If ten or fifteen or twenty percent of the American people are enduring very hard financial times, eighty or ninety percent are doing quite well enough, and some are thriving. The United States continues to be stupendously rich -- rich and spoiled and unwilling to face up to its responsibilities -- but rich, indeed.

On balance, there is more good than bad in my assessment of the United States. But there is also so much more to be done toward making the United States a good society that I would never entitle a book, as Andrew Carnegie did, Triumphant Democracy. (Although, as Carnegie celebrated the victory of democracy over monarchy, I could celebrate the victory of democratic capitalism over state socialism.)

Among the many disturbing trends that we should be concerned about, there appears to be a greater gap between wealth and poverty than we've had for many decades. The middle class appears to be shrinking, with more people drifting downward in economic terms than are rising to join the wealthy. Our tax policies have not stimulated the economy or reduced the debt but they have made it possible for people who have wealth to keep it and to accumulate even more. Present tax policy encourages people to keep their money in the family rather than encouraging them to give it away for philanthropic purposes.

Even so, wealth is distributed on a much broader scale than is usually thought of. Because of the media's obsession with excess of all kinds, there is a distorted notion that "wealth" means only great wealth. On the contrary: alongside the very wealthy there are large numbers of people including those who are simply well-off. We should keep in mind all of those more ordinary people when we think about wealth in America -- the ordinary, run-of-the-mill people whose net worth is in excess, say, of a million dollars. They are of great potential importance to American philanthropy. They could reduce their net worth by a philanthropic contribution of, say, a hundred thousand dollars without significant sacrifice.

If one attends more carefully to the haphazard media coverage of philanthropy in America, the well-off are prominent and active. Some merely affluent people are always visible alongside the very wealthy, sharing in the leadership of good works in their communities.

Others are not visible, whatever their net worth. They are known neither for their wealth nor for their good works. Some may give generously but do so anonymously; others don't give at all.

There are many such people. There is a shadow army of the wealthy and the well-off that may be as large as the visible one. There are certainly great fortunes that are wholly hidden from public view, often less by intent than by the manner in which the fortunes were acquired. A modest fortune to start with becomes by shrewdness or accident a vast and diversified fortune. Unless such people call attention to their wealth, their friends and neighbors may never know. The newspaper stories are familiar: the quiet old woman in the modest house who died and left $1.8 million (or $18 million or $180 million).

Carnegie believed that it requires high intelligence to accumulate a vast fortune, and he may have been right. Affluence, however, can also be the result of hard work, a reasonable life style, and dumb luck. Carnegie believed that someone who has the intelligence to accumulate a large fortune probably has the intelligence to know best what to do with it. That isn't obvious to all of us, either. For one thing, many people have devoted all of their attention and energies all of their working lives to accumulating their wealth, whether measured at a million or at a billion. Many of the wealthiest appear late in life to be trying to catch up, to learn how to give after decades of single minded attention to their business and financial progress.

Many wealthy people make egregious errors of judgment in their giving because they act of ignorance and because they have no effective way to get good advice.

The "system" of modern American democratic capitalism is a system that generates wealth with relatively high efficiency and with relatively high social cost. As Carnegie understood so well, the American philanthropic tradition has always recognized the social cost. Carnegie believed that government had a role in helping the poorest of the poor and those he considered undeserving. Beyond what government should do, voluntary giving has always played a more prominent role in American society than in most -- and perhaps any -- other societies. There is a widespread sense of "giving something back" to the system that has made the good life possible for so many people.

The nineteenth century saw the emergence of modern American industrial society -- the great fortunes of Carnegie's generation were made in steel, oil, and railroads. The fortunes made in that era were sustained until the industrial transformation of the past several decades -- new fortunes made in electronics and made possible by electronic technologies. In both eras great fortunes were made (and lost) in finance and real estate. Some of the fortunes are the product of the capitalist virtues of hard work, saving, risk-taking, entrepreneurship, and opportunity. Many fortunes are the result of dumb luck, of the great inflation of assets through market conditions over which one has no control. It is what the economist David Ricardo called "economic rent" -- the rise in the value of an asset because of other conditions. The-most familiar version of such dumb luck is to buy a house at a reasonable price and then to be able to sell it a few years later at a price several times higher -- and to make an "unreasonable" profit in doing so. Many Americans have benefited from that very process in recent years, just as many others now find themselves burdened with houses that are worth less than their purchase price.

