Economics: Widgets Are Like the Avengers
In the multitude of the people is the king’s honor; but in the want of people is the destruction of the prince.
—Proverbs 14:28
Technology’s dramatic effect on humanity becomes most obvious when it comes to the economy, which makes that a good place to start our journey. The economy forms the foundation of our society, with everything else built on top of it. Innovation drives the economy since it enables us to divert our attention from menial tasks to newer and bigger endeavors. That’s why technology companies jingoistically refer to their products and services as “solutions.” The best of them do solve problems.
Let’s go back to the very beginning, to Blarg, a fictional caveman. Before innovation or “solutions,” Blarg’s life was tough. He shivered naked in a cave, subsisting on berries and roots that he managed to scavenge. When he wasn’t calling in sick to work because of pneumonia, he was doubling over at home with stomach pains. It wasn’t the most productive of times. But then our intrepid caveman discovered fire. Suddenly, he had a way to heat his hovel and even cook the flesh of small animals. Plus, he could see who was trying to grope him in the dark. No more E. coli or unexpected nighttime dalliances.
With the consequent improvements to his physical and mental health, Blarg took fewer sick days, which meant he and his tribe increased their daily berry and root harvest. This boost to surplus meant they could now trade with a nearby tribe for furs, which meant they didn’t have to shiver naked anymore. Or they just scared the hell out of their neighbors with their newfangled weapon and took said furs. Either way, fire improved human productivity. It also probably sparked an arms race, with neighboring tribes working on producing bigger and better fire, which became one of the first “solutions.”
The wheel, invented thousands of years later by Blarg’s descendants, also gave a huge boost to economic development. Not only could it help spin clay and create pots, it turned rapidly under a waterfall. In both cases, villagers made pottery and churned grindstones faster. When the wheel made its way into vehicles such as horse-drawn carts, travel and bearing heavy loads across long distances became possible. In all these applications, simple innovation eased the amount of work humans had to do in order to achieve the same or even increased results. Our backs have been better for it since.
Fast forward to the Age of Exploration, when international trade expanded in search of new trade routes and products abroad. Key to that endeavor was the invention of two devices we now consider extraordinarily mundane: the compass and the hourglass. GPS has rendered the former essentially obsolete unless you’re a wilderness scout, while the latter matters only to soap opera fans who watch Days of Our Lives. Yet by giving navigators the ability to time their journeys and direct them away from hazards such as bad weather, rocks, and mythical creatures like the Kraken, compasses and hourglasses doubled their effectiveness. Ships using such gadgets could make two round-trip journeys a year from Venice to Alexandria, for example, rather than just one. Other technological improvements, such as better materials and stronger structures, also meant that with a much smaller crew an eighteenth-century ship could carry ten times the cargo of its fourteenth-century predecessor.1
Throughout this brief timeline of human history, technological advances also spurred competition between individuals and entities. Fire may have given the advantage to one caveman tribe looking to steal furs, and better navigational tools the advantage to one colonial empire over another. Technology literally became the secret weapon. In more modern times, technological supremacy also determined global hierarchies. The twentieth century belonged to the United States because it first mastered and institutionalized scientific research and then combined it with close ties among government, businesses, and education—as seen in the development of the atomic bomb during the final years of World War II.2
Silicon Valley, the current hotbed of international technology, has played a dual role since its inception: military incubator and steady source of consumer innovations. We know Google as a search engine company, but we don’t hear nearly as much about the work it does for the military in fields such as robotics and analytics. Much of Google Earth and Google Maps, the omnipresent phone apps, were developed by Keyhole, a CIA-backed company purchased by Google in 2004. The company’s ongoing efforts in robotics are taking place in conjunction with the Pentagon. In 2013, it purchased Boston Dynamics, the contractor responsible for military robots such as the four-legged pack horse, BigDog, and the humanoid rescue machine, Atlas.
