The ethical backstory of the pursuit of wealth
(Illustration: Saurabh Singh)
WHEN ANTHROPOLOGIST Franz Boas landed among the Kwakiutl (Kwakwaka’wakw) on Vancouver Island in British Columbia, members of the tribe were still regularly destroying their most valuable possessions—blankets, canoes, etcetera—in the potlatch. Boas apparently understood why the Kwakiutl loved the potlatch, seeing it as a matter of self-esteem and status, but he didn’t quite grasp its economic significance. In his posthumously published The Pursuit of Wealth (2000), historian Robert Sobel wrote: “What Boas noted but did not comprehend was that the Kwakiutl were quite wealthy, far more than neighboring tribes. The reason was that they worked hard to accumulate those possessions destroyed at the potlatch. There was a strong element of competition present that encouraged productivity and excellence—and accumulation.” What Boas couldn’t fully comprehend, the government understood even less. Sobel lamented: “Distressed by what to them was the wasteful nature of the potlatch, Canadian authorities attacked the practice, suggesting it was deleterious to economic development…The potlatch fell into disfavor. The Kwakiutl turned to commercial fishing to fit into the larger economy. But without the economic spur of the potlatch, initiative declined. So did the Kwakiutl economy. With the best of intentions, the authorities caused grievous harm to the Kwakiutl.”
The pursuit of wealth dates back to the dawn of civilisation. From antiquity to the present day, individual efforts to acquire, or attain, wealth, has been a constant of human socio-political, economic and technological evolution, while the means to attain wealth have varied, or evolved. In 2000, the total global household wealth was estimated at $125 trillion, excluding human capital. In less than 20 years, global household wealth stood at $280 trillion in 2017, according to Credit Suisse’s Global Wealth Report (2018). Despite the crash of 2008 and the global recession. The human pursuit of wealth is divided into three broad phases: the age of agriculture, which made up most of its history; the age of trade, which often overlapped with agriculture and was itself ancient but did not share the pre-eminence of agriculture till the development of infrastructure and state backing for merchants, although market workings of demand and supply, banking (credit and lending) , profit motive as well as skills specialisation are as old as the movement of goods; and finally, the age of industry which began in the late 19th century. While the first two phases were universal in origin, that is, simultaneous to most civilised, or inhabited, corners of the world, the modern industrial phase had an unarguably Western beginning. Today, our—arguably—post-industrial age is still defined and enabled by this most ancient of pursuits, although whether wealth itself is a means or an end retains all the trappings of the ur debate.
Protestantism would fundamentally alter Christian views on wealth—and the course of history—with the rise of Calvinism. Max Weber’s linking of Calvinism and Capitalism was always, at best, a theory. But the nouveaux riches of Northern Europe, like Rembrandt’s shipbuilder and his wife, made the new economy possible
After Independence, India took a leap of imagination and, in practice, embarked directly on heavy industrialisation in what was still an agrarian economy. But the Nehruvian “commanding heights” of the public sector made wealth creation a statist project which didn’t live up to expectations. Unfortunately, the suspicion of wealth creation and private industry did not subside with the liberalisation of 1991 or even the next set of major reforms at the turn of the century. It was not until February 10th, 2021 that a prime minister would stand up in Parliament and speak up for wealth creators and private industry. That day, Narendra Modi had argued: “The culture of damning businessmen and entrepreneurs as outright crooks… may have served parties well… in the past. But that has to stop. Wealth creators have a crucial role to play in the economy.” In a politics left far behind by economics, those words had bided their time for too long, and couldn’t have come any later. Unsurprisingly, it rekindled an old debate.
In common parlance, pursuit of wealth is subsumed under wealth creation, with the latter impacting the political economy far beyond the inherently individualistic implications of the former. The necessity of the creation of wealth is always shadowed by the more ethical concern of its equitable distribution. This debate is not of secular, let alone recent, vintage. However, if the question of distribution of wealth is essentially moral and humanitarian, that of its pursuit and creation may not be any less so. When we say ‘wealth’, the assumed subject is financial and physical assets distinguished by their innate and/ or relative transactional value. This essentially quantitative view of wealth is a legacy of Greek rationalism. (In the Nicomachean Ethics, Aristotle had pinned money down to an instrument of measurement.) But the Sanskrit “Artha” has always meant much more, never yielding itself to pigeonholing albeit not to contextual compartmentalisation. Artha is one of the Chaturvarga or Purusartha which constitute the aims of life, the other three being Dharma, Kama and Moksha. As one of the objectives to be pursued by the living, Artha includes material wealth but expands itself to cover anything that provides value and is essential in nature. Thus, it is both an end to be sought and a means to an end, that of Moksha, and is intricately tied up all along the way with Dharma, or virtue, and Kama, or pleasure. There is an ethical-spiritual prioritisation, Upanishadic in origin, between the pursuit of wealth as self-indulgence and as the fulfilment of a greater good. However, Artha, along with Kama, are essentially secular, or material/ worldly objectives.
