the world gaining 400 billionaires last year would have set off an economic boom
given everyone raises
and lowered our prices
That doesn’t logically follow. Economic growth goes hand-in-hand with price inflation, as increases in spending power run up against natural resource and labor constraints. Once you’ve picked over the low-hanging fruit, the cost of the next unit will rise.
What we’re seeing in Western Nations is a global rebalancing of wealth that’s coming at the expense of our own elevated position. And while we’re seeing that rebalancing, we’re watching a handful of insulated elites continue to enjoy higher-than-expected quality of life that we assumed we were going to be entitled towards.
But if you’re living in the Global South? Particularly in the BRIICS states? You’re finally getting to enjoy the fruits of industrialization, centuries after it began. As the US hegemony breaks down and we move back to a multi-polar world, the resource rich states are seeing a windfall not enjoyed since the end of the 2nd World War.
And, as a consequence, the US has scrambled to claw those gains back, either through direct military intervention (Iran, China, the East African states) or through espionage and domestic regime change (Latin America, the Philippines, Eastern Europe).
Our fumbling grasp at a retreating position as global hegemon is destroying the supply chains that made the globe wealthier. And that’s adding pressure to prices, both domestically and globally, even as its inflating wages and spurring growth.
So it’s a much bigger story than the simple Reaganite math of “Trickle Down Make Big Number Go Up”. We’re transitioning to a new global economic model of more egalitarian wealth and uniform industrialization. But we’re making the transition in one of the worst ways possible - through war, through ethnic cleansing, and through degradation of legal trade and travel.
This is a very simplistic way of looking at personal income, as it doesn’t consider the value of money. You really want to look at PPP (Purchasing Price Parity).
Consider, for instance, the impact that a high rate of inflation has on income and wealth. If you’re living in Chile right now, with an 11% inflation rate, and your income scales with that inflation rate, then you can become a billionaire in 67 years. But, of course, that means costs are exploding as well. So that billion dollars doesn’t feel like a billion dollars 67 years later.
Now consider that we’ve seen the US Stock Market doing an average 14% return over the last 10 years. So that $500k of recurring principle gets you to billionaire status in a mere 58 years. Some of these billionaires are getting ROI at much higher than 14%, thanks to their access to low-interest loans, government contracts, and below-market capital.
What has the US economy actually added over the last decade? What justifies the numerical growth in value? The dirty truth is that “billionaires” are just folks who got to ride the exploding price wave.
It isn’t a question of contribution but of access to large pools of credit, interest accruing materials, and high return labor. What we have is a new kind of socio-economic enclosure, by which a select few people gain special privileges through social networking. Getting that explosive rate of return on a relatively meager upfront investment propels you into the billionaire class in a short amount of time.
But to get that access, you need social connections. Which is why folks like Sam Bankman-Fried and Elizabeth Holmes and Elon Musk and Mark Zuckerberg could catapult themselves into the billionaire class while you’re still sitting around with your genitals in your hands.
Billionaire is an entirely relative measure. What you can buy with a billion dollars is diminishing at the rate that new billionaires are minted. FFS, you can’t even buy a basketball franchise for a billion dollars anymore.