The Rich Difference

What’s the difference between rich people and poor people? Are the rich people smarter, harder workers, more moral? I don’t think so. I don’t have to go far to find poor people who are smart, hard working, live their principles, yet remain poor. Likewise, it’s not hard to find rich, lazy, amoral nincompoops. (Just look in Congress.)

Rich people have the advantage of seeing “disruption” — having someone move your cheese, often right out of the door — as a temporary setback that exposes new opportunities. For poor people, every disruption forces them deeper into an economic hole they have no hope of escaping.

Rich people typically do not get fired when their child misses the school bus and they end up at the office fifteen minutes late. When rich people are fired, they often get handsome severance packages.

Once jobless, a rich person can afford to shop around for a job where they get to do what they love. Extended unemployment for a poor person means steadily decreasing opportunities and the real chance he or she may never find steady employment again.

Rich people can declare bankruptcy and bounce back several times. They have friends willing to bankroll new ventures, access to skilled lawyers, accountants who can help shelter assets. Poor people cannot defend their legal rights, assuming they know what they are in the first place. If they don’t know what their legal rights are, they cannot afford a lawyer to tell them.

Sex is not economically risky for rich people. Disease can be handled by a doctor. Unplanned children can be supported without too much difficulty. Abortions can always be arranged despite the waiting periods or long travel arrangements forced on poor people by anti-choice advocates.

Rich people can even be incarcerated and still have their name be a brand. Poor incarcerated people will find it difficult to do anything at all once they’re released.

The upshot of all of this is that rich people can make bad decisions, take risks that turn out badly, and survive plain-old bad luck. Poor people can not. To overcome poverty, they have to be more cunning, more lucky, more capable than the rich competition. Often, they have to hide they are poor.

A central assumption of conservative, libertarian, Randian economic attitudes towards poverty is that poor people are poor because they made bad decisions in life. To a certain extent, that is true. But the reverse is not necessarily true: rich people are not rich because they made good decisions. Many will tell you that they failed their way to success. If you are rich, failure is a growth opportunity. If you are poor, failure is an existential calamity.

This is a powerful constraint on economic mobility and personal freedom; it is the economic injustice. It is why the poor stay poor, and it is what social welfare programs should try to address. And for liberals, that is what the social services — the social safety net — is about. Not making poor people’s lives comfy, coddling the lazy. But giving the poor some of the same opportunity to make mistakes and recover that is enjoyed by all of the rich.