Monday, October 29, 2007

Why You Are Rich

TCS Daily - Wealth and Nations has a great article about why the world is prospering. Yes, prospering. Disregard, just for the moment, all the statistics about how the top 15% of the bottom 25% didn't prosper as much as the lower 18% of the upper 9th percentile over the 2nd quarter. Bear with me here. It's worth it.

The world is prospering. There are reasons why the world is prospering. People are increasingly being left alone to pursue what they want to pursue, with less and less interference from Vested Interests, Governments, or The Blessings of Socialism.

Here's where it gets interesting. Most people believe that the wealthy should be taxed at a much higher taxation rate than currently exists. I don't care where you live, if you're reading this in English, you probably think that a large number of people are making too much money at the expense of everyone else.

So which percentile is making too much money? The top 30% ? Are they the ones making too much money relative to everyone else? Or do you think only the top 20% is hogging too much of the wealth? Go ahead and get a % in your head.
Then hit this link. Enter your yearly income in dollars, pounds, or euros. This website will show you how many people there are making more money than you do. Wander around the site for a while. Then come back....

If you are reading this Blog in English, chances are you live in a place that has a relatively Free Market. Chances are you have an income that is the envy of the rest of the world. You're doing great. It gets tough sometimes - but much of what we think of as a necessity is really a luxury, and you are dripping with luxuries. The test you just took was based on the exchange rates that were in place as of 2003. A dollar's a dollar. And one third of the world's population lives on two dollars per day. Do you ever wonder why?

I don't believe that the world's economy is a Zero Sum Game. I can win without someone else losing.

So instead of continually harping about redistributing wealth, why isn't there more discussion about redistributing the machinery of wealth? (Like free markets???) In other words, instead of raising taxes, tariffs, or import quotas to make Us as screwed up as Them, why aren't we lowering the barriers to making Them like Us? With all the racket currently being made about foreign oil dependency, why can't we simply make straight-up purchases of Brazilian ethanol? With all the noise about the high cost of food for low income Americans, why can't we purchase foreign sugar at whatever price they'll sell it for?
(Answer: Iowa wheat farmers and Florida sugar producers know how to purchase congressmen.)

Why do we put barriers in place making it difficult for "their" sugar, cotton, and ethanol to compete in "our" markets? (If you have the patience to read the report attached to the "ethanol" link, you can see where our sugar producers have lobbied for a piece of the currently fashionable ethanol action....)

Congratulations. You're rich. I hope you can stay that way.
And may your tribe increase.

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