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Discussion #18 - The Wealth Gap

Most people have no idea just how massive the income/wealth gap is getting. Many of the ultra-wealthy are making an unbelievable amount of money on the backs of the middle class, near-poor & the poor. (Just try googling the stats, it's truly shocking)! This trend shows no signs of abating, & there are a few reasons why.

1. Massive disconnect in psychology between earning & spending.

When we are earning, we want good decent-paying local jobs. When we're spending, we want to get the best deals. The thought process is; everyone else is shopping at Walmart, why should I be the only one having to spend more for everything. We've all heard the expression "if you're hungry, eat your import". Well, that pretty much sums it up (I drive a Kia, my wife drives a Dodge). Very few want to bite the bullet & support local employment (which costs dramatically more).

2. Capitalism has become a bit of a religion. Very few dare to question it's functionality, for fear of being labelled a communist.

The reality is that no country on Earth is pure anything, (capitalist, socialist, or communist). Every country has it's own mix (commonly of capitalism & socialism). Also, no country on Earth has it all figured out, regardless of political party(s) currently in power! I personally (if I had to choose just one) would choose capitalism, as it rewards hard work, honest effort & ingenuity the most. The problem is that for the last 30 years or so, the game has become rigged in some of the most influential countries in the world. I hate to pick on the United States, but they do seem to be leading the way recently in this department. They of course are not perfect, & have been making some pretty big mistakes lately. From where I sit (in Canada), these would seem to be the debt crisis & far too much lobbying (the 2 are somewhat related).

The debt crisis was caused by far too much credit being available to people, in an attempt to compensate for a shrinking middle class. There are currently over 12,000 lobbyists working in Washington, with an annual budget of $3.3 billion (there were a few hundred in the 70's). One (of many) things I do respect about the U.S. system, is it's transparency about this paid influence on government. Many other countries have a similar system of lobbying, with similar dramatic increases in numbers/budgets since the 70's. The result of all this lobbying, is that the deck is stacked in favour of the wealthy elite. With this influence of government legislation (especially in the area of taxation), power over money will continue to increase up the ranks of the ultra-rich. The game is to win at any cost, & a level playing field is not a priority (or option).

Pure capitalism would work beautifully if a level playing field could somehow be enforced. Instead, what's happening is the gap is steadily getting wider, & young people (especially) are finding it more & more difficult to get successfully launched in life. Education, which is the best way out of poverty, is rising in cost far faster than wages. Children of the wealthy are (statistically) far more likely to succeed in this fashion. Starting a business would be a similar story. In fact, children of the rich are approx. 10 times more likely to follow in their parent's footsteps economically. The solution? In my humble opinion, there is only 1 solution to this problem; level the field, stop this vicious cycle before it gets any worse.

The biggest ingredient to the solution is to have the masses wake up & become fully aware of what is really going on. The remainder is to inject a bit of socialism into the mix, & use taxation to try & level things out somewhat. This would have to be done on a global scale however, as the 1% will likely just relocate to another country otherwise, nullifying the effect. This wealth gap choke-hold is really a global problem, & should be treated as such anyway. If the world can co-operate enough to allow the exportation (from the West) of this many good-paying jobs, then it can surely pull off something like a global taxation plan. This plan could emphasize incentives for companies to share the wealth more with employees & management, not just shareholders & owners (which was a reality in the past).

I'm personally very optimistic about this issue (& many others), as we are living in the information age. It's going to be very difficult for any form of injustice or corruption to hide for very long in this culture. Knowledge is evolving at an incredible pace. We just need to get organized, & then learn to get along with each other. (Keep in mind that a call center worker in India earns approx. $1 USD/hr. A factory worker in China earns approx. $2 USD/hr.).

Global economics is of course an incredibly complex subject, but there are a few basic trends and facts that should be brought to the surface. The first is that on top of many jobs being outsourced from the richer countries, there will always be a few insourced as well, but this is mainly for companies to have access to much needed raw materials. Also, products which are large, heavy, & expensive to ship will likely remain locally produced or assembled with domestic labour (or robotics) as well.

Let's face it, unless a company is attempting to win some brownie points with the general public in their marketing, whichever plan improves the bottom line is the one they will choose every time. In many cases, utilizing local labour is not even an option, as business competiton is becoming increasingly intense, heated, & global.

