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We Are All Wealthy - The Life and Thoughts of Zach

Jan. 6th, 2007

07:49 pm - We Are All Wealthy

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DID YOU KNOW?

The world's 225 richest people now have a combined wealth of $1 trillion. That's equal to the combined annual income of the world's 2.5 billion poorest people.

A person living in the US at the federal poverty level for a one-person household ($9310/year) is in the top 13.46% richest people in the world. At $50,000/year a person is in the top 0.98% of the world.

Current Mood: shockedshocked

Comments:

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From:obfuscate
Date:January 7th, 2007 01:57 am (UTC)
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Goddamn. I feel like a really horrible person for aspiring to pass the $30K mark.
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From:tmesser
Date:January 7th, 2007 02:00 am (UTC)
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Similarly, I don't know whether to be happy or extremely sad that I'm in that 0.98% group.
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From:herbivorous
Date:January 7th, 2007 04:31 am (UTC)
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Oh, yeah. Every now and then when I get a bit sorry for myself about my "money troubles", I remind myself that I am driving around in a car, with a cell phone and clean clothing, worried about having *too much* to eat. Really puts things in perspective.
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From:skywind8
Date:January 7th, 2007 07:15 am (UTC)
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And I'm in the top 10% (or so) of incomes in my metro area... and still can't really afford medical bills and other aspects of a good standard of living. What does that imply about the other 90% of the residents? What does it imply about the costs of healthcare and its availability? Blah. Mixed up world.
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From:tinyshel
Date:January 7th, 2007 05:00 pm (UTC)
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Exactly what I was going to comment on. Having lived in England and the US and having family in Italy, I can say that these approximations are usually overly simplistic. What I make in England makes me feel rich when I travel, but it's just because the pound is so strong right now. While in England, I'm living in a moldy house in one of London's poorest counties.

I'm not saying that I live an awful life or something (far from it! I realise I'm fortunate!), but I'm just saying that one could live a comfortable life within their country, but then when the currency is translated into some simplistic 'world economy' scale it makes them look poorer than they really are.
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From:zarfmouse
Date:January 7th, 2007 07:22 pm (UTC)
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Yah, I think these statistics definitely say a lot more about trends and distribution of wealth than about individual comfort.

See my comments below.
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From:vahkvahk
Date:January 7th, 2007 06:25 pm (UTC)
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Yeah, I was going to ask the same thing. I'm not a global economist, but I notice that when I'm travelling in third world countries, everything is cheaper. So, yes, a peasant day-laborer in rural Mexico (which is not that poor as countries go) only makes $10/day or whatever, but that is enough to pay for housing, food, basic medical care, and even beer. I feel worse for the guy making $5/hour on the south side of Chicago, even though he makes "more money".
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From:zarfmouse
Date:January 7th, 2007 07:15 pm (UTC)
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I don't disagree. See my comments below.

But keep in mind that the guy working for minimum wage on the south side is much more likely to have things like a TV or a car. He's probably less likely to be killed by random violence (though he's certainly more likely than someone in a nice neighborhood on the north side...security and cost of living are often closely tied). He's probably more likely to receive high quality medical care in case of severe trauma (e.g. if his life depends on it, it doesn't matter if he can pay). He has access to public transportation, public parks, libraries, clean water, workplace safety standards, cheap gas. His expected lifespan is longer.

None of this is at all enough to not "feel bad" for the guy. He's in poverty. He can't support his family. He doesn't have what he needs. But there are non-abstract reasons why his cost of living is higher. It isn't arbitrary. He has access to more wealth. Sadly, he can't pay his bills with that wealth but it's still there. That's the point of this exercise, to see how wealth is distributed around the world. To see how much the US has at the expense of the rest of the world.

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From:zarfmouse
Date:January 7th, 2007 06:48 pm (UTC)
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Of course not, but that is part of the point of the site. It goes on to make some suggestions about how our money could be used to address poverty elsewhere in the world. For instance what it costs us to buy a few dozen apples could be used to buy a Honduran farmer a few dozen apple trees.

Why is our cost of living high? Because our nation is wealthy. Because we are surrounded by resources and infrastructure that are valuable to us. Because we enjoy a fairly high level of security. I suspect that most poor Americans would not want to leave for a place with a lower cost of living to be, for instance, well off Somalis.

