inequality, to explore attitudes to the moneyed, and how rich people behave.

Aristocracy, entrepreneurship and finance are the traditional routes to money. Nobility, with its publicly accepted status, always had privileged access to resources. But after the commercial revolution of the Middle Ages, as great merchant fortunes were made in places like Italy, a backlash set in.

In Christian tradition, super-rich were considered sinful, avaricious and trying to be more godlike than their fellow men. They had to conceal the scale of their wealth. Many sought religious absolution or tried to salve their conscience by donating to charity and church. A role was found for the rich – the responsibility to tide the public over in times of crisis, a plague or a famine. The crown often forced loans on businessmen during wars; even in the world wars, the rich were expected to contribute.

The generous use of one’s fortune was held to divide the virtuous rich from the miserable sinner. This is also why families like the Medicis chose acts of ‘magnificence’, creating splendidedifices for the public, giving greatly to show moral and economic greatness. These acts entrenched their role in wider society and politics too. In times when public welfare spending was low, this systematic spending by the rich created amenities for the poor.

After Industrial Revolution, the new wealth aristocracy of 19th century and after had no inhibitions about display– in fact, conspicuous consumption was essential, to signal status. America’s ‘robber barons’ and prominent dynasties were into munificence rather than magnificence – voluntary giving without asense of obligation.

Then and now, the rich prefer splashy donations to taxation, making it about their goodwill rather than democratic dues (avoiding inheritance tax for instance). This also gives them oversized say in public affairs and politics, the book argues.

In the West, the rich attract criticism when they spend, also when they save – accumulation and compounding only widens the distance between them and the rest. Their position is inherently fragile, the book says. A few already know this: “it’s taxes or pitchforks”, an open letter at Davos 2022 acknowledged.

Of the three paths to riches, finance attracts the most social disapproval. While legal regulation took on this ‘money trust’ in mid20th century and inequality declined, the pendulum swung towards finance again after 1980s. Objections to the oligarchisation of public life are being heard again.

Today, wealth concentration is high, and inheritances and financial assets are sharpening both wealth and income inequality. Apart from raw wealth, there is a global aristocracy forming across elite schools and clubs, with a sense of shared interests.

Crises are frequent, from pandemics to wars, but the rich are more reluctant than ever to step up to their traditional role. Is the Middle Ages warning about playing ‘gods among men’ coming true, the book asks, reminding us that in Western mythology, gods can fall, to cataclysmic impact.

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