A wealth of cheapskates

The magnificent productivity and innovation of the U.S. economy is fostered by the same market forces that cause big fortunes. Tamper with the mechanisms of fortunes and we might inadvertently tamper with the mechanisms that generate prosperity overall. Better to pressure the rich to be more public-spirited -- there's enormous room for improvement on that score -- than risk disrupting economic growth.

This leaves us with one final question: What is the effect of wealth on the wealthy themselves? And here the research suggests that commanding inexhaustible sums of money does not give the rich a sense of well-being.

Psychologist Edward Diener of the University of Illinois interviewed members of the Forbes 400 and found them only slightly happier than the population as a whole. Meanwhile, many of the super-rich spend much of their time in litigation over money, divorce proceedings and other misery-inducing pursuits.

Once, on a television show, I was asked if I'd like to be rich. My answer was that I'd really, really like to have $1 million, but having $100 million would ruin my life. With $1 million I could pay off my house and concentrate entirely on serious writing. (Note to the super-rich: Please don't hesitate to endow a chair for me at the Brookings Institution. You'd get your name on my articles!) But $100 million, I said, would be awful. My life would be ruled by money. Of course, giving most of it away would be a lot of fun and cause people to admire me. Hoarding unneeded money does not make the wealthy happy; yet many wealthy people miss out on the delightful experience of giving more away.

A longer yacht, older cognac, another Gulfstream -- for the super-rich, there is no material thing they don't already possess, and thus their money has no utility as a means of acquisition. Their money does, however, have tremendous utility as a means to bring themselves happiness -- but only if they give it away. The rich should give money away for selfish reasons! Ebenezer Scrooge discovered that giving money away is life's most pleasurable act. Why do today's super-rich devote so little of their wealth to engaging in life's most pleasurable act?