Capitalism has almost always existed in one form or another in human society. Starting with Paleolithic humans trading goods to modern-day financial systems, capitalism has always been around. Eventually it evolved into a modern financial system of today, where a well-off class funds and influences social and state apparatuses. In modern times, the increasing sophistication of capitalism originally seemed to serve humans meeting more and more material needs through the exchange of goods and services, building infrastructure, and creating jobs. But over time, the application of capitalism became more and more clever. It revealed deep roots of greed and control, allowing the accumulation of more and more wealth beyond what was simply needed, and with the growth of democracy it also became a system that supported the coordination of hidden power in politics. The wealthy classes even in a democracy were never shy to exploit workers and children without benefits or rights to strike, as we have witnessed in America and Europe until reforms were made to protect children and certain rights of the working class. By taking a historical look at how this has manifested in conjunction with the big ideas of the Enlightenment, we can begin to understand and address the tyranny of wealth that still dominates our world today.

At the heart of the Scottish Enlightenment, Adam Smith presented his political economic theories that moved Europe from its primitive feudal productivity to more sophisticated production systems with the division of labor and the power to export goods and commodities. Smith fundamentally reformed outdated capitalism and made it suitable for an industrial and liberal democratic system.

On the other side of the Atlantic Ocean, in the American Enlightenment Alexander Hamilton systemized new financial institutions such as banking, a treasury department, military funding and the idea of a stock market (certainly not without opposition, it should be noted). Hamilton ultimately laid the groundwork for the American capitalistic system.

Thus, after millennia of low-level commerce, the power of capitalism was heightened by these ideas in conjunction with the Industrial Revolution, and the rich began profiteering in commerce through colonialism and the slave-trade. At the same time, Enlightenment thinkers made their incredible leap forward in promoting democratic ideals in Europe and America. The Enlightenment thus represented a marriage between capitalism and democracy. This conjoining of capitalism served some great social purposes, such as financing intellectual and artistic ideals, reviving classic architecture and constructing extravagant Greco-Roman-style government buildings. Museums, galleries, libraries, universities, laboratories, etc., all were very positive outcomes and uses of capitalistic wealth. However, the drive toward wealth would eventually become an overpowering force for both individuals and nations.

Systematic Accumulation of Unlimited Wealth 

Smith and Hamilton were largely responsible for the systematization of accumulating wealth. The common denominator between them was the belief that everyone operates on the level of “self-interest,” not out of altruism. Capitalism provided the system that would supply this self-interest. This meant that the purpose of commerce is not to necessarily serve others, but to secure one’s own profit. This became the core of liberal democracy. The primacy of individual interests is the driving motivation for gaining wealth. Primacy of individual greed over the collective interest became a pillar in capitalistic democracy.

This focus on individualism rather than the wellbeing of a community resulted in a paradox, a contradiction between the ideal of “equality” in democracy and the inevitable social and financial inequality that resulted from unrestricted capitalism. The tyranny of greed and wealth coexisted uneasily with democracy. The machinery of democracy did not counter greed, and often times turned its face the other way. Elites could accumulate and possess unlimited wealth and live as extravagantly as they wished, regardless of the inequality and struggle around them. But in putting the individual gain and development above the society the collective interest was violated. The wealth of the wealthy classes whether private or government brought little or no benefits for the average working people in the suburban and rural areas until the social and economic reforms were introduced in the 20th century.

The free enterprise of the industrialists and bankers ultimately held more sway in political decisions despite the claims of democracy – the government of people. The individuals were allowed to own slaves or to be a part of colonizing enterprises, all with the aim of enriching themselves even at the expense of others’ freedom and rights.

Some may say that the pioneering discoveries funded by the wealthy in the past which benefitted the world, and others may argue that the ‘tyranny of wealth’ of today’s capitalism has led to great innovation (think Bill Gates, Steve Jobs) but few like to acknowledge the effects on those who are not a part of that wealth, who cannot access it, and in fact who had to be the victims and failures for that wealth. So, one can argue that wealth in the industrial nations was both a blessing and a curse at the same time; causing the private sector to advance with innovations, while letting the have-nots sadly wither away.

There have been tensions between capitalism and democracy itself (the classic example of this tension between the government and exploitative private sector was during the presidency of Theodor Roosevelt and Franklin D. Roosevelt in the first half of the 1900s).  In Europe, the inequalities eventually grew to the level where substantial reforms for the working and lower classes had to be made in the 19th and 20th centuries in order to avert protests and revolutions, and to address the rebellious anger of unsatisfied poor populations left behind in the quest for wealth and security. The rise of socialism and socialist movements became a threat to the wealth and power of the ruling classes.

Despite social security reforms and unemployment benefits, etc., the U.S. system, however, from its inception until the present day has for the most part washed its hands of having any say in the economic situation of citizens, particularly in putting any limits to wealth despite massive inequality. Democracy, according to the U.S. version, is purely a political system, not an economic one. Democracy simply means everyone gets a vote toward electing a leader. Can it be the vote of the millionaires count a few million times greater than the vote of an ordinary and poor person? The answer in theory may be ‘no!’ Is democracy utopian or is threatened by the tyranny of the wealthy? As reported by Oxfam…only “10 people possess more wealth than the bottom 40% of humanity.” In the same vein, Elon “Musk earned a mind-boggling 1.86 million times more than the average Americans: some $383m each and every day.” (See Jeff Sparrow, “The grotesque inequality embodied by Musk, Bezos and Zuckerberg is a threat to democracy,” Guardian Nov. 18, 2022).

