The newly rich spend their money lavishing themselves and those they know with items, but also with protection. Money buys protection. From paying penalties that don’t hurt their net worth to buying favours from people in power. This goes on everywhere, just in varying degrees, private and public.
I was at an alumni event today. Also present was my ex-lecturer from NUS, a Canadian lady who’s been in Singapore for 4-5 years now, and we got to talk about many things. One of the most poignant conversation revolved around the concept of the ‘new rich’. Singapore is part of the the ‘new rich’ countries, which she suggests might be the biggest reason why we spend an exorbitant 6 percent of GDP on the military each year.
Granted, she said, Singapore is a rich country surrounded by much less wealthy countries, and that makes for a legitimate security concern. But where she’s from in Canada, after hundreds of years of history and learning, she believes her government would instead be focussed on redistributing that wealth—not by gifts but by government-led schemes that institutionalise certain employment practices and so on—to its neighbours instead of accumulating weapons in the name of defence. That way, they reduce the imbalance in the neighbourhood. A rising tide lifts all boats, the theory goes.
I’m not sure whether the Canadian government has indeed done such a thing, but I believe in the core assumption that we (society) get better at managing our wealth with time. Math needs time to work on data, and in turn, data needs time to be collected. Eventually we’ll tell what works, what doesn’t, and what we’re not sure about yet.
The theory explains why in general, European countries are more environmentally conscious and put money where their mouths are with carbon trading, strict emissions standards, environmental taxes and so on.
Perhaps it’s human nature to splurge in the wrong places when blessed with a windfall, and time—and ultimately wisdom—is the only antidote. Since wealthy people are often (mostly rightly) associated with assholery, I can’t wait.