Wealth, Income, Consumption & Utility – Part 2

TL;DR. The world is getting increasing unequal in wealth, income and consumption. That’s great. I prefer to live in an increasingly unequal world than in a world of equality because an unequal world is a better world than a world characterized by equality.

But let me stress that a world with more inequality is preferable to a world with less inequality is an empirical fact, not a necessary logical fact. Here’s why.

Our present world is unimaginably wealthier than the world was any time of the past, as I claimed in the first part of this essay. I believe the future will be even more unimaginably wealthier than the present. The causal factors that led to the present explosion of wealth will continue to not only operate in the future but will intensify.

There’s an inevitable consequence of this monotonic increase in wealth: an increase in inequality.

People have a marked preference for equality. I suppose it is because we have an innate preference for fairness. We want the goodies to be distributed equally or else it is not fair. This sounds reasonable.

But the world is not “reasonable.” Wealth and income are not “distributed” by anyone — unless you are unlucky enough to be resident of a socialist paradise often labeled “Democratic Socialist Republic” or some such. But let’s not waste time on pathological states.

Inequality of wealth is an unavoidable consequence of the creation of wealth. Any attempt at equalizing outcome will invariably lead to a disastrous decline in the creation of wealth.

Inequality is baked into the nature of the world. As the universe evolves, things become unequal. Along every dimension one cares to examine the world, one confronts growing inequality.

The universe began in a state of perfect equality about 13.7 billion years ago. At one point, all it had were protons.  Things don’t get more equal than that.

Then all the astronomical features we observe emerged — stars, black holes, galaxies, super clusters — and the initial homogeneity and uniformity was replaced by heterogeneity.

The earth was formed a few billion years after the big bang. It began as a hot, rocky ball. Things cooled down in due course. Features appeared. Life began as single-celled creatures a few billion years after that. Procaryotes have little inequality. Eucaryotes, however, are full of inequality. You’d immediately notice a differences between a blue whale and a humming bird.

The big story is one of increasing inequality.

When people were hunter gatherers, there was little inequality. Indeed humans went through a bottleneck when the total number of humans was reduced to a couple of thousand people.They were of course barely human. But they were equal. Now there are eight billion around — and they are unequal.

At the start of homo sapience around 300, 000 years ago, no one was 100 times above the average in material possessions or strength or whatever. With the gradual growth of the human population and the advent of civilization, inequality began to appear. Some people had more wealth than others.

The industrial revolution in the mid-1700s brought greater inequality, within and among different parts of the world. The gap between the very rich and the very poor began to widen.

But here’s the good news. The poor began to be less poor even as the rich began to get incredibly richer compared to them. The ceiling was do doubt rising rapidly and the gap between the floor and the ceiling was growing but the floor was rising rapidly too.

A few hundred years ago, the kings and emperors had huge collections of precious stuff and the peasants had practically next to nothing to their name. The rich had a lot of stuff to eat and lots of servants and huge homes; and the poor had barely enough to eat. But even the richest of a few hundred years ago had nothing of what the average inhabitant of the developed nations have today.

Today the super rich have hundreds of billions of dollars to their name. That’s an insanely large amount of wealth. But even the poor of today have what the richest of the past could not have even imagined having.

I would any day choose to live the life of an average resident of a developed country today than the life of an emperor just a few centuries ago. Sure, I could have been born in a royal family but with 99.999% probability I would have been born to a desperately poor family with hardly any prospects of living a life I would consider decent today.

The leftists tirelessly go on about how unfair it is that there are billionaires in our midst. They decry the wealth of the billionaires. I actually celebrate that fact: I want to live in a world which has billionaires. I prefer to be “poor” in a world of thousands of billionaires rather than be rich in a world of zero billionaires.

Why? Because a world in which there are thousands of billionaires is a world in which the poor are not living in poverty. It’s a world where there is no material poverty and deprivation. It’s a world that I would choose to be born in behind a Rawlsian veil of ignorance.

By that I mean, if I were given a choice between being born in a world with massive inequality but no poverty, and a world with perfect equality but widespread poverty, I’d choose the former: a world of inequality.

Another way of stating that same thing is to say that I would prefer to live my life any time in the future as opposed to living my life in the present or any time in the past.

The world in the past had less inequality compared to today; the world of the future will have more inequality compared to today. I wish I could live in a world of greater inequality than today.

I will continue to explore this topic in the next bit. Feel free to leave me a comment or a like.

Be well, do good work and may your god go with you.