Freedom and individualism are the cornerstones of democracy. But does it mean being ‘free’ to end up being poor on the streets, sleeping under a bridge. Central and Northern European social democracy have played greater role in the wellbeing of the average citizens in general. Capitalist democracy regrettably in this way lays all responsibility at the individual’s feet. This mode of thinking leaves us with a Darwinian approach that gives little sense of collectivity or even room for mistakes, accidents, or bad luck in life. This cold freedom takes away the warmth of belonging to and being protected by a caring and supportive society. Instead, it is a competitive freedom. The ‘dream’ that has been peddled is that one can always ‘climb out of that hole.’ But often that requires stepping on others in order to get out of the hole, rather than reaching back in to help pull others out together. This is the result of competitive freedom. Here we are not talking about randomly raising funds for a poor cancer patient, or giving some handouts to the hungry. In other words, the tyranny of wealth and greed undermines the principle of happiness for all, the principle idealized and written about by the two Epicurean thinkers Marx and Jefferson. The law has viewed impassively the disparity between the rich and poor. This hole in the Enlightenment cannot be dismissed. It has caused a ferocious competitiveness and selfishness, instead of cooperation, empathy, and conscious contentment.

It is Legal to Be Greedy

It has been legally tolerable for the rich to become richer and the poor poorer.

Some modern thinkers such as Steven Pinker have given the Enlightenment credit in that life in general has improved, compared to the past. These days, with our ownership of cell phones, TVs, cars, etc., we take pride in the many scientific and technological innovations that have pulled us out of a medieval lifestyle. Certainly, if we base our concept of a ‘better’ lifestyle on material and statistical improvements, then yes, much has gotten better.

But if those are our only criteria, then we have become oblivious to qualitative aspects of ‘better.’ There is also the aspect of ‘better’ that includes a sense of stability, trust, safety, and connection. Material goods and statistical figures become much less relevant in the face of the chronic fear of becoming poor due to bad luck, or having a medical condition but no insurance, or being at risk of losing one’s job, or the threat of war. Even though the dire conditions in rich countries were for the most part eliminated and the Enlightenment increased the ‘Wealth of Nations’ in Western nations, the dilemma of poverty due to inequality was NOT eliminated. The first Enlightenment has, nevertheless, paved the way for the next phase of the Second Enlightenment making things right.

The first Enlightenment made it possible for many wealthy individuals to live a well-cushioned lifestyle, numb to the violent poverty that surrounded them. But this is not limited to individuals. The same phenomenon occurs on a global level, between poor and rich countries: The IMF and the World Bank have become financial bodies that lend money to poor countries with interest rates that force them to slash crucial services to the society such as health services, educational, cultural and agricultural projects. The sharp irony is that in those poor countries, military budgets remain intact while other human support sectors have to be cut in order to cover for the high interest rates.  And in fact, this irony is not limited to poor countries.

The title of Paul Farmer’s pivotal book, The Pathologies of Power speaks to the deep global disparities that exist between the poor who struggle to receive treatment for diseases and malnutrition and the rich who possess more wealth than anyone could possibly utilize. The structural violence caused by political and economic injustice is evident when suffering people are deprived of basic medical treatment and die voiceless and powerless. Human rights have thus become the casualty of the tyranny of wealth.

The psychology and pathology of greed should be deeply and honestly investigated. Why is there an insatiable urge to accumulate more money than is even comprehensible? Why do we love, even revere, billionaires, and don’t care about someone who earns just a few dollars a day? Why aren’t there laws that prevent people from becoming billionaires when the poor are still waiting for help from charitable organizations? Are policies for people, or for the wealthy and the interest of their businesses?

The economic model of the Second Enlightenment will have to support democracy and true fairness, not be a purely political system that ignores the pathology of greed, allowing it to take over the power that in actuality belongs to people. The tyranny of greed which leads to inequitable behavior is childish and irresponsible. In this age and era, we need to remedy the disparities and cease the clash between greed and democracy.

A Word About Wealth Neurosis

Those people who accumulate more and more wealth impulsively and addictively can be categorized as having ‘wealth neurosis.’ It can be seen as an addiction, an uncontrollable impulse to accumulate wealth. We have to recognize that money is like a drug that some wealthy individuals are addicted to. Such people define the core of their being by their net worth: being by having.

Wealth neurosis is sometimes so insidious and disguised that is not readily detectable. In today’s materially neurotic society, the acquisition of more wealth is considered more of a virtue than a defect. The psychology of gaining wealth is even applauded, as if it were a virtuous and commendable behavior.

The system itself enables such neurosis. The wealthy are left unattended in the liberal economies, able to suck more wealth out of the system for themselves without the system being held accountable for the wellbeing of others. (An example of malignant wealth neurosis/psychosis is Bernard Madoff’s multibillion dollar Ponzi scheme, which was not detected for decades by the U.S. government until 2008 when Madoff’s scandal was discovered and eventually his own sons turned him in to the authorities). The system and the society condone getting wealthy and the question of why it was ok for someone to get that wealthy in the first place is not addressed. Someone who accumulates that much excessive wealth seems to not be concerned about the consequence of this financial neurosis on the larger scheme of social justice and the ripple effect on poverty of the population.

Wealth neurosis becomes even more disguised when some wealthy individuals make a philanthropic gesture (Madoff also gave to charities). Such gestures are uncontestably wonderful in their own right, but such philanthropy should not distract from the actual fact of an overaccumulation of wealth.

The brain is not designed to handle unlimited freedoms, and the freedom to become wealthy without limit can derange the limbic system. The satiating impulse in the brain seems to malfunction, normalizing something that is not normal. (There are such levels of inequity in the world that accumulating more and more wealth cannot be considered ‘normal’ in the face of the great poverty of billions of people.)

Trying to persuade individuals not to get rich for the good of humanity would be a challenging and uncertain undertaking. To manage such wealth neurosis requires either self-reflection, a strong personal philosophical intervention, or control through taxation by the state.