With the benefits of technology—increasing efficiency and productivity, fueling competition, and opening new markets—the world’s economy has grown exponentially. Economists estimate the worldwide gross domestic product (GDP) in the year zero at about 102 billion international dollars, the fictional currency used to measure values among places and times. Toward the end of the nineteenth century, during the golden age of shipping, that figure had climbed nearly a thousand percent to Int$1.1 trillion. By the close of the twentieth century, global GDP rose a further 3,000 percent to Int$33 trillion.3 That’s 33,000 percent growth since the reign of the Roman emperor Augustus. Even more surprising is that, despite all the doom and gloom in recent years about economic downturns, fiscal cliffs, and bailouts, there’s no sign of the world’s overall economy slowing down any time soon. The world’s GDP in 2013 was around $70 trillion, almost double what it had been only fifteen years prior.4
Increased globalization explains this acceleration. After the Cold War ended without a disastrous nuclear exchange, most of us found it immensely beneficial to cooperate with one another. Previously suppressed markets behind the Iron Curtain suddenly opened to North American and Western European business. More importantly, the détente made trade easier with China and India, two huge markets over which Western countries had been salivating for decades. On both sides, more people were free to participate in the new global economy than ever before.
Just as in the age of sailing, technology drove the growth. The Internet, which arose at the same time as this newfound harmony, provided the perfect tool at the perfect time. In the Western world, it became the ultimate equalizer that allowed entrepreneurs to compete with big, established businesses on an even footing, eventually leading to new wealth emerging from nothing. It also tied the East to that growth, bringing a number of Asian countries along for the ride.
On the one hand, the Internet enabled the rise of companies such as Amazon, eBay, Facebook, and Google, a quartet that took fewer than twenty years to amass a combined market capitalization greater than the big six automakers had in a century.5 On the other hand, it also allowed traditional businesses from AT&T to Shell to avail themselves of the East’s cheaper labor through Internet-connected call centers. Manufacturers and retailers, meanwhile, cut costs by moving production to China. Using just-in-time delivery technology, companies such as Dell and Wal-Mart introduced hugely profitable efficiencies into their businesses.
The West got richer, but the East may have benefited even more. China and India posted stellar economic growth numbers during this period. Much of that filtered down to the general populace, resulting in huge reductions in overall poverty. In one of the great unreported stories of our time, the proportion of people living in extreme poverty in the world fell by half between 1990 and 2010, beating the United Nations’ Millennium Development Goal by five years. Much of this happened because of the immense growth in China and India but also despite the global financial crisis. Nor was it just an Asian story: Outside China, the poverty rate fell from 41 percent in 1981 to 25 percent in 2008.6
The Internet has brought about huge economic benefits wherever people have steady access to it. A 2011 study of the G7 nations plus Russia, Brazil, China, India, South Korea, and Sweden found that the Internet contributed about 3.4 percent annually to GDP in those countries, an amount equal to the entire economic output of Spain or Canada. Internet-related consumption and expenditure now exceed agriculture or energy.7 As a tool, it has fired the imaginations of entrepreneurs the world over and introduced tremendous efficiencies to existing businesses. Moreover, the bigger impact has come from its ability to act as an instrument of creative destruction, disrupting traditional ways of creating, producing, and distributing products and services and replacing them with better methods, which we’ll see in later chapters.
With the Internet revolution only just beginning, the future is set for further exponential growth. Fledgling fields such as robotics, nanotechnology, genetics, and neuroscience represent entirely new markets for businesses and individuals to cultivate, while emerging markets in South America and Africa will ensure that the pie keeps getting bigger. Forecasters expect the global economy to double again to around $143 trillion by 2030.8 Leading the way will be the so-called emergent seven (E7) countries: China, India, Brazil, Mexico, Russia, Indonesia, and Turkey. Their combined economies now represent about 70 percent of the G7, but by 2050 they will be double its size.9 The balance of power is shifting and the world order as defined by population, where the size of a country’s market becomes its key influencer in global affairs, is balancing out. Back in the year zero, China and India accounted for a combined 70 percent of the world’s economy.10
This isn’t the end of the figurative world for the West because it’s not a zero-sum game. It’s actually a win-win situation, with smart, forward-thinking Western businesses benefiting from the opening and maturing of additional markets. As a PriceWaterhouseCoopers report puts it: “This larger global market should allow businesses in G7 economies to specialize more closely in their areas of comparative advantage, both at home and overseas, while G7 consumers continue to benefit from low-cost imports from the E7 and other emerging economies.”11 While already developed nations will see their overall share of global GDP shrink, their populations will still enjoy comparatively high income for some time. Chinese workers, for example, likely will earn only half the salaries of their American counterparts by 2050, while those in India will still make around only a quarter.12 These countries are advancing quickly and gaining more clout in global decision-making, but they still have hundreds of years of economic development to match.
