Wednesday, May 5, 2010

Where Epicurus Went Wrong: Cheerful Poverty or Cheerful Wealth?

{{en|Portrait shows Florence Thompson with sev...Image via Wikipedia

Epicurus (341—271 BCE) in one of his precepts says:
Love of money that is unjustly gained is sinful; if justly gained, shameful. For it is unseemly to be merely parsimonious even for a just person. Cheerful poverty is an honorable thing.

We can all agree with the first clause: ‘Love of money that is unjustly gained is sinful.’

In Epicurus’ time, the word sinful had an all-inclusive connotation: it could be used in a religious, legal, and an ethical manner. The money that Judas Iscariot earned for his betrayal was sinful and unethical, but not illegal.

What was illegal –in the early 20th century— was the immense fortune that Jay Gatsby accumulated to regain his lost love Daisy Buchanan. Given Gatsby’s shadowy connections and illegal businesses, we infer that his wealth was “unjustly gained.”

But for Epicurus to say that money justly gained is shameful is disingenuous. Only an ascetic, a monk, or mendicant can say such a thing. Adam Smith and other philosophers have argued convincingly that through money (medium of exchange) we create the gains that are the basis of wealth. John Maynard Keynes and other economists trace ‘saving’ as the equivalent of ‘investment.’

For individuals as well as for nations, money justly gained through trade is the bedrock of prosperity.

Lets’ analyze the last sentence: “Cheerful poverty is an honorable thing.” How can poverty ever be cheerful, for poverty is the source of all ills? How can poverty be an honorable thing, since poverty and crime go in tandem? The natural instinct of human beings is to barter, to exchange, to trade and by our wits come out ahead. Why the impulse to trade? We do it to improve our kind, to improve our lot in life, and to improve the lives of our loved ones.

Nature has wired into us the instinct to do business: to engage in trade. While many scientists argue that what distinguishes humans from other species are that they walk upright, that they have a thumb, that they are tool makers, that they developed a consciousness—the simper reason is that humans want to come out ahead.

To conclude, the secret of prosperity and wealth is the desire to accumulate wealth, but that desire must be supported by an even deeper desire: to improve your loved ones. If all we want is to be rich for the sake of it and to hoard money for ourselves, then Epicurus may be correct.

Friedman: social responsibility of business is...Image by ocean.flynn via Flickr

After a long (40 years), productive, and successful career in business, I now teach college. The articles that follow are all written from personal experience.

If you are interested in seeing how I achieved personal success in the United States, you may find my book of short stories East of Tiffany's interesting. Some of the stories are based on my life as an executive, investment banker, and financial adviser to wealthy investors in the East Side of Manhattan.
Close to half-million people have read East of Tiffany's so far. Order your copy from either or Barnes and Noble.
Since English is my second language, Mary Duffy --a master of the English language-- aided me not only with the editing, but she also contributed her own stories. I love her writing in "When You Wish Upon a Star." This is a story based on a personal friend's life.

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