Why do extremely rich people do things they themselves realize are disgusting for yet more money?

The particular extremely rich person I have in mind at the moment is golfer Phil Mickelson, who by some estimates has, um, earned around $800 million in his career, mostly from endorsements, although he has picked up a tidy $100 million in official competitive prize money.

Mickelson got into hot water because, in the course of a power struggle with the PGA, the top professional golf tour, he started playing footsie with Sheik Bone Saw and company, who are trying to start a competitor league:

February 2, 2022: Mickelson, in Saudi Arabia to compete at the Saudi International, rips the PGA Tour in an interview with Golf Digest, saying, “The Tour’s obnoxious greed has really opened the door for opportunities elsewhere.” His T-18 finish at that event remains his most recent start.

February 17, 2022: Alan Shipnuck, who is writing an unauthorized biography of Mickelson, releases details of a conversation he had with his subject in November, in which Mickelson told Shipnuck he helped LIV Golf Investments draft the new league’s operating agreement. According to the details released by Shipnuck, Mickelson also referred to the Saudis as “scary motherf—ers,” but said that despite their poor human rights record, “the Saudi money has finally given us that leverage [over the PGA Tour].”

February 22, 2022: Mickelson releases a six-paragraph statement on Twitter announcing he will be taking time away from the game. In the statement, Mickelson apologized to LIV Golf and the Saudis, but did not mention the PGA Tour by name. In the subsequent days, several of Mickelson’s sponsors either pause or end their relationships with him. Also on Feb. 22, in Palm Beach Gardens, Florida, PGA Tour commissioner Jay Monahan holds a previously scheduled mandatory players-only meeting, in which he reportedly tells players they would not be able to compete on the PGA Tour if they defected to the Saudi league.

On the one hand, these guys murder their political opponents in particularly garish ways. On the other hand . . . they give me some negotiating leverage with the PGA. So you see the moral dilemma here.

Now why does somebody like Mickelson, who is — probably, but see below — already unimaginably rich by the standards of everyone who doesn’t have ten or one hundred or four hundred times more money than he does, as remarkably enough some people do in this crazy mixed up world of ours, prostitute his considerable talents in this particularly disgusting way in the pursuit of yet more money?

Note that Mickelson here is merely a convenient representative of a social epidemic. Why did Hillary Clinton give speeches to banksters when she was already extremely rich, given that she was about to run for the Democratic nomination for president? Why are Jeff Bezos and Elon Musk and that schmuck who bought the Rams and the Nuggets and Arsenal after marrying one of Sam Walton’s daughters (F. Scott FItzgerald: “Don’t marry for money. Go where the money is and fall in love.”) so obsessed with piling their respective hoards — which dwarf Mickelson’s not to mention that possessed by the “upper middle class” Clintons — all the way up to the sky?

The Science of Economics tells us that there is a war in every human heart between good and evil the income effect and the substitution effect, and what Lincoln called the better angels of our nature do not always triumph . . . sorry where was I?

The income effect is just the declining marginal utility of income. If you have $100 in the world then acquiring another $100 is a big deal. But if you already have a million dollars, another $100 should mean basically nothing to you.

The substitution effect is kinda the opposite: if you are a world-bestriding colossus like Elon Musk, then literally every hour you are indulging in leisure rather working furiously to increase your hundreds of billions is costing you millions of dollars. I mean that’s just math.

OK as usual economics isn’t getting us anywhere here.

Why does, if you want to frame it in these terms, does the substitution effect win out over the income effect among so many already obscenely rich people? Some possible explanations:

(1) In a precarious world, you can at least in theory always lose it all. Note that Alan Shipnuck, who ratted Phil the Thrill out about the Saudi thing, reported subsequently that Mickelson lost $40 million on gambling between 2010 and 2014 alone. Yikes.

So you need something for a rainy day, or something (I find this explanation basically ridiculous. If you can go broke you can go broke, and more money doesn’t change that fact, although I suppose it delays the day of judgment).

(2) The hedonic treadmill. Once you get used to luxuries they rapidly become necessities. This psychological process is reflexive: all of us soon end up “needing” what we once only wanted, whether that’s rich Corinthian leather or a 300-foot yacht with two helipads and an IMAX.

(3) Habit trending into obsessive compulsive disorder. If you live your life as a moneymaking machine you find after awhile that you can’t ever turn it off. Indeed at some point you probably can’t even imagine that would be an option, since making money isn’t what you do, it’s who you are.

(4) For the extremely rich, money is merely a form of scorekeeping, rather than a pragmatic instrument. J. M. Keynes:

When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals. We shall be able to rid ourselves of many of the pseudo-moral principles which have
hag-ridden us for two hundred years, by which we have exalted some of the most distasteful of human qualities into the position of the highest virtues. We shall be able to afford to dare to assess the money-motive at its true value. The love of money as a possession -as distinguished from the love of money as a means to the enjoyments and realities of life -will be recognised for what it is, a somewhat disgusting morbidity, one of those semicriminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease. All kinds of social customs and economic practices, affecting the distribution of wealth and of economic rewards and penalties, which we now maintain at all costs, however distasteful and unjust they may be in themselves, because they are tremendously useful in promoting the accumulation of capital, we shall then be free, at last, to discard.

Keynes wrote that 92 years ago. He predicted that 100 years hence we would all be so rich that we would work 15 hours per week, while recognizing that the worship of money is both psychologically pathological and morally disgusting.

So we’ve still got eight years to get things together. (In all seriousness, Keynes’s predictions of how rich the developed world would be three generations hence were uncannily accurate. He just failed to account for the basic depravity of our species).

Anyway, I believe the scorekeeping explanation is probably the single biggest factor in explaining why Musk, Mickelson, et. al. are the way they are.