Money is something everyone wants, seemingly without limit. Just the prospect of getting it while not really earning it can turn good men into beasts.
And therein lies a serious problem. Money as a reward for a job well done is a sign and seal of a good life. Money showered on anyone by accident of personal privilege or access can lead to disaster, personal and social.
But for strange reasons, humans are drawn to disaster. We just keep doing it.
One of the great movies of the 20th century is 1948’s “The Treasure of the Sierra Madre,” starring Humphrey Bogart. Two burned out and impoverished Americans living in Mexico join a grizzled old gold prospector on a hunt. The main action is psychological: what the discovery of gold does to their minds, their trust, their morality, and their lives.
The viewer gets a front row seat to how normal people can truly lose all sense of proportion and moral clarity when faced with the prospect of unlimited wealth. Once trust in each other is gone, everything including sleep is vanquished.
Ask any truly wealthy person you know. They will tell you that they learn to suspect every bit of flattery, every new friendship, every kind word. It’s very often true that others are only after their money. The hangers on don’t want to work for it. They want to scheme for it. The prospect of something for not much effort makes people crazy.
The topic comes to mind as news reports say that Mick Jagger has no intention of passing on his half-billion fortune from his catalog to his kids. Why not? Surely every parent wants to bring comfort, wealth, and security to their kids. Why would a parent deny them that?
The reason is clear to every wise person: Infinite financial privilege and access doesn’t build good character. Ultimately, people don’t obtain happiness by living well without having earned it through the sweat of one’s own brow. We need to experience the relationship between work and reward. This is what affirms us as thinking, creative, and productive human beings.
Take that away, replace it with infinite financial reward, and what becomes of us? We become spoiled, entitled, slothful, and unempathetic. We see ourselves as above others and end up treating others badly. Our very morality and humanity come to be diminished. And it doesn’t yield a happy life either. The caricature of trust-fund babies is true. They rarely amount to much because they don’t have to. They very quickly take their cushy lives for granted and coast until the bitter end.
This is a huge problem for every parent, even those of modest middle-class means. From the time their children are infants, parents want to provide shelter, food, health, safety, happiness, and experiences. This is the job of parents and they do it well. They make every sacrifice to make sure their children do not suffer but rather enjoy a better life than they did growing up.
But at some indiscernible point in the child’s life, the parents must withdraw and let the child find their own path to happiness. Very often, the kid doesn’t want this.
Still, the comprehensive support cushion has to be taken away. All children at some point must be kicked out of the nest, even if that means a hard landing on the ground, before they have really learned to fly.
For parents, this can be the single hardest moment of their lives. You are in a position to continue to provide comfort and security, and yet you know that this isn’t what is best for the child. What’s best to withdraw that support, knowing full well that there will be a transition period in which the young adult will experience failure and even privation.
Knowing how to navigate this period in life takes incredible discernment, wisdom, and long-term thinking. It’s always easier to continue the material provision forever and spare the young adult the terrors of the world. But that choice doesn’t build character. We’ve all known parents who couldn’t manage this well, and they end up with 30-somethings living in the basement apartment and scamming the disability office.
Economists call this the Samaritan’s Dilemma. Helping another through a time of need—whether a family member or a stranger—is virtuous and right. This is what the merchant did for the poor man on the side of the road. Sadly, continuing and regularizing such charity creates a moral hazard. He could show up the next week and find ever more people in need of his charity. At some point, he must say no, for the good of those who are trying to take advantage.
Continuing the Samaritan’s help past the point at which people could have already found a way toward independent living is unwise, even cruel. Have a look at every city that has decided to build large camps for the homeless in order to help people out. They very quickly find that they have more homelessness than ever.
This speaks to a fascinating paradox of freedom and the prosperity it generates. The virtues we associate with good character and a good life—hard work, discipline, honesty, keeping commitments, sobriety, creativity, empathy—are born not always of prosperity but more often of privation.
Good habits are formed by need and the actions undertaken to alleviate want. If we never encounter privation, we don’t develop solid values or become good people. We never come upon situations that test our volition and hone our problem-solving skills. Indeed, talk to anyone of a certain age and ask about defining moments in their life. They will usually tell a story about a time when they didn’t know where their next meal was coming from, or getting fired from a job, or living in a dumpy place, or something that is deeply regrettable. The hero’s journey is fighting through the dark place and emerging on the other side.
But here’s the paradox. The freedom to try, and the good habits it cultivates, yields wealth that further reduces need and provides ever less incentive for people to become better. We experience this in our own families, but we also experience this as whole societies.
Three years ago, the country was absolutely swimming in stimulus payments to individuals, families, and businesses. We were in lockdown and doing the opposite of everything recommended by the work ethic. We were forced into laziness. Then tens of millions were rewarded for it. This went on round after round, to the point that many people were tempted into thinking that it would last forever.
People rightly worried about the fiscal implications. It blew the budget and wrecked federal finances. The Federal Reserve supported the program with trillions in purchases of new Treasury debt. That unleashed the closest thing we’ve experienced to helicopter money. The result has been a crushing inflation that has wiped out the financial gain of the stimulus payments. In other words, it collapsed into a racket.
But all that aside, there is another and deeper problem with the stimulus payments. They wrecked the work ethic, routines, and expectations of a whole generation. The free money falling from trees, completely unconnected with anything done to earn it, shattered the relationship between work and reward. That’s the kind of thing that eats away at the human heart and soul. It was like turning a whole nation into temporary trust-fund brats.
Parents know or should know that this isn’t a good way to manage children as they get older. That approach dooms kids into a lifetime of dependency, shattering thrift, prudence, productivity, and good character. Our government took the worst model of parenting and did it for an entire nation.
And think of this: At least the trust-fund kid has to face his parents and feel some sense of embarrassment. The beneficiaries of trillions of stimulus payments didn’t have to do this. They were just glad to see the free funds arriving in their bank accounts. People had no accountability for what they did with it.
Here we sit with a nation of people with wrecked health, low work interests, substance addictions, financial insecurity, and deep unhappiness. Savings are low because the money is gone and the future is grim. Debt is high because people made financial decisions without thinking of the future. Vast numbers live paycheck to paycheck while realizing too late that they need to curb consumption. Above all else, people are angry and confused about life basics now.
Much of this is due to terrible policy stemming from profound ethical confusions. In case you want to take my recommendation and see “The Treasure of the Sierra Madre,” I will spare you the spoiler. But this much is true: The prospect of endless free money is nearly always an illusion—and a deeply corrupting one.
