Wealth is Relative

[hmkpoker]

Humans in a free market create their own equality.

Go out for a drive and take a look at the neighborhoods. You'll notice that the wealthy tend to group together in wealthy neighborhoods and the poor in poor neighborhoods. If you observe how people make friends, you'll see that people tend to hang out with other members of similar incomes, and they tend to work with people of similar incomes (well, I guess that's obvious).

These psychological needs for equality and belonging (which most certainly exist) do not require macroeconomic egalitarianism. They can be satisfied by picking the right group of people to surround yourself with.

Besides, income equality does not guarantee a lack of competition. People will still strive to improve themselves along whatever proxies are most important. I think the most competitive environment I've ever been in was high school. Income didn't matter much because no one had any expenses, but there was a very rigid hierarchy centered around physical appearance. College was similar, except it was something of an academic meritocracy.

[Metric]

Individuals assign relative value to all sorts of things in all sorts of complicated ways -- "standard of living," though, is not relative.

[valtaherra]

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Wealth, like other descriptors, is a purely relative measure.


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No, it isnt. Wealth is not a descriptor, nor is it relative. Wealth is a real thing that is created and destroyed, produced and consumed via economic activity. Items of wealth are products that satisfy our desires. One man's wealth is a bentley, another man's is a fishing rod his Dad gave him - they are in no way relative.

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It shares this quality with adjectives like "big," "tall," and "bright," among others.


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No, it doesn't. These are adjectives. Wealth is a noun.

[valtaherra]

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ACers are just going to respond that absolute wealth certainly isn't relative and has a variety of quantifiable measures

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Perhaps they would, on opposite day.

[valtaherra]

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If you want to make an argument about wealth, much better to use quantifiable measures of wellbeing

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Any such argument would be trounced, easily, once someone points out that there is no cardinal unit of measurement for "well-being."

[LinusKS]

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The explanation is that as the average income increased, the amount of stuff people need to be average increased as well.

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Thanks, Capt Obvious. Again... what's the point?

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The point is that the distribution of wealth in society matters, and the fact that a janitor today is better off than a king in 1492, does not matter.

A janitor compares his station in life to the lives of people who are alive today, not to people who've been dead 500 years or more.

His sense of satisfaction with his station depends not on whether he has stuff, but on how much stuff he has in relation to others.

Wealth is a relative, not an absolute measure.

Of course, you can argue that it's stupid to base your sense of self-worth or happiness on how much stuff you have... but that's another argument.

[TomCollins]

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The explanation is that as the average income increased, the amount of stuff people need to be average increased as well.

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Thanks, Capt Obvious. Again... what's the point?

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The point is that the distribution of wealth in society matters, and the fact that a janitor today is better off than a king in 1492, does not matter.

A janitor compares his station in life to the lives of people who are alive today, not to people who've been dead 500 years or more.

His sense of satisfaction with his station depends not on whether he has stuff, but on how much stuff he has in relation to others.

Wealth is a relative, not an absolute measure.

Of course, you can argue that it's stupid to base your sense of self-worth or happiness on how much stuff you have... but that's another argument.

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Last year I went to Disney World. I was having a great time. Then I looked around and realized everyone else was really happy too. That made me realize I couldn't have been happy since everyone else was too.

[AlexM]

So let me get this straight. You believe that a society of people who live the quality of life equivalent of $1,000 a year, but everyone has the exact same amount, are better off than those where the poorest live the quality of life equivalent of $100,000 but some have billions?

[Girchuck]

The gap by itself is not a huge problem.
The problem is the trend. It appears that the rich are getting richer faster and faster, and the share of total wealth that the top x% controls gets bigger
As long as wealth equals power, the top x% are getting more and more power over the rest. It is this power concetration that bothers many. When more wealth in your neighbors hands translates into more control over you, you fear becoming a slave as the end stage of this trend. This is what drives the argument.

[John Kilduff]

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The explanation is that as the average income increased, the amount of stuff people need to be average increased as well.

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Thanks, Capt Obvious. Again... what's the point?

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The point is that the distribution of wealth in society matters, and the fact that a janitor today is better off than a king in 1492, does not matter.

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A janitor compares his station in life to the lives of people who are alive today, not to people who've been dead 500 years or more.

His sense of satisfaction with his station depends not on whether he has stuff, but on how much stuff he has in relation to others.

Wealth is a relative, not an absolute measure.

Of course, you can argue that it's stupid to base your sense of self-worth or happiness on how much stuff you have... but that's another argument.

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So the fact that a janitor today lives longer and healthier than a 15th century king, and doesn't have to contend with flea and lice on his person, and has a minor problem rather than a major problem if he gets a toothache - all these things are irrelevant?

Which would you rather be:

1. a rich 15th century nobleman with poor health, and fleas and lice, and a wife that hardly bathes, and both of you have permanently bad breath; and often your food is spoiled or spoiling -

or

2. a janitor today with plenty of healthy food and a clean reasonably healthy lifestyle and enough money to pay the bills and have a modest decent apartment or small house?

Do you suppose toothaches aren't a source of dissatisfaction as long as everybody walks around with a toothache most of the time?

I agree that people do compare their positions to those of others, but they [/i]also[/i] compare their positions with where they would like to be solely for themselves. If I want a toothache treated, that has nothing to do with how many opther people are walking around with toothaches. If I want a comfortable retirement income, I don't much care if someone else can retire with 10 times as much, as long as I have enough to satisfy my reasonable wants and needs. If I don't have enough for that, that is a problem; but if I do, and if The Donald has 1,000 times that, I don't really care.

It sounds like you are pretty fixated on the notion of inequality and that you may someone who evaluates your happiness almost entirely by comparing your situation with others. May I suggest that that is a skewed outlook if it is all that you weigh when deciding what you want or need or will be happy with. Sure it is part of your outlook, but if it is by far the principal part of your outlook, then that suggests to me some sort of psychological fixation that prevents you from being happy with your own good fortune or things if some others happen to have more.

If I have a delicious, absolutely delicious roast beef Sunday dinner once a week, I'm not upset or dissatisfied if my neighbor has Chateaubriand every night. It isn't really that important. If you have enough, someone else having more may be slightly irritating at times, but if you are basically well-off, it doesn't matter much. If on the other hand you are actually needy it is a different story. Yet even then the main focus should be how to become not needy, not how to become as rich as the richest in the world else you can't be happy. Something is wrong with the psychological outlook you seem to be affirming.