Rising Equality

I can justifiably claim that equality is rising in the world. Meaning, the world used to be less equal than it is today, and that in the future it will become more equal than today. The reason that claim appears to contradict reality is that I have not specified the dimension for the comparison implicit in any measure of equality. When it comes to comparisons of material wellbeing, there are three distinct dimensions — consumption, income, and wealth.

My claim is that consumption equality is increasing, not wealth or income.

Here’s a trivial case that illustrates what I mean. Warren Buffet’s income and wealth is six orders of magnitude greater than mine. Meaning his wealth is measured in units of “000,000,000” and mine is measured in units of “000.” Billions as opposed to thousands. Similarly his income per year is measured in billions and mine in thousands. Certainly, compared to Buffet in terms of wealth and income, I am dirt poor. But I am not dirt poor compared to Buffet in consumption.

Let’s talk consumption then. Buffet lives in a nice but a modest house. Me too. His house has a HVAC unit (heating, ventilation, air conditioning) just like mine has. Running hot and cold water? Yes. Fridges, stoves, kitchen gadgets and gizmos? Yes. Big fat TVs and good audio system? Yes. Computers and internet service? Yes. Subscriptions to various channels of entertainment? Yes. Nice furniture in the living room and bedroom? Yes. He eats food bought at some supermarket? Me too. His drinks Coke and so do I. His burgers are not gold plated — they are from the same bunch of fast food places that every American eats. He puts on his pants one leg at a time, just like you and I. What we consume is mostly similar.

There are some stark differences between our consumption: he travels by private jet and I can only afford commercial air travel. Perhaps he holidays in private yachts. But aside from such things, my consumption is not six orders of magnitude lower than Buffet’s consumption.

This was not true any time in the past. The consumption of the rich and the superrich was vastly different from that of the rest. John D Rockefeller’s consumption could not have been duplicated by the average American.

In the future, there will be even vaster differences in wealth and income across the world. The greatest thing would be that the consumption “floor” will keep on rising. The average person of the year 2100 will have greater consumption than the richest of today. That’s what I am optimistic about.

Fun fact: In 1957, Fortune magazine listed Jean Paul Getty as the wealthiest American. When asked whether he was really worth a billion dollars, he said, “You know, if you can count your money, you don’t have a billion dollars.”

Click on the image above. See if you can answer the question. 

4 thoughts on “Rising Equality

  1. Engr. Ravi Saturday July 10, 2021 / 8:04 am

    I agree that it is very likely that there will be rising equality, but for exactly the opposite reason. Instead of continuing economic growth and “the consumption floor keeping on rising”, I think it is more likely that growth will end. Zero and negative growth will mean no more free interest/dividend/capital-gains income for the ultra rich, and lot lower and more equal consumption for everyone.

    I’d like to know your thoughts on the predictions of such writers as Vaclav Smil, Richard Heinberg and economists like Hermann Daly, David Meadows etc. all of whom predict negative and zero growth starting this decade.

    https://en.wikipedia.org/wiki/The_Limits_to_Growth

    Vaclav Smil (https://en.wikipedia.org/wiki/Vaclav_Smil#Books)
    2019 : Growth: From Microorganisms to Megacities.
    2017 : Energy and Civilization: A History.

    Richard Heinberg (https://en.wikipedia.org/wiki/Richard_Heinberg#Books)
    The End of Growth: Adapting to Our New Economic Reality, (2011)

    https://en.wikipedia.org/wiki/Herman_Daly

    P.S. I see the landmark. Great shot! The image title and the yacht are a give away.

    Liked by 1 person

  2. baransam1 Saturday July 10, 2021 / 12:46 pm

    The creation of Frédéric Auguste Bartholdi, Gustave Eiffel and many others.

    Liked by 1 person

    • Atanu Dey Tuesday July 13, 2021 / 11:08 am

      Yes, indeed. It’s the statue “Liberty Enlightening the World” aka the Statue of Liberty. The artist was Bartholdi and the internal structure was done by Eiffel, who in a few years, went on to design the eponymous tower in Paris.

      Liked by 1 person

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