Can everyone be rich?
Economics is the study of unlimited wants with a limited set of resources. Are our limited resources enough to supply everyone with a wealthy lifestyle?
The total income of the world is 70 trillion dollars and if we were to spread that evenly across the roughly 7 billion people, then each person would get about $10,000 a year. That might be enough to live a sound life, but it isn't enough to live wealthy. This doesn't mean it never will be though.
From here there are two options. Make the current goods and comforts cheaper and replace them with a new expensive commodity: maybe medical advantage or recreation. Obviously the term rich will scale, but still we would reach a world where everyone is rich by todays standards. This is one option, but we could also consider increasing the global income or decreasing the population.
First, can we lower the price of current goods? Well, phones used to be exclusively for the rich and now 40% of Haiti, a third world country, has phones. This is true for a myriad of technologies because as we advance, the new tech gets cheaper which means the old tech gets even cheaper. So everyone will be able to achieve a modern level of technology given time, but how about property, water, or food. The population density of livable area is one person per 38 miles squared. so, as for property, it is likely you could house every person comfortably and still have plenty of space in between for nature, cities, and more. Furthermore, less and less land is going to be used for stores due to online commerce. As for food, we have plenty of room to improve efficiency, change our diets, and reduce the footprint of agriculture. 55% of our calories go to feeding animals that we slaughter and get less calories from their meat. The cost of universal wealth would involve making certain modern diets exclusive to only the future 1%. There is enough water at least for now, the problem is we cannot purify it fast enough. If we build purifiers and water treatment plants globally we could theoretically provide clean water for everyone. To summarize, yet we could lower the price of current goods and maybe everyone could live a more affluent lifestyle.
Can we increase the global income? Actually yes, it is theoretically possible because the world economy is not based on a fixed commodity like gold. It is NOT a zero sum game.
Alternatively maybe Elon Musk can get us to mars and then we will have unlimited resources and everyone can be rich.
https://www.bbc.com/news/magazine-17512040
https://www.nationalgeographic.com/foodfeatures/feeding-9-billion/
http://www.globalincome.org/English/FAQ.html#Question3
https://www.quora.com/Is-it-possible-for-everyone-to-make-a-profit-in-an-economy
I found this interesting article interesting after learning about resources in APES. The demand for these resources is far greater than the supply, which is, and will continue to cause great harm. Like you mentioned, we could potentially be living in a world with "everyone living a more affluent lifestyle", but issues arise with the consumption of these goods. People can be greedy and want more for themselves. I can see this being an issue in the future, when goods are really limited. It's similar to the "rich get richer" issue that we see with taxes. By working with other countries to increase the global income at all levels, we could all be living in a prosperous and efficient world!
ReplyDeleteIn Statistics, we learned the normal distribution which looks like a symmetric, bell-shaped curve, and I believe that everyone can be "rich" but there is always a some-what normal distribution in the total money income that leads to dividing people into different economic and social class, so there is always a group of people who is richer than you. "Everyone being rich" comes down to how do you define being "rich." Based on the Maslow's Hierarchy of Needs, does being rich mean everyone in the world could afford physiological needs (e.g. having proper healthcare and necessity for basic living)? This model rather looks like an example of living that people don't worry about their health, meanwhile some people who have a higher income could afford other needs, including psychological needs and self-fulfillment needs. In addition, being rich also comes down to how do you define the scale: everyone in the world, including third countries? I think everyone being rich, this idea, could be possibly achieved within the United States in my lifetime if the definition of being rich is fulfilling the physiological needs. However, in some Northern European countries, for example like Luxembourg and Switzerland, where they have the largest GDP per capita, there are people still living below the standard (like the outliers in statistics). Above all, "can everyone be rich" is a complicated question and it does not have a way to truly achieve it.
ReplyDeleteI thought this article was super interesting because I've never thought of this before. I personally don't think it's possible for everyone to be rich. If everyone were rich, then there would be less jobs and therefore less rich people, which is definitionally impossible and objectively can't happen. It would just end up in a viscous cycle and no one would be rich. The rich profit off of the poor and I don't think it's possible for there to be any other way. You also mentioned an interesting point about lowering the prices of current goods. Is this even possible? I've never heard of deflation being possible so I'd like to know this answer from a microeconomics standpoint.
ReplyDeleteThis comments is interesting, but is impossible due to inflation in the economy. Even if everyone had more money, the amount of good would be finite, so the price of the goods would go up if everyone had more money. Therefore, the inflation would balance out the increase in money everyone has. In a capitalist economy, there always has to be the rich and the poor, and the rich get richer while the poor struggle. Therefore, it's impossible for everyone to be rich in a capitalist economy. If you wanted everyone to be more equal, you would try to have a communist economy, but that would have problems with efficiency.
ReplyDeleteThis is a very interesting article, but not everyone can be rich. Not only would inflation be a problem if everyone suddenly got $1,000,000, but if everyone had $1,000,000 then it would be the same as everyone having $1. Everyone has access to the same amount of resources, and again if there are unlimited resources then no one person has more than another so they aren't "rich". Unfortunately in order for their to be wealth, there must be poverty.
ReplyDelete