When viewed through the detached lens of history, the long-term economic future of the world shines brightly, despite what we hear daily in the news. It’s no wonder that some experts are upbeat, including Nobel Prize–winning economist Edward Prescott, who has proclaimed that “the whole world’s going to be rich by the end of this century.”13 Microsoft founder Bill Gates is even more bullish: “I am optimistic enough about this that I am willing to make a prediction. By 2035, there will be almost no poor countries left in the world.”14
GINI IN A BOTTLE
But what about Occupy Wall Street and the decimation of the middle class? If everything’s going so well, why did thousands of people camp out in city parks around the globe a few years ago? Weren’t they saying the opposite, that the world is going to hell?
The movement had many messages, but, if the protesters’ central argument opposed the growing gap between rich and poor, they weren’t wrong. Global economic growth has accelerated dramatically over the past few decades, but so too have income disparities. The countries of the world have made significant progress toward equality among one another, but internally many have been heading in the opposite direction for several decades. Just as with technology, the world’s runaway economic growth also has a downside.
The Kuznets Curve—coined by Harvard economist Simon Kuznets in the mid-twentieth century—holds that inequality, in the shape of an upside down U, ties to industrialization. During a country’s early modernizing stages, inequality rises as farmers leave their land for higher-earning factory jobs in the city, creating an income gulf with those who stay behind. But as more people get better educations, they demand more equitable income redistribution from their government, which ultimately leads to a decline in inequality. That demand can take the form of organized opposition and even revolt. The same force gave birth to communism in the nineteenth century and unionization in America in the early twentieth.
The Kuznets Curve held its shape until around 1980, when it became more of a capital N, whereby inequality in many nations began a sharp turn upward.15 A variable called the Gini coefficient, coined by Italian statistician Corrado Gini in 1912, measures economic inequality. A rating of zero represents total equality: All of its people share a country’s wealth evenly. A score of one means the opposite: complete inequality, where one individual gets everything. No country—not even the most socialist welfare states or the most despotic tyrannies—is likely to hit either end of the spectrum, but the range of the scale means that even a small uptick represents a big increase in inequality. America has seen a lot of these small upticks, gaining nearly a tenth of a point over the past three decades, moving from 0.3 around 1980 to almost 0.4 in 2010. In more concrete terms, that means the disparity in disposable income between the top and bottom earners has climbed by almost 30 percent. China’s gulf has grown even bigger, around 50 percent. Conversely, the Gini coefficient in South America, traditionally the world’s most unequal continent, has fallen sharply over the past decade for reasons we’ll see later. Otherwise, the majority of people live in countries in which income disparities have grown bigger than they were a generation ago.16
The reason is a paradox: The same globalization that has enabled poorer countries to improve their lots by joining the world economy also has exacerbated income disparities between individuals by allowing the rich to get much richer. Thirty years ago, if you started a company in the United States and wanted to sell widgets, most of your customers would be in America. Maybe you could sell those widgets to Canada since it’s close by. You could have become rich doing this, and many people did. Still, that total market had somewhere around 350 million potential customers.