In fact, if and when it's possible, the vast majority of companies would much rather have a completely automated operation, with virtually no human labour whatsoever. This will eventually be by far the most profitable option for most of them. This is not just going to affect future generations, it's affecting us right now. Just think about how many "robo-calls" you get already. Driverless cars & trucks will be on the roads within 10 years, along with robo-financial advisors, & the list goes on & on. We also seem to forget about all of the robotics we've already had for years, like ATM's & factory automation. Many politicians love to blame trade deals like NAFTA for much of the middle class factory job losses, but it's been proven that automation & robotics are by far the biggest culprits.

Instead of fighting against the freight trains of globalization & automation, which is simply not going to work, we should be adapting (globally) to these new realities. We are wasting precious time flogging obsolete ideologies about jobs and economics. There is a growing desperation that is starting to affect a quickly growing number of people, & we do not have any more time to waste.

The top wealthy earn the vast majority of their money from investments, which greatly benefit from reducing expenses, & employee wages are virtually always the biggest expense on any balance sheet. On the other end of the wealth spectrum, wages & jobs are going to continue to shrink & disappear if we do not wake up and smell this coffee. The wealth & income gaps are getting wider, and we cannot just use the same old obsolete economic methods, and expect this to reverse.

The collective work that is remaining (even as it continues to shrink) must be divided relatively evenly among those who are able, need, & want to work. This shorter work-week must also pay enough for a comfortable living. This solution will obviously not be popular with virtually any company on Earth, but nevertheless, it is the true solution. Eventually, inevitably, it will come to pass. It's just a question of how stubbornly we're going to cling to the old (& current) economic traditions.

People living in extremely poor countries tend to have a very fatalistic attitude towards this life. They feel trapped in their situation, and therefore start to prioritize the next life (afterlife). This is really what is fueling many of the world's biggest problems, including terrorism. Military action is not going to solve these issues. If we really want to live in an increasingly stable world, then we need to start addressing the underlying root problem, which is mainly the growing global economic inequality. If everyone on Earth has the chance of having quality of life, then the rest of the world can relax and enjoy theirs. If however, the greed-fest continues to grow, then planet Earth will become an increasingly unstable and dangerous place to live.

I personally believe in a spiritual afterlife, but I also believe that we should be making living conditions on Earth better for our future generations (and ourselves), not worse, and this should be an equal priority to our future afterlife (if we believe in one). Otherwise, it's just pure selfishness. While this may be an over-simplification of some extremely complicated subjects, often it's more effective to zoom out and glance at the bigger picture to gain perspective, before zooming back in for the details.

Even in the richer countries, things as basic as lead-free drinking water have not always been a high priority, depending on the wealth of a city or area (think Flint Michigan!). It's not a level playing field, when young children are being forced to drink lead-water, just to save a few bucks on local infrastructure!

Rising sea levels are going to be putting much of this infrastructure, all over the world, under far more strain as the years go by. Climate change will be increasing the frequency and intensity of droughts, heat waves, floods, subsidence & sinkholes, buckling roads, aquifer depletion, septic system issues, etc. All governments need to prioritize keeping up on infrastructure maintenance for everyone, not just the rich.

Politicians don't usually see these sorts of issues as being all that flashy, sexy, or exciting. They generally prefer the more impressive projects, such as new buildings or public transit, over replacing pipes in the ground that no one can see. This is obviously a very unwise attitude, as these problems can often take decades to resolve. The closer an area is to sea level, the more dramatic these problems will be, as this global average rising level continues to accelerate. Not trying to scare anyone, but better to live in reality than fantasy and denial. It tends to result in wiser decisions being made.

While taxing the ultra-wealthy across the globe (fairly) may seem like an extremely blunt instrument to use, it's also likely to be by far the simplest, and most effective method of solving the massive problem of the growing wealth gaps in our world. This should NOT affect those individuals, families, and businesses who are only moderately or reasonably well-off.

It should be used only in cases of obscene wealth, simply because these monstrous collections of assets so intensely dwarf the net worth of the moderately well-off. If this sounds like discrimination against the extreme elite, then boo-hoo. At least they have their yachts, mansions, and bucket-loads of money to console them. And if governments start going too far with this, to the point of it actually being unfair against the global elite, I'm sure we'll hear about it soon enough.

