Click to embiggen. There’s a famous landmark in the picture. What’s it?
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. Continue reading
This is a continuation of the brief piece about what’s wealth and where does it come from. Wealth, defined broadly, is important to us because it’s useful for our material well-being. Material well-being is not an end in itself but it is instrumental in providing the irreducible basis for our happiness and therefore it is a means to all other higher human aspirations and goals. Without a sufficiently wealthy foundation, it is hard if not impossible to live in peace and harmony with oneself and with others.
10 million years ago, there was no wealth on earth
Wealth comes from human action. It does not exist in nature although the ingredients from which wealth is derived through human action does exist in nature. A simple example illustrative example is hydrocarbons in the ground (coal, crude oil, natural gas, etc.) They simply exist in nature. Whether it is useful or not depends on the user. Primitive life forms on earth had no use for it. Dinosaurs did not dig up coal to use as an energy source. Even primitive hominids had no use for coal. Though coal existed for millions of years, it did not become wealth until modern humans figured out only a few thousand years ago that it was great fuel for fires.