In a newly opened world, that same potential market has expanded into billions of potential customers. Smart business owners capitalized and became richer than they could have if they had stuck only to their home markets. Movies offer a great example. E.T.: The Extra-Terrestrial was the highest-grossing film of the 1980s, pulling in $435 million at the box office. Marvel’s The Avengers raked in a comparatively astronomical $1.5 billion in 2012, adjusted for inflation. Nearly 60 percent of that haul came from non-US theaters.17 That figure results both from globalization and from people in developing economies having more disposable income.
On the plus side for the individual, globalization has changed the nature of wealth creation. In the past, the most likely way to riches was through inheritance or owning land, but now plucky individuals can get there through entrepreneurialism or working at a hot company with stock options. Merit and opportunity have reentered the picture.
But inequality remains a big downside for those not partaking of those new opportunities. Exacerbating the issue—and a particular bugbear for the Occupy protesters—is cronyism, the cozy relationships that exist between politicians and the business world. It’s particularly bad in Russia, China, and India, which have a disproportionate number of billionaires thanks to insider access to land, natural resources, and government contracts. But it’s a problem in Western countries too, where government efforts to curtail harmful corporate behavior—regulating banks, oil companies, or telecom firms—are often lobbied into submission.
In real terms, all of this means that lower- and middle-class incomes in many developed countries have grown more slowly or not at all while the upper echelon has skyrocketed. In 2012 alone, the number of billionaires in the world increased by 10 percent to 2,160, while their combined wealth grew 14 percent to $6.2 trillion.18 No wonder people got angry.
A growing body of evidence shows that income disparity harms society. It leads to greater crime, worse public health, and other social ills, not to mention greater stress on people, which can result in high blood pressure, weaker immune systems, and even decreased sex drives. Income-related stress even affects the brains of children; one study found that seventeen-year-olds in poverty could circulate about eight thoughts at once, compared to around nine for better-off teens.19 One extra thought seems minor, but it could contain the seed that becomes the next Google. Never mind the mind: A thought is a terrible thing to waste.
Thomas McDade, a biological anthropologist at Northwestern University, says the effects of income disparity run deep:
We’re coming to understand that even if you have a stable job and a middle-class income, then your health is not as good as that of someone who is in the one percent. There is something more fundamental about social stratification that matters to health and the quality of social relationships. It matters because of what it means: can I participate in society?20
We’ll return to some of the social effects of inequality later, but for now there is some good news: We’ve already seen this movie several times. As the folks on Battlestar Galactica are fond of saying: All of this has happened before and will happen again.
Governments generally can address and fix growing inequality in three ways: taxes, spending, and regulation. Using all three properly is usually the only way to avoid a popular uprising. (See the French Revolution for how not to do it.) Rising inequality in Germany led Otto von Bismarck to introduce pensions and unemployment insurance in the 1880s while Theodore Roosevelt’s Square Deal in the early twentieth century broke the monopolies abusing workers and fattening business owners. Unions became powerful in the aftermath of those reforms, and minimum wages protected by law helped narrow the rising gap. While many European countries have opted for stronger redistribution of wealth through higher taxes (for example: tax-happy Sweden has the world’s lowest Gini coefficient, 0.24), North America historically has emphasized equality of opportunity, the ability of a person born to few or no advantages to climb the ladder into the echelon where he or she can take baths in Cristal and buy diamond-studded toothbrushes. The best way to ensure opportunity, economists agree, is for governments to invest in education—and not just universities, since that just reinforces class division, but at all levels.
US inequality shrank considerably between World War II and the 1970s, precisely because of that investment in education. The G.I. Bill, a package of benefits available to troops after the war, resulted in millions being able to afford higher education and home mortgages, thereby boosting their chances at upward mobility. But since then, that mobility has plummeted. In the 1970s, one year’s tuition at a public university cost about 4 percent of a typical household’s annual income, a number that jumped to 10 percent by 2009, thereby pricing many students out of postsecondary education. America is almost unique among wealthy countries in that men between the ages of twenty-five and thirty-four are now less likely than their fathers to have a college degree.21
The question then becomes: How long are the governments of the world going to allow this inequality to keep growing?