Some of the great fortunes that we read about were made by entrepreneurs in fields like computer software or biotechnology who sold their innovative companies for large holdings in other companies that had money but not ideas. Affluence has grown out of modest variations on such themes: the right to acquire stock through thrift funds and bonus arrangements can, over relatively short periods of time, result in substantial accumulations.

Americans are encouraged by the media to pay too much attention to high salaries of executives and to think too little about the importance of owning shares of stock. The wealthiest people often have relatively modest salaries. Assets, not income, are what count most.

Even people of modest salary may, after a decade or two or three, find themselves looking forward to a surprisingly comfortable retirement. It is the upper middle class and moderately wealthy I have in mind, because it is in that class that I find myself -- through dumb luck of exactly the kind I have described.

II

If many of us have a surplus -- we are at a point in our lives where we seem to have more than we will need to live the kind of life we want to live -- what should we do with it?

Carnegie said there were three choices: the first was to give one's wealth to one's heirs. Carnegie believed that was a bad idea for people of truly great fortunes. Passing along great wealth to one's children and grandchildren will sooner or later weaken their spirit and corrupt them.

on balance, I agree. I agree even though Carnegie's best known fellow billionaire, John D. Rockefeller, seems to have disproved him. Rockefeller left very large sums of money to his heirs through his one son, and they seem to me to have shown extraordinary strength of character in managing their wealth over several generations.

Despite the evidence of the Rockefellers and some others, most of the wealthy families I know have a very hard time instilling a sense of personal and social responsibility in their children. What is true of the very wealthy seems equally true of the affluent, and perhaps more so. If the children of the very wealthy tend to be effete, the children of the affluent tend to be selfish. Maintaining one's constructive energies is difficult when the barriers are removed. If power tends to corrupt, so does wealth.

Life is difficult, as Scott Peck said, and because life is difficult it requires disciplines to cope with it. "Life" is actually as diverse as humanity itself, and so the difficulties vary; the disciplines to cope with life remain simple. There are four such disciplines, Peck says: to defer gratification; to accept responsibility; to tell the truth; and to balance things. Those disciplines are quite as important for people of means and for their children as it is for those in poverty. The failures of discipline are more immediately evident among the poor; the failures among the affluent and the wealthy sometimes are masked or simply denied. We sometimes learn our most important lessons from failures. Despite the romantic nonsense of Hollywood, we also sometimes learn from hardship and self-denial. That is the essence of Peck's advice to defer gratification; there is wisdom to be gained in the minor pains of the self-denial and inconvenience of saving money. Denying oneself in order to accommodate the needs of others is what the acceptance of responsibility is about.

Americans are spoiled. Rich Americans are spoiled and their children more so. But the problem is not simply with wealthy Americans. The impact of unearned wealth on the habits and character of a people is evident in very different cultures. The people of Kuwait, devastated by the Gulf war, now find themselves for the first time faced with personal responsibility for the grubby and boring tasks of everyday life. They are unable as yet to hire enough non-Kuwaiti immigrants to do the work they don't want to do themselves. Their bathrooms aren't clean, their laundry isn't washed, their cars won't work. They face adversity for the first time with no preparation.

The lack of preparation to deal with adversity is the hazard of life for the children of the affluent and the wealthy -- and, it appears, of the poorest of the poor. Edward Banfield long ago defined class in terms of the willingness to defer gratification -- apart from financial condition, the poorest are those who fail that test. The rich young man wasting his resources is headed down the economic ladder, regardless of where he began, while the poor young man, struggling to make ends meet and working hard to improve his condition, is on the way up.

Economic condition is not a reflection of class character, of course. Payton's Law says that good and evil are randomly distributed throughout the population. That is why the biblical counsel to treat the rich and poor evenhandedly is good advice: [Deuteronomy]

Those who are maintained by the wealth and work of others, whatever their place in society, are likely to show the same marks of weakness and lack of preparation to cope with life when times are difficult. That is the essence of the case against welfare in any form: that over time it weakens rather than strengthens the recipient. At some point, to be fully human, we must be engaged in some serious effort in our own behalf. Self-help is essential to self-esteem; self-esteem is essential to the good life; neither is essential to being rich.

There are three forms of giving: giving out of income, giving out of capital, and giving posthumously out of one's estate.

I am convinced that there are, in fact, large numbers of people able to make gifts out of capital in amounts of $100,000, $250,000, or more without seriously affecting their welfare, security, or even even their lifestyle.