We Forgot Something Important about the Ultra-Rich’s Role in Society

And it’s about time we remembered it before it’s too late

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As a young boy, Godric of Finchale sifted through sand, hoping to find salvageable goods from shipwrecks. Later, he became a peddler in Lincolnshire, England, then a sailor, and eventually a merchant.

Despite his humble beginnings, Godric made a small fortune from trade — some sources claim he might have even been involved in piracy, which was not uncommon for traders of that era. But one day, he fell to his knees and decided to renounce his wealth and live as a hermit.

Today, we know him as St. Godric, and he’s one of the few medieval saints who followed a similar path from riches to rags and prayer.

After all, medieval Christian theology condemned greed as a capital sin and, consequently, saw rich men as sinners. This belief was so pervasive that even many of the rich believed hoarding wealth was wrong. But it wasn’t just a medieval thing. Throughout the ages, and due to both religious and cultural ideas, the accumulation of wealth and the wealthy themselves were often treated with at least a modicum of suspicion, unease and scorn.

Fast forward to today, though, and the annual ‘rich lists’ spark as much admiration as unease and anger, if not more, and you’ll have no problem finding people outright worshipping those rich as Croesus, even if it’s on the altar of their own unpaid bills and crippling debts.

It’s quite baffling how come we did this U-turn.

But something else seems perhaps even more surprising, namely, what we seem to have forgotten about the ultra-rich along the way.

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In his recently published book, As Gods Among Men, economic historian Guido Alfani makes a compelling case for why the ultra-rich in the West were tolerated in the past despite beliefs that painted them — and their accumulated wealth — as immoral. The main reason? They proved themselves useful to society.

In Ancient Greece, specifically Athens, the ‘voluntary’ contributions by the wealthy citizens — called epidosis — played a crucial role in contributing to the public good and increased manifold during major crises such as famines, epidemics and wars. The economic elites were also expected to engage in patronage of choruses, schools, temples and other public institutions. This practice, in turn, gave them a sense of personal security — since people would be less likely to revolt against them — and some control over the political system. However, it was also in line with the philosophical thought at the time.

According to Plato, magnificence — which comes from the Latin magnum facere and means, literally, to do something great — was one of the integral virtues of the philosopher-king. Meanwhile, according to Xenophon, a key part of magnificence is precisely conspicuous spending for the public good. But it was Aristotle whose views on wealth were perhaps the most influential. As he writes in The Nicomachean Ethics:

Wealth is evidently not the good we are seeking; for it is merely useful and for the sake of something else.

In other ancient societies, like the Roman Republic, the situation was fairly similar. The rich had to sustain substantial expenditures for the public in exchange for peace and the pursuit of their political ambitions.

Things became arguably more drastic in the Middle Ages. Medieval theologians — like St. Thomas Aquinas — regarded the rich as socially troublesome sinners and thought building large fortunes should be discouraged. Some even argued that they should be expelled from cities as their presence could anger the people and destabilise society. (Although it should be noted that the nobility was largely excluded from these beliefs, as their superior access to resources was viewed as ‘part of God’s plan.’)

The latter idea eventually led to the introduction of ‘sumptuary laws,’ which imposed constraints on ‘visible’ expenditures, like clothing, travel, feasts, etc. Additionally, and from as early as the twelfth century, some places introduced ‘forced loans.’

Still, as wealth inequalities became increasingly more pronounced, reaching a peak around the late Medieval period, occasional contributions weren’t seen as enough. As Alfani notes:

As the richest concentrated more and more resources in their hands, they also had to give back an increasing amount of them (…) in order to avoid mass suffering and starvation (and consequently, rioting and anti-rich violence) at the bottom of the wealth pyramid. Finally, in times of dire crisis the rich were expected to contribute with their private resources to public needs.

It’s in this context that the social function of the rich as public ‘barns of money,’ as Tuscan writer Poggio Bracciolini put it, really solidified. And historical evidence shows that, for centuries, the ultra-wealthy indeed allowed the public to benefit from their private resources, not just through charity, patronage, or forced loans but through heavy taxes paid whenever needed. Some, like Cosimo De Medici, who in 1434 returned from exile and saved Florence from financial catastrophe, even did so voluntarily.

Eventually, however, the public’s expectations for the wealthy elites changed. And, to an extent, so did our views of them.

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Somewhere along the way, the accumulation of private wealth transitioned from being seen as ‘definitely bad or sinful but potentially useful for the public good’ to ‘a mark of success and proof of hard work’ and even ‘a fast track to heaven.’

