Over 400,000 people visited Farnam Street last month to learn how to make better decisions, create new ideas, and avoid stupid errors. With more than 100,000 subscribers to our popular weekly digest, we've become an online intellectual hub. To learn more about we what do, start here.

Ben Franklin and the Virtues and Ills of Pursuing Luxury

In a letter written in 1784 to his friend Benjamin Vaughan, Ben Franklin has a very interesting cogitation on the aggregate effect of the pursuit of luxuries beyond our needs.

Franklin displays a mastery of rational, balanced thought, and a deep understanding of human nature. Is the pursuit of luxury a net benefit or detriment to a country? Why do we pursue it?

The salient passages are below. (You can find his full writings here.) The last paragraph, in particular, is a gem, but taking 10 minutes to read it through is worth the time.

I have not, indeed yet thought of a Remedy for Luxury  I am not sure, that in a great State it is capable of a Remedy. Nor that the Evil is in itself always so great as it is represented.  Suppose we include in the Definition of Luxury all unnecessary Expence, and then let us consider whether Laws to prevent such Expence are possible to be executed in a great Country, and whether, if they could be executed, our People generally would be happier, or even richer. Is not the Hope of one day being able to purchase and enjoy Luxuries a great Spur to Labour and Industry? May not Luxury, therefore, produce more than it consumes, if without such a Spur People would be, as they are naturally enough inclined to be, lazy and indolent?

[…]

In our Commercial Towns upon the Seacoast, Fortunes will occasionally be made. Some of those who grow rich will be prudent, live within Bounds, and preserve what they have gained for their Posterity ; others, fond of showing their  Wealth, will be extravagant and ruin themselves. Laws  cannot prevent this; and perhaps it is not always an evil to the Publick. A Shilling spent idly by a Fool, may be picked up by a Wiser Person, who knows better what to do with it.  It is therefore not lost. A vain, silly Fellow builds a fine House, furnishes it richly, lives in it expensively, and in few years ruins himself; but the Masons, Carpenters, Smiths, and other honest Tradesmen have been by his Employ assisted in maintaining and raising their Families ; the Farmer has been paid for his labour, and encouraged, and the Estate is now in better Hands. In some Cases, indeed, certain Modes of Luxury may be a publick Evil, in the same Manner as it is a Private one. If there be a Nation, for Instance, that exports its Beef and Linnen, to pay for its Importation of Claret and Porter, while a great Part of its People live upon Potatoes, and wear no Shirts, wherein does it differ from the Sot, who lets his Family starve, and sells his Clothes to buy Drink? Our American Commerce is, I confess, a little in this way. We sell our Victuals to your Islands for Rum and Sugar; the substantial Necessaries of Life for Superfluities. But we have Plenty, and live well nevertheless, tho’ by being soberer, we might be richer.

[…]

It has been computed by some Political Arithmetician, that, if every Man and Woman would work for four Hours each Day on something useful, that Labour would produce sufficient to procure all the Necessaries and Comforts of Life, Want and Misery would be banished out of the World, and the rest of the 24 hours might be Leisure and Pleasure.

What occasions then so much Want and Misery? It is the Employment of Men and Women in Works, that produce neither the Necessaries nor Conveniences of Life, who, [along] with those who do nothing, consume the Necessaries raised by the Laborious.

To explain this.

The first Elements of Wealth are obtained by Labour, from the Earth and Waters. I have Land, and raise Corn. With this, if I feed a Family that does nothing, my Corn will be consum’d, and at the end of the Year I shall be no richer than I was at the beginning. But if, while I feed them, I employ them, some in Spinning, others in hewing Timber and sawing Boards, others in making Bricks, &c. for Building, the Value of my Corn will be arrested and remain with me, and at the end of the Year we may all be better clothed and better lodged. And if, instead of employing a Man I feed in making Bricks, I employ him in fiddling for me, the Corn he eats is gone, and no Part of his Manufacture remains to augment the Wealth and Convenience of the family; I shall therefore be the poorer for this fiddling Man, unless the rest of my Family work more, or eat less, to make up the Deficiency he occasions.

Look round the World and see the Millions employ’d in doing nothing, or in something that amounts to nothing, when the Necessaries and Conveniences of Life are in question. What is the Bulk of Commerce, for which we fight and destroy each other, but the Toil of Millions for Superfluities, to the great Hazard and Loss of many Lives by the constant Dangers of the Sea? How much labour is spent in Building and fitting great Ships, to go to China and Arabia for Tea and Coffee, to the West Indies for Sugar, to America for Tobacco! These things cannot be called the Necessaries of Life, for our Ancestors lived very comfortably without them.

A Question may be asked; Could all these People, now employed in raising, making, or carrying Superfluities, be subsisted by raising Necessaries? I think they might. The World is large, and a great Part of it still uncultivated. Many hundred Millions of Acres in Asia, Africa, and America are still Forest, and a great Deal even in Europe. On 100 Acres of this Forest a Man might become a substantial Farmer, and 100,000 Men, employed in clearing each his 100 Acres, would hardly brighten a Spot big enough to be Visible from the Moon, unless with HerschelTs Telescope ; so vast are the Regions still in Wood unimproved.

‘Tis however, some Comfort to reflect, that, upon the whole, the Quantity of Industry and Prudence among Mankind exceeds the Quantity of Idleness and Folly. Hence the Increase of good Buildings, Farms cultivated, and populous Cities filled with Wealth, all over Europe, which a few Ages since were only to be found on the Coasts of the Mediterranean; and this, notwithstanding the mad Wars continually raging, by which are often destroyed in one year the Works of many Years’ Peace. So that we may hope the Luxury of a few Merchants on the Seacoast will not be the Ruin of America.

One reflection more, and I will end this long, rambling Letter. Almost all the Parts of our Bodies require some Expence. The Feet demand Shoes; the Legs, Stockings; the rest of the Body, Clothing; and the Belly, a good deal of Victuals. Our Eyes, tho’ exceedingly useful, ask, when reasonable, only the cheap Assistance of Spectacles, which could not much impair our Finances. But the Eyes of other People are the Eyes that ruin us. If all but myself were blind, I should want neither fine Clothes, fine Houses, nor fine Furniture.

Adieu, my dear Friend, I am

Yours ever
B. FRANKLIN.

***

Still Interested? Check out Franklin’s Rule for Decision Making, and check out the excellent book The Way to Wealth and Other Writings on Finance for an edited and condensed look at Franklin’s various essays on economics, business, and finance.