In India, the suspicion of wealth creation and private industry did not subside with the liberalisation of 1991. It was not until February 2021 that a Prime Minister would speak up in parliament for wealth creators. Unsurprisingly, it rekindled an old debate
“It is fairly obvious that artha (wealth) and kama (pleasure) are secular or worldly values while dharma and moksa are more spiritual values. From a philosophical point of view, then, kama and artha are implicitly ranked as lower ends while dharma and moksa are ranked as higher ends…philosophy [is] interested in kama and artha ‘only in so far as they help, or are instrumental to, dharma and moksa’,” writes Arvind Sharma in his defence of the cogency of the Purusartha “The Purusarthas: An Axiological Exploration of Hinduism” (The Journal of Religious Ethics, Summer 1999). And yet, “If we examine the four purusarthas in terms of intrinsic and instrumental value, however, we arrive at a different pairing. Artha and dharma are sadhana (means) while kama and moksa are sadhya (ends). That is to say: through wealth one enjoys the pleasures of life, and through dharma one reaches moksa” (ibid).
To understand what enables the generation of wealth, the Arthashastra argues that knowledge of the science of economics (Varta) is necessary: “Agriculture and animal husbandry, along with trade, constitute economics. It is of benefit because it provides grain, livestock, money, forest produce, and labour” (Patrick Olivelle, King, Governance, and Law in Ancient India: Kautilya’s Arthasastra, 2013). More broadly, “Success (artha) is the livelihood of human beings” (ibid). But since a core meaning of artha is material wealth, the Arthashastra—its intricate injunctions on wealth, its legitimacy and its uses apart—advises filling the state’s coffers, but goes further. RP Kangle, in his The Kautilya Arthashastra (1969), commented: “One view is that [the ruler] should enjoy kama or a life of sensual pleasures in such a way that thereby his dharma and artha are not affected adversely. According to another view, all three should be cared for in an equal measure. Finally, Kautilya’s own opinion is stated that the ruler should regard artha alone as supreme, since the other two are dependent on it.”
Franz Boas understood why the Kwakiutl loved the potlatch, as a matter of self-esteem and status, but he didn’t grasp its economic significance. The Canadian authorities’ attack on it deprived the relatively wealthy Kwakiutl of initiative, pushing them into economic decline
Money, or wealth, may be used for good or bad, for selfish or selfless ends, or not at all. But a distrust of money as evil– a priori suspicion of wealth—would have seemed alien to a worldview removed from Manichean binaries. But that doesn’t mean the question of purpose was missing. A passage on money from Sri Aurobindo’s The Mother (1928) captures this perspective: “Money is the visible sign of a universal force, and this force in its manifestation on earth works on the vital and physical planes and is indispensable to the fullness of the outer life. In its origin and its true action it belongs to the Divine. But like other powers of the Divine it is delegated here and in the ignorance of the lower Nature can be usurped for the uses of the ego… The seekers or keepers of wealth are more often possessed rather than its possessors… For this reason most spiritual disciplines insist on a complete self-control, detachment and renunciation of all bondage to wealth and of all personal and egoistic desire for its possession. Some even put a ban on money and riches and proclaim poverty and bareness of life as the only spiritual condition. But this is an error; it leaves the power in the hands of the hostile forces. To reconquer it for the Divine to whom it belongs and use it divinely for the divine life is the supramental way for the Sadhaka” (emphasis added).
