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Soaring Wealth Inequality Sets The Stage For Soaring Opportunity

By News Creatives Authors , in Business , at October 3, 2021

Imagine if Jeff Bezos were a centibillionaire 150 years ago. Or even a billionaire. His life would have obviously been grand, but just as spending even a billion in today’s world is no simple feat, it would have been near impossible in the 1870s. What would you have purchased with $1 billion, let alone over $200 billion?

There were no cars to buy, no air conditioners, no home movie theaters to build, and realistically very little entertainment to purchase overall. No doubt there were castles to purchase the world over, but to what purpose? Since airplanes were many decades away, a jet-setting lifestyle wasn’t a realistic aspiration.

Since the provision of food occupied the days of most of the world, few had time to specialize outside of farming. To be clear here, most born in the 19th century knew what they would do when they grew up. Life was spent trying (often in vain) to produce enough food to survive.

Realistically the only intelligence that mattered in the 19th century was agricultural. Since work in many ways had a singular quality to it, intelligence outside farming wasn’t of much consequence. It was a cruel world.

Which brings to mind Bezos again. Just as there would have been no reasonable way for him to spend his billions 150 years ago, the more relevant truth is that Bezos’s intelligence would have had few commercial applications in 1870. Taking it closer to the present, it’s easy to make a case (as this column has) that Bezos’s intelligence would have meant quite a bit less in 1970 versus now. Since technology was so primitive 50 years ago, there really would have been no way for Bezos to bring to life his remarkable vision for meeting the needs of people the world over: Amazon

AMZN
. Bezos stands on the shoulders of rich, innovative, business giants of the past. And that’s not an insult. It’s just a statement of the obvious. And it’s a very happy one. Progress begets progress.

It’s something to think about amid all the relentlessly dour commentary about soaring inequality. Prasad Krishnamurthy, a law professor at Cal-Berkeley, published a column last week for The Hill in which he argued that “Today’s economic mobility numbers give us a glimpse into a possibly dystopian future, one with wide and permanent economic inequality, organized by class and race, in which a minority controls the resources of society to its benefit.”

In fairness to the professor, fears of inequality aren’t just a Left wing thing. On the Right, Charles Murray has expressed concern about a U.S. that’s “coming apart” as the well-educated and commercially accomplished marry those who mirror them on the way to the same separation that Krishnamurthy laments. Their worries are overdone.

Addressing Murray first, “birds of a feather flock together” is an old saying; one that likely predates Murray’s time on earth. Which is a way of saying that the so-called elite pairing off is as old as humanity is. Nothing new there.

As for Krishnamurthy, he misses the basic truth that rising wealth inequality is the surest sign of soaring opportunity. I’ve even written out a “Law” asserting the latter, and it’s conveniently named Tamny’s Law. It was featured in my 2018 book, The End of Work. It reads like this:

“Laziness decreases as prosperity increases, expanding the range of work options so that every person can do the work that most accentuates his individual talents.”

Informing Tamny’s Law is the happy truth that rising wealth inequality is most of the time a signal of shrinking lifestyle inequality. Put another way, great fortunes are generally a consequence of the mass production of necessities and former luxuries. Considering necessities like food alone, fortunes were made mass producing tractors and other farm innovations that freed millions around the world from the drudgery of food production as life. This is of crucial importance.

As more and more of life’s necessities and luxuries are being brought to market at lower and lower prices (enriching the producers of same in the process), the range of ways that individuals can make a living explodes. If anyone doubts this, they need only go on YouTube to find the myriad makeup artists earning serious income based on a unique ability to instruct their viewers on how to put on makeup each day. Or search for the real estate passionate who, often without real estate licenses, out-earn the licensed with their YouTube channels built around touring amazing houses and apartments, camera in hand. Perhaps most amazing for those of us who grew up with Atari, video gamers of today earn major money as do their coaches. Yes, videogame coach is now a profession.

It’s all a way of pointing out that Krishnamurthy and Murray’s fears about the future presume that the present will resemble that future. Except that it won’t. Just as commercial activity isn’t static (how many of us know farmers today?), neither is intelligence static. That neither are rigid is a direct consequence of the inequality that has the two worried. As production of luxuries and necessities soars thanks to the unequal growing rich through mass production, more and more of us are freed to showcase our unique intelligence in an increasingly specialized marketplace. Since survival and rising living standards are a given, we’re freed to do what we do best.

Which calls for optimism. Commercial advances are set to redefine intelligence by freeing millions from the work of the past. Agricultural intelligence mattered in 1870, but doesn’t much today when technological intelligence seems to be of greatest importance. Rest assured that lightly regarded (or unknown) skills will muscularly inform the commerce of tomorrow.

In short, the kinds of individuals set to eclipse the economic achievements of Bezos in 2070 and beyond are very likely not seen as intelligent today. The future is bright for all manner of people for whom the present is bleak. Thank inequality for this beautiful future.

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