Limits to Global Affluence?

[TEVYE]
“Dear God, you made many, many poor people.
I realize, of course, that it’s no shame to be poor.
But it’s no great honor either!
So, what would have been so terrible if I had a small fortune?”

If I were a rich man,
Ya ha deedle deedle, bubba bubba deedle deedle dum.
All day long I’d biddy biddy bum.
If I were a wealthy man.
I wouldn’t have to work hard.
Ya ha deedle deedle, bubba bubba deedle deedle dum.
If I were a biddy biddy rich,
Yidle-diddle-didle-didle man.

I’d build a big tall house with rooms by the dozen,
Right in the middle of the town.
A fine tin roof with real wooden floors below.
There would be one long staircase just going up,
And one even longer coming down,
And one more leading nowhere, just for show.

https://youtu.be/RBHZFYpQ6nc

As I promised last week, we are looking for a saturation level for the affluence indicator in the IPAT formula: how rich do we want everybody to be? I am opening with two verses from musical Fiddler on a Roof’s song, “If I Were a Rich Man.”  The background of this musical is deeply anchored in 19th Century Jewish history in Eastern Europe.

In the song, Tevye, a hardworking Jewish peasant with five daughters, explores how his life would change if he were wealthy (In both the original Jewish folklore and the Hebrew version of the musical, the rich man is specifically named Rothschild. Tevye imagines that he could stop working so hard and would have a big house in the middle of town. He continues by stating that he’d show off his wealth. His wife would be the envy of all and the entire town would be forced to pay him their respect. He would have the time to sit in the synagogue and pray, reserving the best seat, and discussing with the learned men as an equal. In short, aside from granting him a comfortable place to live and the leisure of free time, the rest of his wealth would be for show. What, then, would happen if everyone else in his village, Anatevka, were just as rich as he was? What about the whole world? On a related note, how much money would it actually take to fulfill Tevye’s dream?

Let us take a quick look at the global situation:

Tables 1 and 2 show the essence of the 2014 global income distribution. Table 1 shows the GDP/Capita of the 10 most populous countries (which constitute about 60% of the global population). Table 2 shows the 10 richest countries (in terms of GDP/Capita). The richest countries are all relatively small. Let’s take Qatar as an example – out of the listed 2.3 million residents, only 278,000 are Qataris (12%); Indian and Nepalese people outnumber them heftily. Importantly, its GDP/Capita is usually calculated only from Qatari nationals. The data for tables 1 and 2 were taken from a variety of sources, including the Economist’s World Figures (which in itself culls data from the IMF, World Bank, CIA, and Eurostat, and others).

Table 1 – The 2014 GDP/Capita of the 10 most populous countries

Country Population (millions) GDP/Capita (US$)
China 1390 6,108
India 1270 1,647
United States 323 54,306
Indonesia 253 3,703
Brazil 202 11,705
Pakistan 185 1,114
Nigeria 178 2,548
Bangladesh 158 924
Russia 142 11,491
Japan 127 35,825

Table 2 – The 2014 GDP/Capita of the 10 richest countries

Country Population (millions) GDP/Capita (US$)
Monaco 0.03 187,650
Lichtenstein 0.037 157,040
Luxembourg 0.56 116,745
Norway 5.2 97,227
Qatar 2.27 96,732
Macau 0.57 96,038
Bermuda 0.07 89,795
Switzerland 8.14 85,397
Denmark 5.7 61,294
Australia 23.5 61,042

Figure 1 shows a recently compilation of photographs of the eight richest men in the world, based on data from Forbes, which many regard as the most accurate listing. Forbes also claims that their combined net worth exceeds that of the poorest half the world population.

's 8 richest menFigure 1 – The world’s 8 richest persons

Clockwise from top left: Bill Gates, Amancio Ortega Gaona, Warren E. Buffett, Carlos Slim Helú, Jeff Bezos, Mark Zuckerberg, Lawrence J. Ellison, Michael R. Bloomberg.

The Economist had an article on the same story; it agrees with the estimate that the eight men’s combined net worth is $426 billion but is somewhat skeptical about the relative worth of the poorest half of the world. This departure is mainly based on the fact that its estimate does not include negative net worth, which is mainly localized within the rich world. Using the data in Table 1 (which includes the richest large country: the US), the eight gentlemen hold “only” 1% of the cumulative wealth (measured by the product of the population by the GDP/capita), while the US alone holds wealth almost equivalent to the sum total of that of the other 9 countries.

Disregarding such “minor” disagreements, and neglecting for a moment the few billion dollar differences in these gentlemen’s net worth, each one of them is valued at roughly $53 billion.

Do we assume, then, that $53 billion per person is the sought-after saturation level of global affluence? If the answer is yes, what would you actually do with an equity that large? Tevye’s dream aside, you cannot use it for power or show if everybody else has a similar fortune. To use such wealth for necessities, no matter how elaborate, seems a bit excessive.

Well, let’s pretend that we are Tevye with some modifications – we are not seeking out wealth for ourselves but rather for everybody in the world: a global affluence saturation level. How much would you be asking for and what kind of world would we be living in? The long-term survival of our planet depends on your answers, so please be detailed and quantitative.

I will return to this issue after seeing some responses.

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About climatechangefork

Micha Tomkiewicz, Ph.D., is a professor of physics in the Department of Physics, Brooklyn College, the City University of New York. He is also a professor of physics and chemistry in the School for Graduate Studies of the City University of New York. In addition, he is the founding-director of the Environmental Studies Program at Brooklyn College as well as director of the Electrochemistry Institute at that same institution.
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6 Responses to Limits to Global Affluence?

