Friday, August 25, 2017

Wealth and Envy

Money cannot buy happiness, the old saw goes, but neither does grinding poverty or even being poor. For most of human existence most people, the vast majority, have been poor. Of those who were not 'poor' there were far more in grinding poverty than living high on the hog. There was little in the way of 'abundance' about. 

The past couple of hundred years has seen a transformation of this seemingly natural order of things. Where before there was not much to go around and the very powerful kept most of it to themselves, today there is plenty and it is held by many. This is undeniable.  Robin Hood apparantly did some work on the side redistributing what he could lay his hands upon. An exception to the rule.

Mind you, again, the seriously rich robbed mainly amongst themselves, where the wealth was. There was just one Robin Hood but many robbing hoods in high places. When King Richard was captured in Europe on his way home from the Crusades, his captor demanded as ransom the equivalent of the entire GDP of Britain.

But the attitudes of the hoi poloi remain very much the same. The poor envy the rich, and where they may have had some 'cause' to be envious through much of history, today that vice is more difficult to sustain.  But effort is made ! 

Today some carp and complain about the 1%, failing to understand or even acknowledge that to be in the 1% of humanity today is to have the average wage of an Australian sheet metal worker or a plumber.  Even our Oz leader in waiting reckons that earning just a bit less each year than Au$180,000 makes you 'Rich' and you should be excoriated.

Not that he counts himself amongst those he rubbishes: him with his millions. He does not like it shouted about. 

Talking heads continually carp about the high pay of CEOs who might make several millions a year  running businesses employing several thousand people - and paying them - but few such 'commentators' point the finger at people like 'talk-show' hosts who take home US$50 million and employ only personal housemaids, or 'pop divas' who manage to tuck vast millions in their skimpy stage attire. 

The real poor are not found in the Western world. Most are in the third world. But they are getting fewer by the day.

Marian Tupy came by to give some good oil in exchange for good grace.
The Most Important Graph in the World

There has been a massive increase in wealth throughout the world in the last two centuries.
Jonathan Haidt, the well-known psychologist from New York University, started as a "typical" liberal intellectual, but came to appreciate the awesome ability of free markets to improve the lives of the poor. 
Earlier this year, he penned an essay in which he pointed to what he called "the most important graph in the world." 
The graph reflected Angus Maddison's data showing a massive increase in wealth throughout the world over the last two centuries and which is reproduced, courtesy of Human Progress, below.
The "great enrichment" (Deirdre McCloskey's phrase) elicits different responses in different parts of the world, Haidt noted. "When I show this graph in Asia," Haidt writes, "the audiences love it, and seem to take it as an aspirational road map… 
But when I show this graph in Europe and North America, I often receive more ambivalent reactions. 'We can't just keep growing forever!' some say. 'We'll destroy the planet!' say others. 

These objections seem to come entirely from the political left, which has a history, stretching back centuries, of ambivalence or outright hostility to capitalism."

Haidt's experience mirrors my own. When giving talks about the benefits of free markets, audiences in Europe and America invariably note the supposedly finite nature of growth and express worry about the environmental state of the planet. 

In Haidt's view, capitalist prosperity changes human conscience. 
In pre-industrial societies, people care about survival. "As societies get wealthier, life generally gets safer, not just due to reductions in disease, starvation, and vulnerability to natural disasters, but also due to reductions in political brutalization. 
People get rights."

This more prosperous generation, then, starts caring about such things as women's rights, animal rights, gay rights, human rights, and environmental degradation. 
"They start expecting more out of life than their parents did." 
All that is fine, of course, so long as the pampered youth in the West and newly empowered youth in the Far East remember that roughly 800 million people in the world, many of them in Africa, still live in absolute poverty and experience the kinds of existential challenges that only free markets can solve. 
Denying dirt-poor people access to cheap fossil fuel energy, for example, can mean a death sentence to a newborn child on life support in an electric-powered incubator in rural Africa.

Let me conclude with two final thoughts. First, there is no obvious reason why growth should not continue indefinitely—although future growth will likely be more dependent on technological change than in the past. 
In the West, for example, we cannot replicate the growth boost that resulted from the entry of large number of women (50 percent of the population) into the labor force. 
Second, let's not fall into the trap of thinking that, because the initial stage of industrialization was bad for the environment, pre-industrial society saw man and nature coexist in harmony. 
Part of the reason why the Industrial Revolution started in England was that the country had to switch from almost depleted wood to coal as a source of energy. 
Industrialization, and subsequent enrichment, saved European forests, and it can do so in Africa as well.
This old Tavern Keeper used to be quite well off. I am now poor. Poor by western standards that is. I can attest from just my own personal experience, that I am quite happy, thank you. 

I am pretty sure I could be just as happy rich.

A rich man can help more people than a poor man.

If he so chooses.

He /she can do more damage too.

Drink up now.



  1. Poor is still poor within a rich country. It's only when artificially compared to 3rd world countries that it's rich. But that doesn't help when you still face heat or eat in winter. That sort of wealth doesn't seem so wealthy.

    1. The comparison within a country is artificial too. You are poor: I am poor. Yes we struggle to pay the bills, but we have many shared wealths which we have bought and paid-for over many years.


Ne meias in stragulo aut pueros circummittam.

Our Bouncer is a gentleman of muscle and guile. His patience has limits. He will check you at the door.

The Tavern gets rowdy visitors from time to time. Some are brain dead and some soul dead. They attack customers and the bar staff and piss on the carpets. Those people will not be allowed in anymore. So... Be Nice..