The NBR's Rich List today begs us to celebrate the richest of the rich for, well, being rich. Me, I'd like a broader definition of success if it's all the same

Good on 'em, eh. Yeah, those Rich Listers who again are being draped before the nation like so much fine ermine deserve a pat on the back, if for nothing else than the fact that, in most cases, they've shown how to stay in this country and succeed financially.

I'm especially delighted to read in the NBR this morning that, according to my Newstalk ZB sparring partner Ellen Read, "alongside the established old family money and commercial risk takers of recent years, we are pleased to recognise new faces". It's the new sprouts of growth that are most welcome.

I'm not here to pound the rich just for being rich, and to ignore the good works, or even just the hard work, of some on that list. But there are some 'buts' coming, as you might expect.

I take exception to Nevil Gibson's bold declaration that these 151 very, very wealthy folk are by definition of their wealth "national treasures". Is enriching yourself inherently really something of service to a country? Prosperity is to be valued, as a magnet, a job creator, an opportunity for philanthropy, possibly as a way of improving our terms of trade and our international profile, and more.

But Gibson makes no distinction as to what people do with that wealth. If any of these wealthy individuals buried their assets in a cave or spent their cash on crack, Gibson seems to still want to celebrate them.

The Ercegs, for example, given the role of alcopops in New Zealand's drinking problems, might not be deemed as worthy of praise as Sir James Wallace, who has built a great export business and given millions to the country via his art prize and donated collection. Shouldn't thinking New Zealanders draw a line in the jubilation between a Sir Stephen Tindall and a Graeme Hart? 

Getting yourself super rich on its own is no more worthy of national celebration than learning to losing a few pounds or quitting smoking.

What's more, if history teaches us anything, it's that there are likely to be some crooks, or at least a dishonourable few, on that list. Our wealthiest, from Michael Fay and the other grabbers of the '80s through to the finance company directors of more recent times, hardly have a pure, untarnished reputation.

And what about how they made their money? For a serious business paper, isn't it remarkable that there's no mention in the NBR of the fact that so many of these rich listers made their money in property or the primary sector? We have been told for years, by the likes of the NBR, how we need to diversify, how we won't get rich selling houses to each other. And quite right too.

As we speak, the government is trying to "re-balance" the economy towards exports and away from property, so why is there no discussion of this core issue? Perhaps because they were too busy celebrating wealth for the sake of it? Or does a property developer glisten as much as a high tech exporters in the NBR's eye?

You know what? When it comes to celebrating people in the media this week, I'm as inclined to offer a pat on the back to the beneficiaries featured on Close Up, in some of the best work that programme has done in a long time. Simple voices of people living on benefits, cutting through the stereotypes to the daily grind.

If you haven't seen any of the profiles this week, take a look here.

Without the benefits and privileges of wealth, they are raising families, making sacrifices, improving New Zealand. They were resisting the temptation to break the law, to hit their kids in frustration, or to become another negative social statistic despite the struggle for life's basics. They were getting by on very little and hoping for better for their kids. They may have made some bad choices, they had been struck by ill health or ill fortune, but they were getting on with life and doing their best.

It's not the NBR's job as a business paper to praise such folk, but as a country, I'd be just as happy to see them declared "national treasures" as many of the wealthiest. Gibson talks about the "hard work, persistence and dedication" of the richest. Well, ditto.

I reckon raising a child from hardship to be a contributing citizen is at least as much a mark of "success" as building a company worth $100 million.

So sure, go ahead and praise economic success. Praise jobs and smarts and risks and determination. It's all crucial to this country (assuming it's done right and fairly). But let's also honour other forms of success, however humble.

Which leads me to my last thought. I was struck by another comment by Read, quoted in the New Zealand Herald yesterday. Having interviewed some of the listers, she said:

"What emerged again and again was the need for a regulatory and operational environment that's conducive to wealth creation," Ms Read said.

"Eliminating excessive regulation, easing constrictions and freeing up the entrepreneurial spirit were regarded as essential to enabling wealth creation."

Which just made me a bit sad. Is the core message from these people not anything bigger than 'let's make it easier for me to get richer'? Is a self-serving ideology all they've got to offer in terms of an economic or political wish-list?

What's worse, is that not only is it a self-serving argument, it's not credible. The very business-friendly Heritage Foundation in the US ranks New Zealand 4th in the world in its 'economic freedom' rankings, behind only Hong Kong, Singapore and Australia. It declares:

With a transparent and stable business climate, New Zealand has created a dynamic entrepreneurial environment. The average tariff rate is low, and commercial operations are aided by a flexible labor market and efficient regulations. Inflationary pressures are under control, and foreign investment is welcome.

What these rich listers seem to miss is that countries aren't run purely to create wealth. That's why they're called countries and not companies. While that's an important part of the job, government regulates and creates an "operational environment" that seeks to achieve numerous other goals as well - equality, environmental protection, civil rights, an educated population and so much more.

Regulations may well constrain wealth generation, especially for these folk. And I reply, 'so what?'. The goal is much bigger than you. Really, well done and all, but I'm much more ambitious for New Zealand than that.

Comments (15)

by Niko Kloeten on July 29, 2011
Niko Kloeten

Is enriching yourself inherently really something of service to a country?

This is nonsense. In order to "enrich yourself" you must produce something that other people value (unless you use state force to expropriate their wealth).

No-one forces people to hand their money over to, for instance, Sir Stephen Tindall, who has improved the lives of New Zealand's poor more than just about anyone by providing goods at affordable prices.

By responding to the needs and wants of the masses, these businessmen (and businesswomen like Diane Foreman and Jan Cameron) perform more of a public service than all this country's volunteering do-gooders put together.

