Wealthy people are very fond of hanging on to their wealth, as a general rule. There is a belief that they deserve it, that they won that money fairly, even in cases where people inherit money; after all, their ancestors worked for it, so they shouldn’t throw it all away because that would be a disgrace to the family legacy. And they must have won it fairly because they are wealthy in the land of opportunity, where no social inequality exists, where some groups are not advantaged over others. A nice cushion of mythology protects wealth, to make wealthy people feel more comfortable about the fact that they have money, and to encourage them to consolidate it. To acquire more money. To increase monetary inequality, because, well, they deserve it. If those poor people have a problem with it, they ought to get wealthy, and then they’d solve that little problem, now wouldn’t they?
One of the things about acquiring and maintaining wealth is that it requires knowledge and a very high degree of financial literacy. People are not born with this information. They acquire it through lived experience. If you grow up in a wealthy family, you absorb it throughout your childhood, and as you grow up, you are encouraged to seek out education, to go to college, to develop skills. You also have an army of advisers to rely upon; personal wealth management isn’t conducted personally by the wealthy, but by the people they hire to handle their money. People with extensive experience, training, and knowledge to draw upon.
Knowledge is power and wealthy people have access to considerable financial power in the form of their personal knowledge and the knowledge for hire they can readily access because of their wealth. Power also tends to consolidate power, which means there is an active incentive to accumulate more, to grow wealth, to increase power and control. To limit access to information that might be beneficial for people outside the power structure. To use that power to lobby for more tax loopholes and other benefits to limit the outflow of wealth. Information about these loopholes is available to the people who made them, and they are the ones who use them, to increase their power.
For most average citizens, financial literacy is limited. People may have a general idea on some vague topics, but they do not understand the financial system. This is highlighted in the way people engage in financial planning, in the way that the mortgage crisis was built, by preying upon people who did not fully understand what they were getting into and lacked the tools to do their research. These victims of a system where knowledge is tightly controlled were framed as reckless or greedy or just plain stupid, when in fact they were caught in a trap devised by people who had power and knew how to use it. The recklessness and greed came from the banks encouraging loan officers to stretch the truth when discussing loans, from people who originated no documentation loans to people who clearly didn’t understand them.
And financial literacy education for people in the lower classes is often framed as a ‘you should save money and work really hard,’ with some attention paid to topics like how compound interest works, and financial planning for retirement and big purchases like homes. Fundamentally, though, this information is often geared at limiting knowledge. Those tax loopholes used by the wealthy? They aren’t discussed in financial planning classes at the community center, and in fact many of them aren’t even available to the people attending those classes because they don’t make enough money, they don’t have enough wealth to hide the money they do have, so those benefits are useless.
Discussions about filing taxes may in fact cover some tricks people can use to reduce tax liability, but they fall far short of the tactics used by wealthy taxpayers and corporations to avoid the lion’s share of their taxes. Knowledge, the ability to control finances effectively and build wealth, is controlled and limited. People are blamed for their lack of knowledge in a system that deliberately hides this information from them. And they may not understand the extent of the inequalities around them because, often, they are around people with the same level of knowledge and power. When everyone struggles in the same way you do, it may start to feel normal, and you may start to feel like there is no way out, no information that you could use to empower yourself. After all, if there was, someone would have found it, taken advantage, and showed the rest of you.
Much as people are set against each other in fights for crumbs, knowledge is hidden and shuffled around to keep people in the dark while they are simultaneously criticised for their lack of knowledge. People make assumptions about the availability of tax benefits, financial assistance, and related things on the basis of what the people around them do, and know, on the basis of their own experiences. Someone who grows up in a poor household receives a very different education than someone who grows up in a wealthy one, and this sets up for entrenched intergenerational inequality. You do what you know, and you cannot know more if you don’t even have access to the tools you need to understand that there is more to know, let alone the tools necessary to get the information you might benefit from. And we wonder why wealth and power become increasingly concentrated over time.