JOKER’S DILEMMA
Global economic growth and the internal inequality that comes with it bring to mind the Prisoner’s Dilemma, a manifestation of game theory that became relevant during the Cold War. We can consider this brewing discontent between the rich and the not-rich a new type of conflict—let’s call it the Boiling War.
With tension between superpowers at a new high following the Soviet Union’s detonation of an atomic bomb in 1949, the US government charged the RAND Corporation with thinking the unthinkable: how to avoid the mutually assured destruction inevitable in a nuclear exchange. In 1950, Merrill Flood and Melvin Dresher, a pair of mathematicians working at the American military think tank, came up with a theoretical game that perfectly illustrated the dilemma. The test mapped the effects of two sides either betraying or cooperating with one another. Each result, however, meant unappealing consequences for all participants.
A third mathematician, Albert Tucker, refined the concept later that year by giving it a more tangible if less apocalyptic form. In his permutation—still used in just about every cop show today—police have arrested two men but don’t have enough evidence to convict either. The law enforcement officials separate the two suspects and make the same offer: If one betrays the other and testifies against him, the snitch goes free while the other guy goes to the clink. If neither talks, both men get a month in jail. If both rat on each other, they each get several months. The police leave the men to stew. The Prisoner’s Dilemma, as it has come to be known, has been tested, debated, and fictionalized ad nauseam in various forms ever since.22 Even Batman got in on the action in The Dark Knight when the Joker offered separate boatloads of civilians and criminals the choice of blowing up each other. If neither acted, both would be vaporized. (Clearly the Joker had boned up on Cold War game theory.)
The essence of the dilemma is that participants must choose the outcome most beneficial to themselves. In the case of Tucker’s prisoners, the best choice seems to be to rat on the other guy and go free.
But unspoken and perhaps unknown repercussions apply to such a decision. What if the fellow suspect is a friend? What if he chooses to retaliate once he’s free? In the case of the Joker’s victims, it would have been easy for either boat to blow up the other, but their occupants would have had to live with those deaths on their respective consciences. That’s not an obvious choice for anyone, including—as the movie suggests—hardened criminals. They’re people too, gosh darn it.
Over time, betrayal has proven to be the optimal choice in theoretical tests of the Prisoner’s Dilemma, but psychologists and social scientists have found non-immediate repercussion factors to be quite strong, to the point where real-life test subjects choose to go for cooperation.23 When put to the test, people and the organizations they form are subconsciously far-sighted and tend to cooperate rather than betray one another.
The best proof we have of this fact is that the world is still here. We didn’t blow ourselves up in a nuclear Armageddon years ago. The Soviet or American governments could have nuked their sworn enemies off the map, but what would the fallout be?
In its 2011 report on world trade, the United Nations boldly proclaimed that “economic integration and interdependence in the world today have reached an unprecedented level,” a statement that comes as no surprise given the strong move toward globalization. Over a few centuries, our nature has shifted from zero-sum competition to win-win cooperation. Rather than competing exclusively for resources as in centuries past, the nations of the world are learning how to share those resources for the benefit of all. Countries are figuring out ways to trade their own surplus goods and services for what they need. People are no longer obstacles to an end, they are potential customers to whom products can be sold. Now, more than any other point in history, people are more valuable to each other alive than dead, which is the ultimate expression of cooperation conquering competition.
This is why people aren’t killing one another as much as they used to. The evening news might lead you to think otherwise, but it’s true. The size and scope of conflict-related death up until the middle of the twentieth century was astonishing. During this long chunk of human history, mass death was commonplace. Some fifty million people perished during the Muslim conquest of India in the first half of the second millennium AD. The Qing dynasty’s conquest of the Ming in the seventeenth century led to the deaths of twenty-five million. The nineteenth century Taiping Rebellion had twenty million. World War I saw thirty-seven million deaths, and World War II tops all human conflicts, with an estimated death toll falling somewhere between fifty and seventy-five million.24 Average those numbers out, and it’s like losing the entire population of Argentina in one fell swoop. These numbers are unfathomable today.
