Alec MacGillis’s article on why hedge fund managers have turned fiercely against President Obama has deservedly gotten a lot of attention (especially this thoughtful commentary from Rich Yeselson, to whom the hat tip). I take MacGillis’ main point to be that hedge fund managers’ fury is based more on self-image than on self-interest. It’s not just that the hedge fundis resent being asked to pay more taxes, though they do. It’s that they think that they themselves are grand and wise people by virtue of having created vast fortunes from modest beginnings, and the President has made clear that he doesn’t.
The vanity of the super-wealthy is not a new point. But the nature of that vanity deserves more attention. I think most of us fail to realize the extent to which hedge fund managers reverse the causal reasoning that most of us use to justify capitalism. For most people, the vast wealth of entrepreneurs is justified (if at all, or conditionally, or partially, or whatever) because their wealth drives a productive economy: it creates jobs, lifts people out of poverty, erodes distasteful ascriptive hierarchies. The few billionaires at the top, however, see it to a great extent the other way around: the capitalist system is to be praised because it makes possible fortunes like theirs.