You expect them to pay twice, first when they produce the goods and services that make us all better off (if they didn't we wouldn't buy them) and again when it's time for them to file their tax returns.

If it weren't for the capital accumulation by the "rich" people you so deride we would still be living in the stone age. But at least we would all be in equal poverty.

by william blake on July 29, 2011
william blake

Thoughtful piece Tim, thanks.

Niko; when you say the rich pay twice; once when they produce the goods and services and then when its time to pay tax, you are wrong.

Costs incurred in production are tax deductions so it is not a cost.

 

by Andrew R on July 29, 2011
Andrew R

Quite a few on the list have made their money from property speculation and from chopping up and looting companies.  Not all good for New Zealand.  And a few manage their affairs to ensure they do not pay income tax in New Zealand (clue: who is overseas at least 6 months a year) = bludger in my book.

by Tim Watkin on July 29, 2011
Tim Watkin

Niko (NBR staffer), I think you'll see that I praised those on the rich list who have aided the country. The first sentence is: "Good on them, eh". So I'm not sure where you get the idea I'm deriding them.

I'm simply saying that creating wealth for yourself is in and of itself not anything special. It's how you make the wealth and what you do with it that is worthy of praise - or otherwise.

I'd say it's simplistic to say that the only way to get rich is to produce something that people want. The propoerty speculators did not necessarily produce anything; same for some of the investors' investments, too. Some people just get rich clipping the ticket... or inheriting the wealth.

And these businespeople perform more of a public service than all the volunteers put together? Are you serious? More than all the sports club folk? and girl guides leaders? And church workers? And foodbank operators? Why then do so many wealthy folk in the US exort people to volunteer and push it as a core of society?

And why on earth would you assume that equality and poverty go hand in hand? There's a fair bit of research around that suggests the opposite.

Oh... really, every line gives me ammo, it's too good to miss... These people "pay" to produce their own goods and get rich? How do you figure that? I thought you'd just said that they produce these goods as a public service...

by MikeM on July 29, 2011
MikeM

Niko: This is nonsense. In order to "enrich yourself" you must produce something that other people value (unless you use state force to expropriate their wealth). [--snip--] By responding to the needs and wants of the masses, these businessmen (and businesswomen like Diane Foreman and Jan Cameron) perform more of a public service than all this country's volunteering do-gooders put together.

Not to say there aren't rich people out there doing useful things, but what about negative externalities that arguably make the country a worse place to live as a consequence of selling people something they want?  Tobacco companies (for instance) get rich selling people stuff they value, which also means I have to hold my breath running through a smokers' gauntlet every morning because the air on the street is disgusting.

Sure, we can regulate them even more, but....

by alexb on July 29, 2011
alexb

The Rich List reminds me of an episode of the Simpsons where Bill Gates is parodied, saying "I didn't get rich by giving money away."

The people on this list are probably just there because they are more ruthless, selfish, and admittedly hard-working and single minded. A society that celebrates those attributes is never going to be egalitarian and just.

by Tim Watkin on July 29, 2011
Tim Watkin

Alex, you're in danger of generalising the other way. Just as there are people who prosper from their ruthlessness, there are the other people that Niko champions who make money and make the world a better place. The two aren't mutually exclusive.

But having said that, it seems to me harder to get incredibly rich and stay committed to a sense of public service or altruism. For a start, getting rich requires remarkable focus of time and energy.

There's a reason why it was said that it's harder for a rich man to get into heaven than for a camel to get through the eye of a needle. A focus on wealth often means taking your eye of your neighbour's needs, of becoming more focused on self and less connected to your community, and your humility is put at risk.

Which is another reason we should be careful when we talk about celebrating the rich. I'm not sure it's entirely good for them.

by stuart munro on July 30, 2011
stuart munro

πολλοὶ γὰρ πλουτεῦσι κακοί, ἀγαθοὶ δὲ πένονται:
ἀλλ' ἡμεῖς αὐτοῖς οὐ διαμειψόμεθα
τῆς ἀρετῆς τὸν πλοῦτον: ἐπεὶ τὸ μὲν ἔμπεδον αἰεί,
χρήματα δ' ἀνθρώπων ἄλλοτε ἄλλος ἔχει.
Some wicked men are rich, some good are poor;
We will not change our virtue for their store:
Virtue's a thing that none can take away,
But money changes owners all the day...

by Tim Watkin on July 30, 2011
Tim Watkin

It's all Greek to me Stuart. Solon, see ya round, I'm off to bed now.

Heh.

 

by alexb on July 31, 2011
alexb

Yeah I'm not for a second suggesting all rich people are evil or immoral or anything like that, just making an observation that a society like the U.S.A, or India, who have a comparatively large number of super wealthy individuals, also have a huge number of poor who are stuck in the poverty trap because of an economic system which on paper appears to give everyone a fair go, but in practice manifests itself as a widening inequality gap. Gearing a society towards accumulation of wealth for those at the top, eg cutting top tax rates, will never bring about a society where people actually have a chance to get out of the poverty cycle.

by Brendon Mills on August 09, 2011
Brendon Mills

Niko: Everytime I go to the warehouse I see long lines of people at the returns counter.

Quite frankly if anyone thinks that I should be somehow bowing and scraping and doffing my cap to someone because they have more money than me can very much think again.

I dont begrudge the rich their wealth, even though I do think they should be paying more tax so we can have things like health and education etc. I would love those on the rich list show up to a public hospital and tell the patients there why they should go without treatment because the rich dont want to pay tax - I just dont want to worship them.

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