A Paul Krugman Editorial

From time to time someone writes a column that strikes such a pure note with me that I feel obligated to share it. Paul Krugman has done just that. I thought you might like it as well.

A yacht by any other name …

By Paul Krugman

Opinion Columnist, NYTimes

Recently ProPublica, a nonprofit, independent newsroom that has partnered with The New York Times on occasion, released a remarkable report about the relationship between Justice Clarence Thomas of the Supreme Court and the conservative billionaire Harlan Crow. It turns out that over the years Thomas, who has portrayed himself as a man of modest tastes who likes to hang out in Walmart parking lots, has taken many lavish — and previously undisclosed — vacations at Crow’s expense. The ethical questions seem obvious.

Still, The Wall Street Journal lashed out at ProPublica, with an editorial headlined “The Smearing of Clarence Thomas.” The article accused ProPublica of using loaded language to create the appearance of a scandal. For example, the paper complained, ProPublica’s report called Crow’s 162-foot private boat, which has been featured in places like the website Superyacht Fan, a “superyacht.” Smear tactics!

Actually, according to a 2022 article in The New Yorker, any yacht over 98 feet long is considered a superyacht within the yachting community.

Which got me thinking about big yachts and what they tell us about the state of society.

When rich people can afford to buy and operate big yachts, they do. Indeed, yachts are a highly visible indicator of inequality, the concentration of income and wealth in the hands of the few. The Gilded Age was marked by a proliferation of ever bigger, ever more elaborately furnished yachts; when J.P. Morgan built a large steam yacht, its 1898 launch was featured in The New York Times.

Conversely, the Great Compression of income disparities that took place during the 1940s and made America a relatively middle-class society for the next four decades put an end to the first golden era of superyachts. In 1955 Fortune published a remarkable essay, “How Top Executives Live,” which stressed how modest their standard of living had become compared with prewar norms. Among other things, large yachts had “foundered in the sea of progressive taxation. … Today, 75 feet is considered a lot of yacht.”

Now superyachts are back. Indeed, according to that New Yorker article, we’re living through “the greatest boom in the yacht business that has ever existed.”

I’ve spent a lot of time over the years following debates over income and wealth inequality. Ever since inequality began rising in the 1980s, there’s been a sort of intellectual industry devoted to what one might call inequality denial, questioning the data showing a drastic rise in incomes and wealth at the top. Indeed, measuring things at the top can be technically tricky — the very rich are such a small group that they can be missed by random surveys, and their ability to engage in tax avoidance makes it hard to track them with tax data, too.

But if you had any doubts about whether we’re living in an era of extreme wealth concentration, comparable to or even surpassing the Gilded Age, the superyacht boom should quell those doubts.

The rise of superyachts also tells us some important things about the motivations and consequences of spending by the very rich.

First, why do the rich buy superyachts?

Boating — being out on the open water, experiencing nature up close — can be a source of great joy to many people. (Not me — I’m so prone to seasickness that I’ve been known to return my breakfast to the ecosystem while snorkeling.) But really big yachts, which amount to floating mansions, would seem to defeat the purpose, insulating their passengers from much of the maritime experience.

Indeed, that 1955 Fortune article suggested that top executives were just as satisfied with the downsized vessels of their day as a previous generation had been with huge yachts. “The specifications of the boat that interests the great majority of seagoing executives today are ‘forty feet, four people, $40,000.’ In this tidy vessel the businessman of 1955 is quite happily sea-borne.” (For the record, $40,000 in 1955 would be about $450,000 in 2022 dollars.)

Owning and operating a really big yacht is, however, as clear an example as you’re likely to find of Thorstein Veblen’s theory of conspicuous consumption — spending intended to demonstrate one’s wealth and status, rather than for the direct satisfaction it yields. Indeed, the New Yorker article suggests that demand for superyachts really took off once owning your own plane stopped being an effective status symbol: “Once it seemed that every plutocrat had a plane, the thrill was gone.”

Yachts, however, can always be made bigger, so there’s no obvious limit to the game. The status competition isn’t even purely implicit: Every year Boat International hands out the World Superyacht Awards, which supposedly honor “ingenuity and craftsmanship” — but obviously, size also matters.

In a way, it’s quite sad: Rarely in the course of modern history has so much wealth been concentrated in the hands of so few, yet much of that wealth is being expended on zero-sum games of one-upsmanship.

The other point, emphasized in a guest essay this week in The Times, is that superyachts are immensely destructive to the environment. To be fair, it’s not entirely obvious whether billionaires do more environmental damage with their superyachts than they would if they spent the same amount of money in other ways. But it’s possible: Shipping and aviation — presumably including superyachts and private planes — are notoriously hard to decarbonize.

And in general, while I’m not a degrowther who believes that we must shrink the economy to save the planet, curbing extravagant and destructive spending by the very rich could be part of the solution to climate change.

In any case, the rise of superyachts — regardless of whether they carry Supreme Court justices — is a highly visible indicator of the extreme economic polarization that is certainly a factor in the extreme political polarization that is tearing our democracy apart. And if you’re the kind of person who insists that calling superyachts by their name is somehow a vile smear, you’re part of the problem.