This seems to be very much a case of "the categories were made for man, not man for the categories". It all depends what you mean by "rich" and why you care. If a company is making a service targeted at "rich old people", say, then the elderly widow in an expensive house isn't actually in the target audience.
In the case of me considering myself, the only way it matters is in the mindset it engenders; since my main aim is to keep myself (and secondarily my children) feeling thankful for what we do have, I consider myself rich.
That's a great example of the company who has a very specific definition that matters to them.
I think the more generalised question is also interesting, however, because usually when, for example, politicians say things such as 'the rich need to pay more taxes' they very inconsiderately don't usually define their terms. So it's helpful to get a sense of, if not what they mean, at least how people hear or interpret such statements.
I think there's a significant difference between rich (relatively well off) and rich (could live to a good standard off their capital).
But I would say that as I have a high income but also still feel worried about money / what happens if I lose my job, have no significant capital other than my primary home (still under significant mortgage) etc.
Yes - I definitely think you could subdivide rich (just as you could poor, into say 'often has to go without things and struggles week to week' and 'destitute and homeless on the street').
Personally I'd put the bar to being rich as lower than 'can live to a good standard purely off their capital' (as, it seems, would most people in the country) - but I can accept you could defend that higher standard.
A comment about housing wealth. Yes the widow owning her house outright is wealth-rich and income-poor, but one has to live somewhere and the lack of suitable accommodation to downsize into in most areas makes it difficult to extract the wealth in the house. Equally, owning a house with a mortgage leaves the householder exposed to changes in mortgage interest rates (fixed rates for more than five years are almost unknown) and that can have a big effect on disposable income. Having first got on the housing ladder in 1979. I can remember what it was like when Bank Rate suddenly zoomed up.
With businesses and land, I think the position of the threshold depends on whether it's your only source of income and/or home, or you own it in addition to having a normal income.
Someone with an average job, house, and mortgage is rich if they additionally have, let's say, £500k of savings. So if instead they own a £500k business or £500k of land in addition to their average job/house/mortgage (maybe they inherited it), that feels equivalent, and they are rich.
But if someone owns a £500k working family farm, and it's their home and their only (probably below average) income, and the home and income for several of their family members, then they're not rich. If they sold the farm, they'd have no home, no income, and a pile of cash that they'd burn through in a decade or less (depending on how many people in the family and how frugal they are).
Whereas if someone owns a £500m business, they're rich, even if it is their only source of income, because they could sell it for enough liquid assets that they could live comfortably off the interest/dividends indefinitely and still have generational wealth.
That's my instinct, anyway; I don't know how well it would stand up to rigorous formulation.
I think you are too dismissive of e.g. the concept of genteel poverty. To me the social concept of being ‘rich’ has a strong element of having assets or income which are *unexpectedly* high for your age/class/profession/whatever.
Mr Darcy is obviously rich because he can (on two occasions) pay large sums to cover up Mr Wickham’s indiscretions. Mr Bennett is obviously poor because he can never repay him. In each case we are comparing their financial resources not with some average but with the obligations of their position.
I think one can only consider Mr Bennett poor if your focus excludes 99% of England's population, which I don't think is the most useful lens to look at it with.
Partly as Sui Juris said, a key factor in whether someone is considered rich is the social norms of those around them. Having always felt rich compared to my peers (we never had to add up our shopping as we went round to check it was affordable), it was only when I started at university that I realised we were actually pretty standard lower-middle-class and there were realms above that. A single London salary covering a family of six, most of which goes on maintenance and upkeep of an enormous house and land, left me feeling (and being!) far richer in comparison to most in our rural area than two London salaries and no kids did when we were living in London, surrounded by others with similar or greater levels of disposable income.
This seems to be very much a case of "the categories were made for man, not man for the categories". It all depends what you mean by "rich" and why you care. If a company is making a service targeted at "rich old people", say, then the elderly widow in an expensive house isn't actually in the target audience.
In the case of me considering myself, the only way it matters is in the mindset it engenders; since my main aim is to keep myself (and secondarily my children) feeling thankful for what we do have, I consider myself rich.
That's a great example of the company who has a very specific definition that matters to them.
I think the more generalised question is also interesting, however, because usually when, for example, politicians say things such as 'the rich need to pay more taxes' they very inconsiderately don't usually define their terms. So it's helpful to get a sense of, if not what they mean, at least how people hear or interpret such statements.
I think there's a significant difference between rich (relatively well off) and rich (could live to a good standard off their capital).
But I would say that as I have a high income but also still feel worried about money / what happens if I lose my job, have no significant capital other than my primary home (still under significant mortgage) etc.
Yes - I definitely think you could subdivide rich (just as you could poor, into say 'often has to go without things and struggles week to week' and 'destitute and homeless on the street').
Personally I'd put the bar to being rich as lower than 'can live to a good standard purely off their capital' (as, it seems, would most people in the country) - but I can accept you could defend that higher standard.
A comment about housing wealth. Yes the widow owning her house outright is wealth-rich and income-poor, but one has to live somewhere and the lack of suitable accommodation to downsize into in most areas makes it difficult to extract the wealth in the house. Equally, owning a house with a mortgage leaves the householder exposed to changes in mortgage interest rates (fixed rates for more than five years are almost unknown) and that can have a big effect on disposable income. Having first got on the housing ladder in 1979. I can remember what it was like when Bank Rate suddenly zoomed up.
Arguably owning your own home rather than renting in retirement isn't enough to make you rich - but it does an awful lot to stop you being poor.
With businesses and land, I think the position of the threshold depends on whether it's your only source of income and/or home, or you own it in addition to having a normal income.
Someone with an average job, house, and mortgage is rich if they additionally have, let's say, £500k of savings. So if instead they own a £500k business or £500k of land in addition to their average job/house/mortgage (maybe they inherited it), that feels equivalent, and they are rich.
But if someone owns a £500k working family farm, and it's their home and their only (probably below average) income, and the home and income for several of their family members, then they're not rich. If they sold the farm, they'd have no home, no income, and a pile of cash that they'd burn through in a decade or less (depending on how many people in the family and how frugal they are).
Whereas if someone owns a £500m business, they're rich, even if it is their only source of income, because they could sell it for enough liquid assets that they could live comfortably off the interest/dividends indefinitely and still have generational wealth.
That's my instinct, anyway; I don't know how well it would stand up to rigorous formulation.
Fully agree with all of that. That's why I'd argue you should take all of it into account in its various ways.
I think you are too dismissive of e.g. the concept of genteel poverty. To me the social concept of being ‘rich’ has a strong element of having assets or income which are *unexpectedly* high for your age/class/profession/whatever.
Mr Darcy is obviously rich because he can (on two occasions) pay large sums to cover up Mr Wickham’s indiscretions. Mr Bennett is obviously poor because he can never repay him. In each case we are comparing their financial resources not with some average but with the obligations of their position.
I think one can only consider Mr Bennett poor if your focus excludes 99% of England's population, which I don't think is the most useful lens to look at it with.
Partly as Sui Juris said, a key factor in whether someone is considered rich is the social norms of those around them. Having always felt rich compared to my peers (we never had to add up our shopping as we went round to check it was affordable), it was only when I started at university that I realised we were actually pretty standard lower-middle-class and there were realms above that. A single London salary covering a family of six, most of which goes on maintenance and upkeep of an enormous house and land, left me feeling (and being!) far richer in comparison to most in our rural area than two London salaries and no kids did when we were living in London, surrounded by others with similar or greater levels of disposable income.
Fantastic piece, thank you.