The denunciation of wealth as offensive or suspicion of it as obstructive would characterise much of the Apostolic Age of the Church and early Christianity, retaining its injunctions in a moderated form in Roman Catholic doctrine. The Manicheans in their dualism, of course, saw no good in the material life. The root of this rejection of wealth and embrace of poverty lies in the Synoptic Gospels, especially Mathew and Mark referencing Jesus’ exhortations to his disciples to keep their eye firmly on the treasures in heaven and that the rich couldn’t enter the kingdom of God. This paired denunciation and renunciation would persist through Paul and Thomas Aquinas right down to Lutheran Protestantism. However, in Paul, there emerged a subtlety, a semantic nuance, often overlooked. In the first of his pastoral epistles (First Timothy), Paul warns: “For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows” (KJV, emphasis added). Thus, possession of money, or wealth, per se may not be sinful, but the love of it is still a departure from faith. Catholicism would retain the vow of poverty for the priesthood and counsel poverty for adherents, something that Lutheran Christianity did not dispense with. However, Protestantism would fundamentally alter Christian views on wealth—and arguably the course of history—with the rise of Calvinism.
It could perhaps be argued that the fabled “Protestant work ethic” that emerged in northern Europe under the influence of Puritanism in England and Calvinism on the Continent was a prolonged demonstration of karma yoga, specifically the gospel of works or action. It revolutionised the political economy of northern Europe and built America. Hard work, charity and frugality in personal life would form the pillars of a reinterpretation of doctrine that came to say that not only was there no sin in the pursuit of wealth but that it was a duty for the faithful. Moreover, wealth on earth was the mark of the elect, whose affluence reflected the benediction bestowed on them by God. Max Weber went much further and, in his The Protestant Ethic and the Spirit of Capitalism (1905), connected Calvinism to the rise of capitalism and increased prosperity where it was predominant. Weber, who also investigated the intersection between religion and economics in Judaism, Hinduism-Buddhism, and Confucianism-Taoism, fixed upon the dignity granted to secular work by Protestantism. The humblest of professions and the most menial of labours, pursued with sincerity in the service of God, were a means to individual spiritual salvation and contributed to the greater material good. Weber contrasted the post-Calvinist steady rise in prosperity of Protestant northern Europe to the persistent poverty and industrial backwardness of the Catholic south. The link between Calvinism and capitalism is not uncontested; it has had its fierce critics and was always, at best, a theory. But the factuality of the evidence it cited could not be denied even if the chain of causality was never watertight. The nouveaux riches of northern Europe, like Rembrandt’s shipbuilder and his wife, made the new economy possible and were pioneers in the democratisation of wealth.
Frederick Lewis Allen’s insight into the pre-depression era ‘sharp practices’ like insider trading, ineffective regulators and the crash of 1929 would ring just as true in 2008. But the moral of Allen’s story is none of that takes away from the imperative of wealth creation which had enabled a transformation such as America’s
Judaism, unlike pre-Hellenic Classical Greece or early Christianity, did not preach indifference to wealth. Rather, wealth was always held dear in the Hebraic worldview and the material fortunes of the Jewish people were looked upon as the mark of their standing, at any moment, in the eyes of God. The Old Testament (OT) has little time for poverty. What it does instead is command the rich, the employer for instance, to pay due wages and to not exploit those in his employ. The poor are offered protection, but poverty is not extolled as a virtue. Calvinism, in remoulding the Christian ethical view of wealth not only acknowledged that times had changed but also recycled Christianity back to the OT in a sense. The Scottish Enlightenment, which took off from the 18th century Enlightenment, was a revolution in rationality and empiricism and also a reaction against Calvinism. But without Calvinism, it’s debatable if the Scottish Enlightenment would have happened at all and, thus, what we know as classical economics.
