Likelihood of Success

Wait for it…

Mar 5, 2007 Gelt, Politics and Poker

Ron’s post below about marriage as a Bourgeois luxury called to my mind these two recent stories from the Cato Institute’s Cato-at-liberty blog. The first entry, quoting a Tech Central Station column from last week, discusses some issues related to income inequality in the United States:

The picture of an actual millionaire is dramatically less glamorous than commonly-held visions of exclusive neighborhoods, expensive clothes and colorful social lives. In his 1996 book The Millionaire Next Door, co-authored with Dr. William Danko, Dr. Stanley revealed that the typical millionaire spent less than $400 on their most expensive suit, and only about 1% spent more than $2,800. Only one in ten millionaires had ever spent more than $300 on a pair of shoes. Most millionaires pay a few hundred dollars or less for their watch, and $30,000 or less for their main motor vehicle. They have been married to the same person most of their adult lives.The wealthy are conspicuous for their lack of consumption: “What are three words that profile the affluent? FRUGAL FRUGAL FRUGAL”. The book is full of startling individual cases: the millionaire who refused the gift of a Rolls Royce because he couldn’t imagine driving up in one to eat at the crummy restaurants he prefers, or throw caught fish in the back seat; the wife who, after her husband gave her $8 million in stocks, returned at once to clipping the 25 cent grocery coupons from her newspaper.

This is no coincidence. It is not that most millionaires are in the habit of being frugal despite their wealth: it is that they are so wealthy because they are in the habit of living so frugally. The plentiful residual income goes into savings and investments that are left to grow for decades.

The second entry, from last month, discusses a recent study regarding income inequality in the Third World:

The Economist reports on an interesting new study showing that members of a Bolivian tribe who understood the value of deferred gratification also experienced higher income gains:

In short, how we choose to live our lives is not merely a question of personal preference; our decisions have long term consequences, both in the personal and financial realms. The unifying issue here is delayed gratification.

I do need to disagree with Ron in one area; in Ron’s comments over at Dean’s World, he tries to draw a neat line between conservatives on the one hand and “liberals and libertarians” on the other. He writes:

Liberals and libertarians aren’t bothered by these things because they believe there is no morality other than when your swinging fist finally brains me; liberals add in the “moral” principle that people who have less have a “moral” right to take it from people who have more. They don’t believe that issues of dignity and social cohesion can properly be inferred from how people look, act and talk, or, in many cases, they consider cohesion “oppresive” even if they end up decrying “alienation” and glass ceilings.

We libertarians are not so easily categorized at this; we span a wide spectrum. It is true that there are some libertarians who are libertine in nature, who believe that how we behave is irrelevant as long as we are not assaulting others. But others of us are more conservative (with a small ‘c’) than that; we recognize that there is more to the evaluation of behavior than whether fist meets skull.

We all agree that the government should not — and for the most part cannot — legislate in these areas, but that does not mean we reject the notion that some behaviors are more reasonable, more productive, more beneficial than others. Having opinions is not the same as enforcing them at gunpoint. (Which I realize Ron has not proposed, either.)