We still expect too little
Wealth inequality is the most important problem to solve
It’s 2007 and Tim Ferris’ The 4 Hour Work Week is permeating the zeitgeist. We too think: how can I practice lifestyle design to become the “New Rich”1. It is seductively tantalizing — abandonment of the traditional deferred-life plan spending 40 - 50 years before retirement. Using leverage, time and mobility to enjoy the currency of the present.
The concepts and fresh take affected me. It still does.
A few years prior to Tim’s take, I was influenced by Bertrand Russell’s 1932 essay In Praise of Idleness. Both challenge the glorification of long labor hours as a measure of worth and success. They both advocate for more leisure and its fundamental value. And they both understood, in their respective era, the need for technology to reduce the burden of work. Ferris: outsourced “assistants” found on fiverr.com or craigslist. Russell: talked about capital efficient machines to produce pins.
Your success will vary but the practical approach offered by Ferris is straight and to the point. Russell advocates for broad sweeping societal change.
It’s no wonder Tim produced a best seller.
The unlock in both? Wealth and passive income. Somehow individually accrued or alternatively more equitably distributed.
Fast forward. It’s 2024. Sam Altman is soliciting the concept2 of Universal Basic Compute in a GPT-centric world. The promise has already been made partially good: ChatGPT 4 is free for the 94.6% of Americans with internet access. And a smart phone. A small entry fee, if you can afford it, to perform godlike tasks3.
You participate in a society by your existence. Then participate in its life through your actions— all of your actions. — IX.23
What feels like ages ago I studied Economics during undergrad. It wasn’t a lottery ticket to a job in banking. But I did come to deeply appreciate the concept of Economic Justice. Here, a sample, of it’s central questions.
Is it necessarily unfair when some work less or consume more than others?
Do those with more productive property deserve to work less or consume more?
By what logic are some unequal outcomes fair and others not?
To illustrate the main point of this meditation, lets parrot Robin Hahnel’s simple corn model4 of the economy.
Imagine an economy consisting of 1000 members
Corn is the only good produced and everyone, who is equally skilled, must consume it at the rate of 1 unit per week
Corn is produced in two ways and productive at any scale:
Labor intensive: 6 days of labors + 0 units of seed corn = 1 unit of corn
Capital intensive: 1 day of labor + 1 unit of seed corn = 2 units of corn
After consuming their 1 unit of corn a week, people care about leisure — or working as few days as possible
Finally, if people have the chance to accumulate more corn, they will do so
This overtly simple economic model provides easy definitions. First, it’s efficiency is the average number of days worked to produce a unit of net corn. Second, inequality is the difference between the maximum and minimum number of days anyone works.
The point: No one would use the labor intensive technique to produce corn if they could use the capital technique instead.
But of course you first need access to seed corn.
The most important problem to solve
I read Andreessen’s Techno-Optimist Manifesto last year. It’s all in. On unrestrained growth, accelerationism and the pursuit of material abundance. He says:
We believe technological progress therefore leads to material abundance for everyone.
We believe the ultimate payoff from technological abundance can be a massive expansion in what Julian Simon called “the ultimate resource” – people.
We believe, as Simon did, that people are the ultimate resource – with more people come more creativity, more new ideas, and more technological progress.
We believe material abundance therefore ultimately means more people – a lot more people – which in turn leads to more abundance.
We’ve had relatively abundance for a while and living standards, on average, have risen.
But wealth inequality hasn’t improved. Mark doesn’t mention distribution. A simple chart without editorial is all you need.
You and I know the current and potential impact of this growing gap without end. A destabilized society, social upheaval, political revolution. Why? We’ve seen it before and history is our teacher. To name a few:
The downfall of the late Roman Republic
The french revolution in 1789
Pre-revolution Russia in 1917
Zimbabwe in the early 2000s
Venezuela since the late 2000s
Unchecked wealth inequality is the enemy of the American Dream. The belief in upward mobility and our national ethos.
Final thoughts
Scott Galloway’s talk a month ago was stirring. If you haven’t watched it, I suggest you do5. He posits a simple question: Do we love our children? He lays out a number of solutions. Many seem reasonable.
I certainly don’t have all the answers. But with certainty: we still expect too little.
Of our institutions, our government, technology and ourselves.
We have to start asking more questions.
Especially if we ascribe to a vision for a better society.
One where our abundance could be more broadly distributed.
Here on Twitter/X. A more detailed teardown here.
This is from The ABCs of Political Economy. We’ll explore and digest different situations and rules affecting different outcomes in future meditations.
You can also read it, here: https://www.profgalloway.com/war-on-the-young/