Adam Smith’s The Wealth of Nations (1776) was a departure in that national income rather than the king’s coffers became the measure of wealth and yet, such an idea was not unknown on the eve of the industrial age. The French Physiocrats who preceded the likes of Smith, David Ricardo, JS Mill and Malthus, had actually birthed modern economic thought. At least one of them, François Quesnay, might have interacted with the scholarly traffic on the Silk Road and channelled the extant economic ideas of imperial China. Smith had already determined the value of a good purchased in terms of labour saved (for the purchaser). A fundamental change in defining value that came with his successors like Ricardo was to estimate, instead, past labour—what has gone into the production of a commodity—something that would form the backbone of Marxian criticism of capitalism. Karl Marx’s unfinished Grundrisse, or Foundations of a Critique of Political Economy (published ultimately in 1939 and translated into English only in 1973), looked at two variables—labour and land—as the generators of material wealth. Although the Labour Theory of Value (LTV) is extraneous to Marx himself, it has always been affixed to Marxian economics without which its critique of capitalism would be stillborn. Views on wealth in self-proclaimed Marxist states were a function of interpretations of LTV. Ironically, imperial and communist China imported some of its old economic ideas recycled through classical economics and Marxism. Before the Ming dynasty integrated monetary policy in the 14th century, the Chinese economy was already structured albeit with wide regional variations, including currency. In the 17th century, the Ming rulers tried but failed to revive paper currency which would not become the token of exchange till the Europeans came. But China’s ancient experiments with paper money had already influenced European banking. By the time Deng Xiaoping opened the doors in 1978 and allowed the curious mix of free market and communist state machinery, an abiding characteristic of Chinese society had, however, disappeared—feudalism.
THE SINGLE-BIGGEST, all-round transformation of a society, post-Industrial Revolution, by means of wealth creation was that of the US in the first half of the last century. The country underwent another transformation from the unbridled Wall Street of the pre-October 1929 days to the democratisation of wealth. Frederick Lewis Allen, socio-economic historian and longtime editor of Harper’s Magazine, in The Big Change: America transforms itself, 1900-1950 (1952) summed it up as “the changes that have taken place in the character and quality of American life by reason of what might be called the democratization of our economic system, or the adjustment of capitalism to democratic ends; the way in which an incredible expansion of industrial and business activity, combined with a series of political, social and economic forces, has altered the American standard of living and with it the average American’s way of thinking and his status as a citizen.” Allen died in 1954, but he wouldn’t have been surprised by the 1980s. Writing nearer the apogee of the Alan Greenspan era, Sobel identified the precise moment and specific instruments: “There was another important element caused by the inflation [of the 1970s]. Shares of a host of major companies, especially the conglomerates fashioned in the 1960s and petroleum companies, were selling for prices far below their breakup values. An understanding of this situation, combined with the new interest in mutual funds and pension plans, would contribute to making hundreds of thousands of Americans into millionaires and spark a bout of takeovers that stunned and frightened business elites… .”
When we say ‘wealth’, the assumed subject is financial and physical assets distinguished by their transactional value. This quantitative view is a legacy of greek rationalism. But the Sanskrit ‘artha’ has always meant much more. Artha is one of the purusarthas which constitute the aims of life
In Big Change and the much older Lords of Creation: The History of America’s 1 Percent (1935), Allen had told the American story through the amalgamation of industry and finance, the merger of retail, financial institutions, railroads and automobiles. His insight into the pre-Depression era “sharp practices” (most notably insider trading), ineffective regulators and the crash of 1929 would ring just as true in 2008. But the moral of Allen’s story is that none of that takes away from the imperative of wealth creation in society as a result of its pursuit by individuals even when they are not running an “old time country store” but big decentralised institutions. What happens in one economy when it crashes from the most prosperous and technologically advanced in Europe to a hyperinflation that raises the cost of bread to three billion marks may not have been replicable in another but, as social historian Harold Perkin argued, “The key to the formation, survival and decline of all historical societies is their use of surplus income and resources. Without the extraction…no society, beyond the most primitive, would be able to afford the protection, law and order, administration, defence, spiritual advice, personal services, cultural production and so on essential to its existence.” (“The Rise and Fall of Empires”, History Today, April 2002.) However, “Surplus extraction, without which civilisation and decent human life are impossible, can too easily slip into exploitation and so lead to self-destruction.” The solution? “The ancient Greeks had a solution, though even they failed to implement it… It was the golden mean: ‘Nothing in excess’” (ibid).
So, we are back at joining the necessity of the pursuit of wealth to the need for its equitable distribution. But while the degree and ethics of the former may be contested, the latter is not possible without the former. Without incentive one wouldn’t seek wealth and that incentive is to improve one’s material condition. Competition is built into the pursuit. Take it away, and the fate of the Kwakiutl is everybody’s. In Allen’s poignant words: “The story that I propose to tell has deep shadows in it. Some of those shadows are dark today. It is emphatically not a story of paradise gained…Yet in the main it is, I think, a heartening story.” Willy Loman has our sympathy. But we would do well to remember that Uncle Ben is just a caricature.