In recent years, especially since the end of the pandemic, there seems to be NO shortage of low-wage and "gig economy" jobs. The shortage is more in the area of decent to good-paying, middle class jobs. What this is creating is a vast number of working poor. People, who are often highly educated, working their butts off just to (maybe) pay the rent.

If our capitalist system can't provide a decent quality of life for the vast majority of citizens in our world, then we're going to experience far more of the types of problems we're now just beginning to see a lot of in the richer countries. Homelessness, drug addiction, mass shootings, along with extreme and rising crime levels of all types.

This is creating a world which will ultimately rob even the ultra-wealthy from THEIR quality of life as well, as the stability, security, & violent crime rates in the richer countries start to become a much bigger problem. It's not exactly quality living, if you're almost constantly worried about becoming the next victim of a violent crime.

While it's true that once in a while a wealthy individual (such as Bin Laden for example), will do something horrific mainly for the global attention, most often this problem is caused by extreme and widespread wealth inequality.

Free will is an extremely powerful human ability, especially when you have a world full of angry & oppressed people. Human will power gives EVERY person on Earth the ability to go off-script, which has the potential to create very serious security risks, especially for the ultra-wealthy. Unless they plan on locking themselves away in a fortress of high security, it might be a much better plan to keep the vast majority of citizens in their society reasonably happy with their overall situation in life.

If we create a world where the vast majority are working as virtual slaves, then the quality of life for EVERYONE goes down the drain. Every time a job gets permanently erased by technology, we say oh well, another better paying job will just be created somewhere else to replace it. While this is indeed true in some cases, the vast majority of the time it's not.

If it WERE true, then we would never see companies doing it, since the bottom line is all that most really care about. If big business cared at all about their employees, they would be paying them ALL at least a living wage. Especially since after work, these same employees are also customers. A bit of extra money left over after paying the bills means they have money to spend, and spend it they often will.

Extreme wealth is the most common method people use to feel significant in this life. Historically however, when you look back at the individuals who DO have an incredible legacy, it's actually very rare to see those who are revered, or even remembered for simply being wealthy. A powerful legacy is far more commonly created by someone doing something that makes life better for everyone, no matter their status, level of wealth, or perceived significance in life.

Great examples of people who demonstrate this would be Vincent van Gogh, Edgar Allan Poe, Emily Dickinson, Galileo Galilei, John Keats, Oscar Wilde, Jeff Buckley, and Johann Sabastian Bach. These amazingly talented artists, writers, & scientists were all dirt poor when they were alive, and did NOT become legendary for making our world a much better place until after their death.

While alive, the world's perception was that these incredibly gifted individuals were almost completely insignificant. It would be difficult to know for sure, but the odds are they barely cared about money, if at all. They spent their lives working hard at their craft for the sheer love of it, and to benefit others in society. Posthumously, their contributions to the world will remain legendary indefinitely.

In his lifetime, Van Gogh sold only one painting, for approx. $109 in today dollars. He suffered from severe depression, various other mental issues, and poverty, which lead to his commiting suicide at 37 years of age. While alive, people perceived him as being a madman and a complete failure. After his death, 2100 more of his artworks were discovered, and now hang on the walls of the ultra-wealthy and greatest galleries on Earth.

For many decades now, and likely until the end of humanity as we know it, he along with the other brilliant and misunderstood geniuses in this list, will be considered some of the most significant human beings to ever walk the Earth. It's completely fascinating, how the world's perception of the worth or importance of a person can change so dramatically. And how the quantity of money they had or earned in their entire lifetime is almost completely irrelevant.

My point, is that these insanely massive and growing wealth gaps are beyond ridiculous. Yes, our planet does have an equally gigantic obsession and problem with over-consumption. And this indeed would be a much bigger problem if we were to lift all in the world out of poverty.

The true solution, is to speed up energy transition at a similar or faster rate than our reducing of the wealth gaps. If we do these two things simultaneously, then this will ensure the sustainability of Earth's capacity to accommodate our combined human activities, from now until the remainder of our time on this Earth.

Think Big Picture on The Wealth Gaps | The Bigger Picture