This isn't at all meant to trivialize the very real poverty and hardship that many Americans face. It's just meant to show how widespread the inequities in wealth distribution are worldwide.

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From:xymboulos
Date:January 8th, 2007 03:29 am (UTC)
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Another key element to factor into the disparity is the difference in monetization. In the US, we are highly monetized with very many services and products going through the formal market. Our diverse consumer market, for better or worse, makes us highly specialized and interdependent on each other for key services. In other countries, people produce many goods for themselves that we would purchase from others.

A good example of this would be to compare two families. In the first, both parents have salaried jobs. In the second, one parent has a salaried job and the other works at home, taking care of the children and maintaining the household. Let us assume that all three salaried jobs have the same income, X, and all four parents are highly satisfied with their careers. Let us also assume that the first family must spend one entire income (after taxes) on services like day care, restaurant, and cleaning services. The net result is that both families have comparable qualities of life, yet economists would determine that the first family has twice the income of the latter.

Beyond the questions of cost of living and monetization, I am also always curious to find out the methodology behind these calculations. Does income just include individual currency receivables or does it also factor in self-developed or in-kind services and goods? How is wealth calculated; simply by adding securitized and currency instruments or does it also factor in real estate and intangibles like education and public services?

The specific comparison above is of particular interest as it compares static wealth ($) to income ($/yr). I'm not sure what this comparison really tells us, aside from being a dramatic illustration of financial disparity (which I certainly do not disagree with).
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From:zarfmouse
Date:January 8th, 2007 06:51 am (UTC)
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Yah, I think dramatic illustration is all we can really hope for from this. Certainly if the numbers were anywhere near the same orders of magnitude it would be important to look into these details.

But when we're talking about monetary amounts that are disparate by a factor of thousands, millions, or billions...it kind of cancels out considerations about different standards of living, monetization, comparing wealth to income (multiply the income figures by 50 years and it's still a staggering difference). The income-wealth comparison is useful for illustration because the vast majority of people have negligible or negative net wealth but most people have some kind of income.

These aren't meant to be numbers for calculating how my life really compares to the life of someone from china. These are for showing in plain terms using basic data how grossly disparate the distribution of wealth and income are.
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From:poppins17
Date:January 7th, 2007 05:25 pm (UTC)
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Thanks for the link! I can totally use this in my essays for the hunger fellowship I'm applying for.

As sickening as it is, I find it interesting that, as far as the government's concerned, I'm not in the top 13%. (I don't think I made $4,000 in 2006.)
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From:mathuaerknedam
Date:January 8th, 2007 04:08 pm (UTC)
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Check out goodmeasure.org, they have some interesting stats. I think the fact that they limit "available" discretionary funds to that spent by self-identified Christians makes the numbers all the more striking.
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From:samwize
Date:January 8th, 2007 04:11 pm (UTC)

But then, I'm an extropian.

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See, I look a those numbers and don't think "I'm wealthy", I think "We need to create more resources so that we are not all so desperately poor".

There is no reason we should not have (or at minimum aspire to have with great vigor) the buying power of billionaires in the hands of everyone.
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From:anarchist_nomad
Date:January 17th, 2007 11:07 pm (UTC)
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At $50,000/year a person is in the top 0.98% of the world.

While I fully endorse the sentiment expressed here, there is no way these numbers are correct. Observe:

The global population is approximately 6.5 billion people (6,500,000,000). I will approximate 0.98% as 1% and so there are 65 million people (65,000,000) who comprise the top 1%. According to the numbers you cite, earning $50,000/year qualifies you as a member of this group. In the United States, $50,000/year is roughly the median income. Thus, half the people in the United States earn $50,000/year or more. The population of the United States is 300 million (300,000,000). Thus, half the population of the United States is 150 million. However, you cannot have 150,000,000 people qualified to be in the top 1% -- because, by the very definition of percentages, only 65,000,000 people can be there! Hence these numbers are self-inconsistent and, as such, wrong.

Again, the intention is good -- bringing people's attention to the enormous inequality of global wealth. Have you heard of the L curve?