According to German sociologist Max Weber’s thesis of the ‘Protestant ethic’, this change began in the early sixteenth century with the Protestant Reformation, a religious movement which, among other things, reframed the pursuit of material success as rational and good. One branch of Protestantism, Calvinism, even viewed it as evidence of one’s salvation.

This new cultural framework, combined with a variety of other factors — most notably, though, colonial expansion, the Atlantic slave trade and the Industrial Revolution — could explain why countries in Northern Europe, where Protestant ideas became most influential, experienced much faster growth than the old centres of wealth in the Mediterranean region.

After all, hard work was essential to prove oneself worthy of God’s favour. Although, in reality, this often meant putting others to back-breaking work and then hoarding the fruits of their labour — which, in the case of colonisation, were frequently stolen through force or fraudulent treaties — like your afterlife depends on it. This ‘Protestant ethic’ was then also complemented by the ‘survival of the fittest’ belief derived from Social Darwinism, which posited that those who become the most powerful and wealthy in society are innately better and, thus, deserving of their riches.

But as wealth accumulation acquired religious and positive significance, and even when achieved through predatory behavior, the rich became increasingly reluctant to share it. Interestingly, a recent study found that Protestant regions of Germany quickly became much more impoverished than their Catholic counterparts.

Still, even in the early and mid-20th century, the idea that the rich must contribute their fair share — especially in times of crisis — prevailed. In 1924, Winston Churchill argued in favour of high inheritance taxes in the UK, seeing them as ‘a certain corrective against the development of a race of idle rich.’ Meanwhile, US President Franklin D. Roosevelt’s New Deal specifically included reforms to redistribute wealth in response to the Great Depression.

Until the 1980s, the top rates of income and estate or inheritance taxes also remained quite high. In 1975, the top income tax rates were 83% in the UK, 70% in the US, 72% in Italy, 60% in France, 56% in Germany and 47% in Canada.

But then, well, things started to change — again — with the spread of pro-rich fiscal reforms, new opportunities for tax evasion and avoidance and deregulation of the financial sector, all of which have contributed — to varying extents — to the situation we are in now.

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Globally, the richest 1% now owns almost half the world’s wealth.

Wealth inequality is clearly and rapidly becoming one of the most concerning issues of our time. And if left unchecked, it could reach levels we haven’t seen in a very long time — or even at any other time in history.

For several reasons, this is quite paradoxical. We live in supposedly democratic states with unprecedented access to information and more citizen rights than ever before (at least on paper), and yet our societies aren’t significantly less unequal than medieval ones. Plus, we’ve become infinitely more tolerant of the ultra-rich than we used to be.

But what purpose do they serve today? Are they in any way useful to the billions of people on this planet, many of whom live below or slightly above the extreme poverty line?

Some argue that the wealthy drive innovation, create jobs, and stimulate economic growth. As far as innovation goes, there are plenty of other ways to foster it, such as innovation inducement prizes. As for the other two arguments, they have been debunked numerous times at this point — even by self-described ‘proud capitalists.’ Still, economic growth isn’t necessarily positive, especially when you factor in its massive environmental and societal costs.

Some others also point to philanthropy. Sure, the rich donate vast sums to charitable organisations. In the US alone, 100,000 private foundations currently control nearly $1 trillion in assets. Yet, up to three-quarters of these funds are offset against taxes. Apart from the benefit of tax breaks, philanthropy also allows the rich to control which social issues receive resources and which don’t.

Not unlike the not-so-good old times, true. Only today, we have institutions that allocate resources towards causes we decided, collectively, are the most important. And they could likely achieve much more if they weren’t starved of resources by the very people who claim to care about the common good.

On top of that, and as Alfani points out in his book, the rich are no longer acting as socially useful ‘barns of money’ in times of crisis. We witnessed it during the Great Recession of 2008–9 and again, even more pronouncedly, during the Covid-19 pandemic. The latter actually created new billionaires — 537 new ones in 2022 alone — and allowed those already uber-rich to become even richer while exacerbating extreme poverty among the world’s poorest.

Amidst these crises, the wealthy also opposed impactful and crisis-related fiscal reforms — often leveraging their considerable political influence — and yet if their companies face trouble, they expect the taxpayers’ money to come to their rescue.

So, why do the ultra-wealthy need to exist at all if their utility for society is marginal at best and negative at worst?

What’s the purpose of immense wealth if, even in times of crisis, it’s locked away from most of the population?

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The good news is that there’s growing public support for increased taxation on society’s wealthiest members. However, while there’s been much discourse on the topic, there’s been very little action so far.

It’s really about time we remembered, though, that the existence of the ultra-wealthy persists because we allow it.

And that if a social arrangement fails to benefit the vast majority of people, we can — and should — change it.

At least while we still can.

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