Some agitating observers suggest that a war between America and China—one of the emerging superpowers—is inevitable, but it’s improbable given how linked the economies of the two countries have become. Any conflict between the two that goes beyond the current cyber-espionage and possibly even sabotage would devastate both. The populace usually finds war abhorrent, and governments of developed or nearly developed countries generally come around to that way of thinking too, largely for economic reasons. The cooperative benevolence side of game theory is winning out.
The ongoing conflicts in which many advanced and developing countries find themselves today are often significantly different. The protracted conflicts in Afghanistan and Iraq both started as state-versus-state battles, but with quick official “victories” they evolved into what military types like to call “asymmetrical warfare,” more popularly known as insurgency or guerrilla warfare, depending on which side you’re on. Asymmetrical warfare has its benefits as well as disadvantages. On the plus side, it results in a lot less death. Estimates place the total number of military and civilian deaths in the first ten years of both the Iraq and Afghanistan conflicts at around 140,000.25 Any unnecessary death is one too many, but that’s a far cry from the jaw-dropping tolls racked up in similar wars only a century earlier. No conflict outside Africa has racked up more than a million casualties since the end of the Cold War.
The unfortunate downside of asymmetrical warfare is that it’s much more unpredictable, which means its definition can be expanded to include terrorism. In a traditional war, residents of participating countries sometimes have the option of fleeing. Guerrilla fighters, however, can and often do strike randomly, and terrorists generally go after defenseless targets such as civilians because attacking their real enemies would place them at a disadvantage. Innocents have no chance to escape such conflicts.
Even worse, terrorism—or what’s considered as such—has risen dramatically since the end of the Cold War, especially in the 2000s. Up to mid-2013, nearly a hundred terrorist attacks in which at least fifty people died had taken place in the new millennium. The largest of course happened on September 11, 2001, in New York City; Washington, DC; and Shanksville, Pennsylvania, resulting in the deaths of nearly three thousand people.26
But add up the death tolls from official conflicts and terrorist attacks, and the grand total still pales in pure numerical comparisons with human history. It’s tough to say whether people in developed countries are better off psychologically, though, because conflict and the death it brings are harder to see coming and therefore more stress-inducing.
The situation looks very different in the least developed countries, particularly in Africa and parts of the Middle East. According to Sweden’s Uppsala University Conflict Data Program, the number of worldwide conflicts has taken a sharp upturn since 2008 largely because of unrest in those regions. The Arab Spring uprisings in countries such as Tunisia and Egypt, as well as ongoing conflicts in places such as Yemen and Sudan, resulted in only one new peace agreement—signed in 2011, the lowest annual number since 1987.27
Fortunately, the total number of worldwide conflicts—thirty-seven in 2011—still fell far below the peak of fifty-three in the early 1990s. That trend is encouraging. For a good portion of the globe, the end of the Cold War caused many long-simmering international and intercultural tensions to devolve into open conflict. Once settled, increased economic prosperity, peace, and stability generally followed. It looks like the same is happening in several of the Arab Spring countries, where despotic governments have had to adopt reforms. Technology played a key role in those uprisings, where dissenters organized and reported a great deal of information via social media. Calling the Iranian protests in 2009 and 2010 the Twitter Revolution might be overstepping it, but the underlying point remains valid nevertheless.
It would be naïve to suggest that humanity is getting over conflict, despite some of the positive trends. But it’s also not wrong to point out that technology is driving increased harmony and peace between countries by accelerating economic development. The media often paints terrorism as a religiously or ethnically motivated phenomenon, but the majority of people who take part in it usually come from the lower rungs of the socioeconomic ladder. Rising social inequality could therefore lead to a short-term increase in terrorism, but reforms and improving prosperity in general point toward a more positive future. Leaders such as Osama bin Laden are or have been well heeled and ideologically driven, but the rank and file generally aren’t. As Charles Stith, former US ambassador to Tanzania, puts it: “People who have hope tend not to be inclined to strap one-hundred pounds of explosives on their bodies and go into a crowd and blow themselves up.”28
Undeveloped countries, terrorists, and so-called rogue nations such as North Korea therefore represent outliers that have yet to join the steadily improving global prosperity. The rest of the world has found cooperation more productive than fighting, an attitude that will spread to the outliers if and when they are ready, willing, and able.
