There has been a sharp turn in how we regard the wealthy. Not so long ago, people used to admire, envy or else seek to scam them through some
Ponzi scheme.

After the global financial collapse of 2008, resentment against one-percenters entered the zeitgeist, and not just among those who camped out in the Occupy Wall Street movement. No less than the very popular Pope Francis had told business leaders “to ensure that humanity is served by wealth and not ruled by it”.

Policies across the world are pushing for greater equality. Governments are cutting pro-rich privileges and increasing taxes on income, capital gains and estates. Today, the agenda is closing tax loops. Perhaps storming the Mansion gates will come next.

The wealthy do not help their own cause. A stereotype has emerged of the moneyed elite as indolent, spoilt, trust fund brat-prats. Now comes the intellectual justification for anti-rich attitudes.

Originally written in French but also available in English, French economist Thomas Piketty’s Capital in the 21st Century (2013) almost single-handedly put the spotlight on arguments about wealth distribution and income inequality. Quite
an achievement for a quite academic, almost 700-page book.

The central question he asks is whether private capital inevitably concentrates wealth in ever fewer hands, as Karl Marx believed. In Piketty’s world, wealth begets wealth. Others do not have the opportunity to rise. Society stagnates.

While some economists believe that growth, competition and technological progress can reduce inequality, Piketty’s reply is pessimistic. “There is no natural, spontaneous process to prevent destabilising, inegalitarian forces from prevailing permanently,” he writes.

As the only way to redistribute the fruits of capitalism, he prescribes not only higher income taxes but also a global taxation of accumulated wealth. That seems unlikely, for now, but in the first place, is the analysis right?

Others believe something needs to be done but less radically. Their buzzword is “ethical” or “inclusive” capitalism. UK Premier David Cameron has endorsed the former, and Bank of England Governor Mark Carney, the latter.

In Singapore, Deputy Prime Minister Tharman Shanmugaratnam has warned against unfettered free-market capitalism that encourages “individuals (to) look out for themselves” and which saps societies’ morale.

The idea of ethical capitalism is that the system’s excesses can be remedied. The term may seem an oxymoron. But consider Adam Smith, whom many deem the father of the “invisible hand” and free-for-all markets.

His thinking is considerably richer and he emphasised social aims like justice and freedom, particularly for the poor. But, unlike Marx and Picketty, Smith trusted in the free market and competition – not the state – to deliver and avoid the stagnant concentration of wealth by the wealthy.

Those who believe in a free market and open society can point to those who have earned considerable wealth, by their own merit and in a single lifetime. The poster boys may be Warren Buffett, Bill Gates and Mark Zuckerberg, but there are countless others – often immigrants who make it, even if their forebears arrived with little.

So, rather than bleeding the rich, as Picketty suggests, the goal must be to enable a healthy churn in society, with opportunities for the broadest spectrum. In such a society, the proverbial char kway teow seller’s son can also rise.

What then of the wealthy? Some might worry about the contrary: the curse of the third generation losing the family wealth. But others among the wealthy will recognise that they can and should play a role in this social process through philanthropy. Still others might even venture beyond charitable giving to the idea of impact investing.

Started in financial capitals in the West, this concept seeks to twin social cause with economic returns. The social good is not an afterthought but guides the financial investment to prefer some causes and reject others. For example, impact investors may de-emphasise the traditional oil and gas industry and prefer alternative-energy start-ups, in view of climate-change concerns.

Despite adding social criteria, impact-investment funds report good, long-term profits. Most established funds promise between 10 and 12 per cent financial return – on top of the feel-good factor. Early efforts at impact investment are beginning in Asia and, if you want to begin looking at how to get your money to do good work for you, here’re some small steps to start.

First, go nuts.

At a private bank conference where I was a speaker, Julius Baer presented cashew nuts to its wealthy clients. They came with an explanation of how a small company was growing Bali’s first large-scale, environmentally-friendly cashew-processing facility and providing employment to village women in one of the poorest parts of the island.

The initial effort is being scaled up with assistance from a leading investment fund and private investors who were convinced that the venture was not, well, nutty. The bank’s gift made a point about how wealth can be put to good causes, and gave something for Asia’s new rich with spare cash to chew on. Ethical purchases can make a point and nicer gifts than something picked from a mass-made-in-China catalogue.

Second, listen to music by Mussorgsky, the Russian romantic period composer.

Despite his first name “Modest”, he was born into a wealthy, land-owning family of noble lineage. Yet, rather than simply sitting on that inheritance, he focused on his art, especially delving into Russian folklore and history to try to capture the essence of his country.

As British journalist, writer and poet Harry Ayres judged in his “Slow Lane” column in The Financial Times, “Mussorgsky’s music is marked by a profound sympathy for a class previously treated as picturesque extras…the suffering Russian people”. The wealthy have the option to take up their duty to their society in different ways and the arts can be one form of contribution (if classical music isn’t for you, try an Eric Khoo movie).

Third, read The Wealth of Nations by Adam Smith (a softer option is New Ideas from Dead Economists: An Introduction to Modern Economic Thought by Todd Bucholz).

It is not only that Smith deserves a closer reading, rather than being blamed for all the woes of laissez-faire (a concept he recognised but didn’t embrace). An aphorism from another economist (John Keynes) is that “practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist”.

The world is moving so quickly, and arguments and theories are thrown up from so many sources. Rather than getting swept away by the swell of ideas and events, it is a true luxury to delve into both new and older thoughts and writings.

It might matter to understand their origins, see their new applications and make the ideas work for you – and for the greater good.