  1. zhi says:

    As earth’s population increases steadily but ever since the 20th century, the population exploded and will be expected to reach 9.2 billion around the 21st century according to some experts, questions of sustainability rises and how our curtain BAU model affects earth. The increase in population will lead to a need in more living spaces, creation and expansion of urban cities, which will result in higher CO2 level on earth. As of today, our current population is about 7.2 billion and 1.36 billion are in China, which accounts for about 20% of the world’s population. China’s GPD annual growth rate is about 6.8% and has the highest CO2 emission in the world (27% dated in 2011), with our BAU model, the increase in global warming is inevitable especially with China’s environmental law/protection is miniscule.
    An increase in a country’s GPD means consumption of energy also increases which will results in a greater ecological footprint along the way. And using China as an example, which has the highest working class in the world, 770.4 million versus 146 million in the USA, and with that number expected to rise year over year with a correlation of increase spending, the CO2 level will continue to rise as well. However, to put that into perspective, the average chinese spending is only $7/day vs American of $97/day, and Chinese annual wage is around $8,655 in 2014 vs American of $50,000. So the question of a global affluence saturation level without harming our future generation is hard especially using China as an example in terms of it has the highest CO2 emission and largest working class in the world but average income is considerably less than the United States. However if the middle class continues to grow as expected along with an increase in their annual wage, we may see a greater impact on CO2 emission simply due to the fact that people are able to purchase automobiles and move into larger city homes with increase energy expenditure.
    To give a global affluence saturation level seems hard and deems to be a challenge, especially not everyone shares the same viewpoint in regards to the environment. Personally, I believe that if a person’s net worth far exceeds the average income of the population, like the world’s 8 richest people listed above, they have a moral obligation to make the world a better place for future generations. Maybe spend the money in renewable energy sources without leaving an ecological footprint if possible.

    Reference:
    https://www.bloomberg.com/news/articles/2016-03-09/here-s-what-china-s-middle-class-really-earn-and-spend
    https://www.theguardian.com/news/datablog/2011/jan/31/world-carbon-dioxide-emissions-country-data-co2
    http://www.tradingeconomics.com/china/gdp-per-capita

  2. Hadeel Alsayed says:

    we live in a developing world and year after year we see how the living in this world increases of price without make a balance, which is motivate people to thinking how to be a rich or play a challenging game of affluence which leads negatively of the society. and transform from society seeks to increase and improve production to consumer society who tend to buy and own property even though they don`t need it. we need to aware of advantages investment of wealth that turns good for individual and society.

  3. rafat shhadeh says:

    Humanity is developing such materialistic tendencies that it will be hard to ever control the urge for excessive wealth. I always believed that without content there will never be a “Utopian” society. As the wealth of countries increases so will the desire to accumulate, and unless a psychological/sociological shift occurs, humanity will be stuck in the same cycle.
    I believe that the statistics mentioned above about wealth distribution show that there is a fundamental error in humanity’s way of thinking, which I understand has always existed. The only way to change it is to heal humanity from a lot outdated mentalities. Education is key!!

  4. Tameika says:

    Before reading a few of the post, I wasn’t really informed much about what is going on in the world today. Besides what you hear on the news and see on social media a lot of the issues we have today aren’t really seen for what they are. I feel that no one is ever truly satisfied which is why the rich continue to get richer. Too much wealth can seem a bit excessive to just your average person. We work hard and long to make what we ourselves consider to be enough money to survive living paycheck to paycheck, so yes me may find it to be too much. In all honesty, all you need to survive is just the bare essentials which are food, water, and shelter anything more than that is unnecessary and deemed a luxury. I personally need enough to have a comfortable life for myself and my family, I can’t say surviving off of the bare necessities is all I need to “survive”. If everyone where to start seek out wealth for others and not just themselves the world maybe be a bit less selfish and people would have more compassion for others have a more understanding for people in different situations, or would it lead to more issues?Everyone has different problems, and different ways of solving problems.

  5. kamila says:

    i think that it should be balanced between poor and rich people on this earth, but even thought in our religion, it mentions that rich people should help poor people so this is the fact we cannot change for some reasons, but we can improve the life. now about the population , why do we look at the increasing population as problem? i think that there are some solutions for this problem is really terrible than the problem be itself one of these solution is genetically modified food which affect the health and the environment.

  6. Diana Peña says:

    I personally do not consider catastrophic anthropogenic climate change to be a massive problem. This topic has become a religion of sorts where anyone who questions it is deemed a heretic. Manhattan was predicted to be underwater by 2015 back in 2008, for crying out loud. Plenty of the predictions have been proven to be bogus.

    I think the real problem is poverty. There are people who are dying of disease, hunger, thirst, etc. They need reliable, affordable energy. That’s what fossil fuels provide. Environmentalists would rather people just stick to burning elephant shit rather than actually, heaven forbid, developing as people. Bill Gates makes a good point in saying that when people attain prosperity, they tend to have fewer kids, so I think the population issue will sort itself out. There is no evidence of population growth doing anything but tapering off eventually.

    Synthetic fertilizer, for instance, is a fossil fuel product, and it is responsible for a third of the world’s population remaining alive. Which third of the world has to die because you hate fossil fuels? We need reliable, affordable energy and petroleum products. Comparing fossil fuels to the Holocaust is idiotic. If anything, opposing fossil fuels is more akin to the Holocaust since a lot of people would die if we gave them up.

    Germany and Denmark tried using renewables, and their GHG (greenhouse gas) emissions went up, not down. They electrical prices also skyrocketed. It makes no sense to use tech that isn’t ready to provide out energy needs. Many people in this country cannot afford to triple their electric bills.

    I say that we should focus on human prosperity instead of a field of baseless predictions for chicken little environmentalists.

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