It seems that most of what is being written about the current state of the political economy is pretty gloomy. The Rich Are Getting Richer seems to be the mantra of many on (surprisingly) both sides of the political spectrum. And statistically, the numbers don’t disagree. We also are bombarded with the ‘rising cost’ of seemingly everything even though wages are only growing slowly for some. I’m not here to debate the whole wealth and income inequality issue. I’m not really into stirring that pot and I’m pretty sure it has been stirred enough. But it is interesting to see what is often neglected and fails to make headlines or cover pieces for major media. In many ways, we are all getting richer.
Are we actually getting poorer or richer? I think we are getting richer. We live in a time of incredible security and opportunity. Technology has increased so rapidly in the past fifty years, we can’t even comprehend how fortunate we are. It is a pretty cool time in history to be alive. First world countries today are incredibly wealthy. Even second world countries have access to amenities that would have only been available to the insanely wealthy just a hundred years ago. We are really rich. We have so much, not just in material possessions, but in security, opportunity, and availability of knowledge. We even have access to incredible, delicious food year round!
Here is an example. Would you rather make 200k and all your best friends, family members and coworkers made 500k – or – make 100k while everyone else made 50k? Economists would argue, holding everything else constant, that no rational person would choose 100k if 200k was an option. 200k allows you to buy twice as much and should provide significantly more utility to your life. However, we tend to compare ourselves to the people around us. Most people would feel richer if they made a lot more than their peers. That is why someone making 400k on wall street might feel pinched while someone making 40k in rural Louisiana may feel wealthy.
We constantly compare ourselves to others. And interestingly enough, that comparison is easier than it ever has been. With a few clicks of Twitter, Instagram or FB we are instantly aware of the new cars, houses, or jobs our friends and family obtain. Our society watches hours upon hours of television each month. And we are constantly bombarded with advertisements in one form or another. We are constantly comparing ourselves to others. Even if we increase our wealth, we tend to notice the things we do not have rather than be grateful of the things we do have. In addition, as a society, we are filled to the brim with overconsumption. Just look at the amount of debt and the minimal savings that exists in the Western world. We often feel the need to borrow money simply to keep up with the people around us.
We Are All Rich
If you are reading this post, you are rich. You have electricity, access to a computer, clean water and probably even some food in your pantry. Chances are good you have a roof over your head and even some form of transportation. You probably live in a country with a reasonable amount of security. Historically, this simple list puts you in the elite of elite. It is pretty incredible when we think about it. Although we focus on what we don’t have, we take for granted all the simple, amazing fundamental parts of our lives and existence.
Specific Area of Insane Richness
There are plenty of specific areas where the wealth we possess is incredible. We are so rich that we rarely notice. A lot of people complain about stagnate wages and decreased buying power due to the cost of goods rising. But rarely is it mentioned that tons of goods and services we use have actually gotten much cheaper over time! Technology is pretty amazing. Here is just a small list of things that have gotten significantly cheaper than in the past:
- Cost of Communication – Think free Skype video calls across the world, $5 basic cell phones, Free landline calling
- $1/Gigahertz of Processing Power
- $1/Airline Mile Flown
- $1/Inch of TV
- $1/Sq of Single Family Real Estate – Housing prices have remained surprisingly stable near inflation while the average home size has doubled in the last fifty years
- $1/Clothing Good – Basic clothing is now super inexpensive and there is such an excess of clothing in our society that high quality, used clothing is basically given away
- Basic Medication – Penicillin, Acetaminophen and other basic antibiotics
- College Level Educational Material – Pretty much free at this point. No branded ‘experiences’ but all the information is out there for free or a nominal fee
- Books – Have you been to your local library? Your great grandparents wouldn’t believe you if you told them you had access to 100,000s of books for free anytime you want.
- Music – Spotify anyone? You can literally listen to pretty much any song ever streamed to your computer for free. That is pretty crazy.
- Plumbing/Electricity/Water – These are often so inexpensive they are almost a neglected minor line item on a middle class family
These are just a few examples. I’m sure you can think of plenty in your life.
We are all getting richer. That won’t make headlines. Actually, Joe is getting rich and Peggy is not. That sells magazines. That gets people elected. That makes some people angry and others defensive. Emotion creates action and polarization. We are all pretty rich and we are getting richer. However, our tendency is to simply consume more due to the fact that is what we see around us. Most of the people in the first world are busy spinning their wheels on the hedonic treadmill. But the great news is that you don’t have to participate. You can step back, realize that you are already pretty rich, and enjoy a slower paced life. You can always take another spin over at Mr. Money Mustache and read some nice face-punching information on efficiency that will explain in detail how it is possible to live a pretty awesome life without all the excess.
It is time to get out of the comparison economics trap. If you are in a bad place, you don’t have to be mad at people who are getting richer. Chances are, with a few tweaks and a different mindset you would be/could be/are rich. Take a few minutes to realize what we already have in our lives. What we have access to. The choices and opportunities that exist for us and our families. We already live a life of luxury that history would beg for. We are all getting richer.