Government shouldn't regulate luxury

On July 26, 1784 — 226 years ago — Benjamin Franklin considered whether society was in need of a "remedy for luxury" in a letter to his trusted adviser, Benjamin Vaughn. In it, Franklin methodically argued against such a need.

The current growing clamor for the regulation of wealth makes Franklin's thoughts on the matter relevant today. Consider President Barack Obama's now infamous off-script muttering that "I do think at a certain point you've made enough money." Many have argued that this statement is emblematic of larger anti-wealth, anti-luxury tendencies in the administration's agenda.

Liberals are not the only ones, though, who engage in anti-luxury politics. All sides invoke the term "luxury" with a loaded meaning of "inappropriate," "excessive" or "wrong." Take as examples recent criticism from conservatives about Obama's vacations, Massachusetts Sen. John Kerry's yacht or criticism from varying political perspectives on the sailing trip BP's chief executive took during the Gulf of Mexico oil spill. Luxury is a demonizing word that plays well with the public.

Franklin's letter provides a partial retort to such sentiments. The wealthy infuse capital and invest, create jobs and in other ways make disproportionately positive contributions to the economy and society. Franklin reminds us of the reasons wealth, even luxuriant wealth, is good and why its regulation is dangerous.

He wrote: "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."

Franklin, of course, is known for his counsel on frugality, but only as a self-imposed virtue, not by the force of the state. The luxurist may be unwise, but that need not mean his wealth needs regulating.

Franklin posed the question of whether government should intervene to thwart this thing called luxury: "Suppose we include in the definition of luxury all unnecessary expense, and then let us consider whether laws to prevent such expense 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." He answers in the negative, concluding that, as to the hazards of unabated luxury, "Laws cannot prevent this, and perhaps it is not always an evil to the public."

In part, Franklin believed that there was little cause for concern because "upon the whole, the quantity of industry and prudence among mankind exceeds the quantity of idleness and folly."