By the way, I was sorry to notice that you unfriended me. I'm not sure why you did; we don't know each other well, but have had interesting interactions about everything from politics to comic books -- some of it within this journal. I guess I will unfriend you back, as your public journal has very little of substance on it. Pity -- I was looking forward to reading about your time in Australia (one of the two continents I still have to get to).
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From:zarfmouse
Date:January 19th, 2007 05:37 am (UTC)
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Yah this was pointed out later by some friends of mine on another forum. They suggest that perhaps the scale does something funky in terms of normalizing wages to some standardized currency value and/or that the scale is doing something weird with how it distributes household incomes among the members of the household. In anycase, I would hope that anyone in their right mind would realize that statistics like this are deeply generalizing and flawed. I consider any stats presented in the same format as "What Buffy Character Are You?" memes to be just about equally credible. Fact of the matter is that even with the errors you point out, the answers are still in the right order of magnitude. Perhaps the median american is in the top 5% instead of the top 1%...still a big deal.

Regarding the unfriending...it really just seemed like every time you have posted in my journal it has been to argue with me, to contradict something I said, or to generally question/belittle my activist/progressive/anarchist/decent-human/comic-fan/whatever credibility/identity. I certainly don't mind friendly disagreement or correction of incorrect facts but for whatever reason your comments consistently struck me as combative, competitive, or nitpicky. For whatever reason, I feel uneasy/insecure around you..dunno if it's your attitude or my own false observations or what. I can't really deal with the feeling that I have to justify myself to someone I barely know and who barely knows me. I'm well aware that this is more my issue of how I am reading and responding to your words than how you are _actually_ trying to communicate with me. If we just have incompatible communication styles then so be it...either way I figured that after a few years of coping and getting nowhere, an unfriending was the best for my psyche.

It isn't that anything you have said is even incorrect. It's just that these kind of corrections are the ONLY thing you ever post. It'd be a lot easier for me to take if we also shared a fair amount of friendly banter. (For instance my long time friend xymboulos frequently critiques my more political posts and I love it...he and I have been close friends since high school and I understand where he's coming from.

The first time it happened I tried to engage you in dialog over email about it, so we didn't have to debate about personal issues with an audience and you didn't respond. That led to me taking further comments in the light of being made more for the benefit of some audience than for me. That this discussion is taking place in LJ rather than in email is similarly strange to me. But here I am being a party to that strangeness by responding here instead of in email. "It's not you, it's me."

I also find that for whatever reason your LJ is one of the many that I just skim because I don't have time and I don't know you well enough to need constant updates on your life. I have unfriended dozens of such people over the past year and continue to do so. Part of my time management work has been to pare down my friendslist and I have to become increasingly aggressive in my criteria as I do so.
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From:anarchist_nomad
Date:January 27th, 2007 10:59 am (UTC)
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Sorry for the delayed reply -- I've been falling behind on communication lately, due to a fairly active couple of weeks. I made a blanket apology for this in my journal recently, but I understand that you wouldn't have seen that.

Anyway, this reply can be broken into two parts. Here goes the first part:

Fact of the matter is that even with the errors you point out, the answers are still in the right order of magnitude. Perhaps the median american is in the top 5% instead of the top 1%...still a big deal.

Order of magnitude works well with astronomy... not so much with human affairs. 10% is the same order of magnitude as 80%, but the two numbers are clearly very different when they describe human matters. Heck, you could look at Bush's 28% approval rating and tell somebody it was 98% -- if they disagree, point out that it was the same order of magnitude. Technically correct, but still grossly misleading. You see what I mean?

That said, I hope I was quite clear that I agreed with the intent of this statistic, that the standard of living in the USA is far higher than in the rest of the world. (Having lived in two other countries, I am well aware of this fact) As Kennan wrote, in a policy planning study for the State Department back in 1948:

"We have about 50% of the world's wealth, but only 6.3% of its population....In this situation, we cannot fail to be the object of envy and resentment. Our real task in the coming period is to devise a pattern of relationships which will permit us to maintain this position of disparity....To do so, we will have to dispense with all sentimentality and day-dreaming; and our attention will have to be concentrated everywhere
on our immediate national objectives.... We should cease to talk about vague and...unreal objectives such as human rights, the raising of the living standards, and democratization. The day is not far off when we are going to have to deal in straight power concepts. The less we are then hampered by idealistic slogans, the better."


