Pity The Rich

The top one percent's share of US household net worth rose from 22.8% in 1989 to 30.3% in 2023, fanning calls to eat the rich. But envy assumes a high conversion rate from wealth to welfare. That conversion rate falls when the goods people value most are scarce even at very high willingness to pay. One place this shows up is in the gap between wealth concentration and measured consumption dispersion. In one prominent series, the 90/10 ratio rises about 7% for consumption since the early 1960s, versus about 29% for income (see here).¹ The exact magnitudes are contested, but the basic point is hard to escape: beyond a point, the rich cannot spend their advantage in proportion to how quickly it accumulates.

Money still buys plenty. Bigger homes. Better seats. Less friction. More control over time. What it does not reliably buy are large increments in the goods that dominate most people’s objective function once comfort is secured: healthy life-years, sustained energy, and preserved cognition. A man at the 95th percentile of household income, earning around $224,000 per year, at 40, can expect to live to about 86 (see here). A man at the very top of the distribution, earning $1.95 million or more, can expect to live to roughly 87. The income gap is almost an order of magnitude but the expected longevity gap is under a year. In economic terms, marginal dollars at the top purchase very little additional health because the relevant “technology” is missing.

When deep goods are thin, money flows into what is legible. Status goods are easy to supply because they are excludable and differentiable. A Birkin bag, a Patek watch, a first-growth Bordeaux may be excellent, but much of the premium is for scarcity and recognition, not proportional improvements in function. (I sometimes compare these goods to a currency garland. Note also that I am eliding over the yet more provocative Veblen goods.) The purchase is not evidence of shallow preferences so much as a response to a shallow menu. When the market cannot sell ten extra healthy years, it sells visibility. The rich buy what is available.

That constraint at the top is informative because it is not personal. It describes the ceiling, not merely who sits beneath it. It also reframes what “developed” should mean. By nineteenth-century standards, the United States is highly developed. By the standard of 24th century, it is undeveloped.

Once you see the issue as a ceiling, the question shifts from how the rich allocate their dollars to how society allocates its effort. Markets are excellent at allocating within a frontier. They are less reliable at moving the frontier, because many of the key inputs have public-good properties: basic research with spillovers, data infrastructure, and the slow accumulation of shared scientific knowledge that no single actor can fully appropriate. That is why the ceiling question becomes a political economy question, and why it shows up in budgets. Public spending is tilted toward financing care within the existing frontier rather than pushing the frontier outward. In 2023, federal and state governments spent on the order of \$1.9 trillion on health care programs and benefits. Over the same period, the NIH budget was about \$48 billion and the CDC budget about \$9 billion. Within NIH, the National Institute on Aging received about \$4 billion, and the Division of Aging Biology about \$337 million. These are not precise apples-to-apples comparisons, but they capture the scale: we devote orders of magnitude more to paying for care than to understanding and slowing the processes that generate late-life disease.

Warren Buffett likes to make a related point: even the poorest Americans today live better than Rockefeller did as yesterday's luxuries are ordinary today: antibiotics, air travel, information (see here; see also the incomplete royal deaths from dysentery list). When the ceiling rises, everyone gains; that is the history of solved problems. But on healthy lifespan the ceiling has not risen. There is little yet to diffuse.

So before you envy the rich, ask what they can buy that you cannot. Comfort, yes. Convenience. Status. But not the deepest goods. Pity them, because their failure is diagnostic. They have tested every door that money can open and found that the one that matters is locked. It is locked for everyone.

¹ Krueger and Perri similarly find that from 1972–1998 the dispersion of after-tax labor income rose substantially while the standard deviation of log consumption rose by less than 2%, implying only a small change in typical percentile consumption gaps over that window (see here). See also Aguilar and Bils which comes to a different judgment but the assessment rests on strong assumptions.