Defining Wealth

The Christmas before last my son got a case of the flu he couldn’t shake. He had been running a fever for 8 days when he suddenly turned a bright pink all over as if he had just stepped out of a sauna. Then he developed itchy welts on his skin. Diphenhydramine (Benadryl) applied topically took the welts down so I knew the welts resulted from some kind of allergic reaction, but I couldn’t guess as to what, so off to the doctor’s we went.

The doctor looked at him and diagnosed strep throat. A $15 antibiotic and an over-the-counter cream for the itch and in a couple of days he was right as rain.

The pink skin and welts came from an interesting side effect of infection from the streptococcal bacteria that cause strep throat. The bacteria shed a protein called an endotoxin that has two effects on the body. First, it causes a dilation of the capillaries which causes a body wide blush. Second, the protein sticks to tissues in the body, especially the skin, which causes the body’s immune system to attack its own tissues. You might know of these effects under their historical name.

Scarlet fever.

My son had scarlet fever. Almost all children today get strep throat but few ever exhibit the secondary symptoms that were named scarlet fever, because they get treated with antibiotics before it progresses to that point. My son’s case progressed so far only because he got strep on top of getting the flu. The flu disguised the strep and let it last long enough to pump the endotoxin into his body.

Left untreated the endotoxins can kill by causing the immune system to savage the body’s own tissues. The chronically weak characters of Victorian stories were usually survivors of scarlet fever which left their heart muscles damaged. I treated the entire incident as an excuse to educate my children on the history of communicable diseases. Imagine, I said, if every time you got a sore throat you had to worry that it might lead to your death. Their great-grandmother helped by relating that when she caught scarlet fever in the 1920s she lost all the skin on her legs from the knees down. Her cousin died of it. Given the size of the welts that broke out on my son, he was in serious danger if left untreated.

Which brings me to John D. Rockefeller, the founder of Standard Oil.

In 1901, John D. Rockerfeller was regarded as the world’s richest man. His personal fortune at the time was estimated at 900 million dollars. In today’s money that would be something like 200 billion. By comparison, Bill Gates has an estimated fortune of $52.8 billion. Proportionally, Rockefeller was arguably the richest American, if not the richest human, ever.

In 1901, two of Rockefeller’s grandchildren, Jack and Fowler, ages 3 and 4, contracted scarlet fever. Rockefeller sought the best of care for them. He offered one physician the modern equivalent of $11 million to save the boys but the best physicians of the day could do nothing. The richest man in the world, the man who could buy anything, could do nothing but watch helplessly as his grandson Jack died of the fever.

Many people want us to think of wealth in terms of envy. We should make a pile of our money and compare it to the piles of others. If someone else has a larger pile, especially a much larger pile, then we should create some rationale for taking money away from them so the piles come out more even. In this view, money is more of a social score card than a tool for getting what you need. In this view, Rockefeller was many, many times wealthier than I will ever be. All the money that I will ever have would not have made a ripple if dropped into Rockefeller’s fortune. I have a molehill of money whereas he had mountain.

However, the true measure of wealth is not the amount of money one has but instead what the money one does have can buy. I bought the life of my son for a mere pittance, whereas Rockefeller could not purchase the life of his grandchild for all that he owned.

So of the two of us, which is the wealthiest?

It just not just in areas like medical care that I live better than Rockefeller. In 1901, even the wealthy did not have forced-air heating and cooling. Palatial mansions were cold and drafty in the winter and hot in the summer. My humble home has near perfect temperature regulation. I can travel farther, faster and in more comfort. Thanks to the internet, I can annoy the French without even getting out of bed. Increasing technology has also increased social and political equality by forcing the rise of specialization. There is no longer a mass of peasants or a proletariat whose identical skills make them easy to replace. The rich and powerful must bargain fairly or face a revolt of the specialists which can bring the economy to its knees.

The central threat of redistributionism is that it attacks the very creative process that produces the material wealth that truly makes our lives better. Redistributionism thinks short term. It gives immediate benefits today at the sacrifice of a better tomorrow. A redistributionist would be very pleased if he managed to give everyone today the same level of medical care that Bill Gates gives his own family, but the free market will eventually give everybody even better care than Gates could purchase with all his fortune.

I am wealthier than Rockefeller ever dreamed of being and I want my grandchildren to be wealthier than Bill Gates. Only the free market can give them that.

8 thoughts on “Defining Wealth”

  1. Shannon,
    Thanks for the thought for the day. You always help put things in perspective–because your perspective is so much broader. Surely the fact that the chances are pretty good we’ll see our kids reach maturity makes for greater happiness than we can imagine. Thanks for making us remember that – as well as appreciate the breadth of our luck.

    A doctor who was asked to save a wealthy & famous person a 15 or so years ago told me the family implied that by offering money and leveraging their status a cure would appear. They believed that the (major research hospital) had some cure in reserve, waiting for the rich & powerful to tap it. The doctor was bemused & offended; while not identifying the family, the hints were that it possessed money, status, and s member who repeatedly insists on a role as sentimental rep of the poor uninsured in the senate.

    Life trumps all. And this sense that being equal is more important than being free is the great enslaver (of our minds as well as our bodies).

    On a more mundate note than Shannon’s, look at the quite accessible Walmart or Target: whatever our tastes, the music we hear, the drama we watch or the books we read are acccessible in a way they weren’t to even the robber barons; we choose from a broader array of clothes, food, and hobbies.

    Thanks again, Shannon.

  2. Shannon, what you are describing is called “opportunity cost” in economic terms. It is the value in the things that have no price, and commonly compared to those items of luxury with a price tag.

    In personal terms, the opportunity cost of spending a Friday night drinking with your friends could be the amount of money you could have earned if you had devoted that time to working overtime.

    Opportunity cost need not be assessed in monetary terms, but rather, is assessed in terms of anything that is of value to the person or persons doing the assessing. The consideration of opportunity costs is one of the key differences between the concepts of economic cost and accounting cost. Assessing opportunity costs is fundamental to assessing the true cost of any course of action. In the case where there is no explicit accounting or monetary cost (price tag) attached to a course of action, ignoring opportunity costs may produce the illusion that its benefits cost nothing at all. The unseen opportunity costs then become the hidden costs of that course of action.

    I try to keep a close eye on my own “opportunity costs” because it is so easy to turn an envious eye to the proverbial “Jonses.”

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  4. There’s more scarlet fever going around. My daughter’s girlfriend had it with few symptoms, but that can be deadly.

    Everything old is new again.

    What a great analogy.

    It will be useful.

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  6. On a historical note,George Gipp died of strep throat.Let’s see,who played The”Gipper” in his most famous role?

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