And that was in 1948! For sure, the disparity has gotten worse since then. It is no accident that the median wealth in the United States is so high on a global scale -- it comes from the exploitation of the rest of the world, particularly the third world. Middle Class Americans now like to complain about the economic threat from the Chinese... but the same people still enjoy buying cheap "made in China" goods, produced in sweatshops, which are at the heart of our enormous trade deficit with China.

However, though all this is true, the statistics you cited are self-inconsistent and, as such, not true. Which makes spreading them harmful. Not necessarily here, where you are essentially "preaching to a choir" of people who believe similarly, that global poverty is a bad thing. But when talking to people who are not so sympathetic, pulling out blatantly wrong numbers -- either you or somebody who trusts you and thus took the numbers from your posting -- are going to have their whole credibility shot to hell by quoting something so obviously wrong. Make sense? Do you really want your credibility to be taken as seriously as a "What Buffy character are you" meme? Do you think global poverty deserves the same level of attention to detail and fact checking as such a meme?

I know you're a smart guy, which is why I take the trouble to point this out. I was able to perform a consistency check on your numbers in under a minute. I suspect you could have done the same in a similar amount of time. Which is why it looks pretty damn sloppy when you don't.

In any case, that's the first reply. Second to follow concerning the unfriending.
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From:anarchist_nomad
Date:January 27th, 2007 11:22 am (UTC)

Reply the second

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Regarding the unfriending, I am sorry that you felt like the only contact I wanted to have with you was confrontational. I certainly agree that I have made very little chit-chat or banter with you for many months. When we met, and obviously had a lot in common, I thought we would become friends -- in real life, not on LJ -- but that clearly did not happen. You virtually never commented in my blog -- I was quite surprised to see you make a comment last Spring to avoid being removed during my annual Spring cleaning of my friends list -- and, even after moving to Chicago, never took up any of my invitations to the bi-monthly parties at the Event Horizon. So, yeah, I eventually removed you from the party invitation list and stopped posting much in your blog. Yes, we had radical leftist politics and a science background and comic books and more in common (I understand even more now, as you have also gone polyamorous). But if you weren't interested in forming a friendship, then I didn't have the time or energy to try to change your mind. But I still found you interesting and enjoyed reading about what you were up to.

Still, with the banter gone, I suppose that left, more or less, the comments that you have deemed as "belittling" to you. They were not intended as "combative" or "competitive", as you seemed to find them. Some things, like asking how you could reconcile being an anti-capitalist and yet still exploiting others for income as a landlord, are things I wanted to ask for a very long time (check with cassiopia if you don't believe me), but avoided it because I thought it would be taken as too confrontational. I only brought it up when you basically made an opening to in your blog that I thought I could use to ask without seeming like I was attacking you (since an attack was not my intent). Other comments were made because, like the one on this post, you were blatantly wrong and I know you are smarter than that. Yes, I am a scientist and value accuracy in statistics... and maybe I shouldn't expect that of others. But I know that you have a science education, even though you are not a scientist, and are intelligent and, thus, capable of putting some thought into what you post. If that offends you, I apologize. Still other comments that you took thus were intended as the friendly banter that you claim never happened. For example, the comments about comic books and Civil War. I mean, it's comic books! How serious could it be? Indeed, I even started a chatty thread in your blog with one of your other friends... but you mainly avoided chiming in.

Regarding the e-mail you claim to have sent me to discuss what appears to be a difference in communication style, I have no recollection of reading it. Which is quite possible, since my memory is good... but not perfect. I checked my e-mail archives, which I have maintained quite meticulously since Aug 1998, and found no record of it there, either. Which is still possible, as computers are not perfect, but much less likely. Are you sure that you ever sent such an e-mail? In any case, the likely fact that I never received it is why you never received a reply. E-mail is like that, an imperfect medium, and so a lack of a reply should never be taken as indicative of a certain intention without following up first.

Anyway, this is neither here nor there. When it became clear that you weren't interested in being real-life friends, I still enjoyed reading your blog. In particular, I had looked forward to reading about your experiences in Australia, which is one of the two continents I have not yet visited. However, you are obviously much less interested in anything that I have to write about. And, ultimately, we have known each other for less than two years -- we met in May or June of 2005 -- and were LJ friends for only a little over one year (not the "few years of coping" that you claim to have endured). So the loss of contact is indeed a loss to me, but a very small one.

I hope that you are enjoying your time in Australia right now. And have a nice life...
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