ARE BACTERIA SMARTER THAN POLITICIANS?
Even the worst politicians understand the delicate balance they must maintain between enriching themselves and the populace, which means cooperation rather than betrayal also falls into their long-term interests. Some understand this better than others of course. Many critics believe that cronyism is reaching the same heights as during the Industrial Revolution, when robber barons shamelessly exploited workers while living high off their efforts under the enabling and tacit approval of politicians. If that’s true, the historical corrective forces discussed in the previous chapter are about to kick in. We’re headed either toward revolution or—more likely—wide-scale reforms that will vent some of this inequality pressure. The survival instinct, when pushed, tends to overrule all other instincts, including greed.
Stanford University sociologist Deborah Rogers believes this is likely because inequality doesn’t appear to be ingrained:
In a demographic simulation . . . we found that, rather than imparting advantages to the group, unequal access to resources is inherently destabilizing and greatly raises the chance of group extinction in stable environments . . . Although dominance hierarchies may have had their origins in primate social behavior, we human primates are not stuck with an evolutionarily determined, survival-of-the-fittest social structure. We cannot assume that because inequality exists, it is somehow beneficial. Equality—or inequality—is a cultural choice.29
Even humble bacteria understand that social consensus rather than biological imperative decides the Prisoner’s Dilemma. Chemists found in 2012 that microbes not only “chat” with each other and play a version of the game, but they also often tend toward cooperation rather than betrayal when making key decisions about their colonies. In this way, they pick the optimal choices for each member when it comes to issues such as cell stress, colony density, and the inclinations of neighboring cells. As head researcher José Onuchic puts it:
Bacteria that previously existed harmlessly on the skin, for instance, may exchange chemical signals and reach a consensus that their numbers are large enough to start an infection. Likewise, bacteria may decide to band together into communities called biofilms that make numerous chronic diseases difficult to treat—urinary tract infections, for instance, cystic fibrosis and endocarditis.30
Assuming that politicians in democratic countries are smarter than bacteria—not always a safe presumption—inequality looks as though it will reach a natural limit before self-correcting mechanisms inevitably take effect.
Despite periodic ebbs and flows of inequality, humanity’s economic future is rising. The Occupy movement expressed much of its anger at the 1 percent—households that earn more than $340,000 a year—but the 5 percent, or those with a combined income of $150,000, lies within reach for many families in developed countries. The protest movement claimed to represent the 99 percent, but that wasn’t entirely valid. Many people who earn less than $340,000 a year are doing okay in the grand scheme of things. Put another way, the amount of money that we spent on food two hundred years ago accounted for about 80 percent of our annual budget. Today, it’s only about 10 percent, meaning that our disposable income has grown dramatically.31 A good portion of what’s upsetting people actually has to do with the hedonic treadmill, where an individual’s happiness level fluctuates in accordance to what other people have, but we’ll discuss this in more depth in chapter nine.
Over the past thousand years, the world’s population has increased more than twenty-fold while per capita income has grown thirteen-fold. Since the early nineteenth century, however, that trend has reversed, with income growing eight-fold but population increasing only five-fold. Don’t take this incredible decrease in global poverty lightly. The world is treading a path toward greater economic equality even if some people are still “more equal” than others. As we’ve seen, one big problem is on the way to being solved, and another is replacing it. But put into perspective, this new issue isn’t as bad. Relative inequality isn’t as terrible as the objective misery, suffering, and death associated with real poverty. Our technologically driven economic growth is bringing hundreds of millions of people into a world where they can dream and plan for the future. That’s a great development.
It does, however, raise another potential problem. With all these people in developing countries finally getting a shot at having a future, isn’t the planet going to explode from overcrowding?