Mani Masood
Read a page on Economist magazine or read about GDP of the world and you would incorrectly start to believe that the world has really gotten richer over the past 100 years.
The world is poor and getting poorer by the hour.
The collective GDP of the planet increased from a recorded $1.32 trillion in 1960 to a high of $61.38 trillion in 2008, before the financial and economic crisis, an increase of approximately 40 folds.
To simplify this means that you and I, and everyone else for that matter, is at least 40 times richer as compared to our grandparents.
I think this is not true – the disparity in the wealth distribution has increased substantially.
Today if you make $47,500 per year you represent the top 1% (roughly 60 million people) of the planet. If you earn $250,000 per year you are part of an elite minority (107,000 people) and represent the top 0.001% of the world.
Mind you that we are taking about earnings, income and GDP and not assets or accumulated wealth.
So 107,000 people on one side and the remaining of the 7 Billion on the other.
How long can this disparity survive before the global melt down? No one is sure of this, my guess – it is the time it takes for the 7 billion people (less the 1% 60 million or so who make $47,500) that they have been taken on for a ride by the 1%.
Lastly, I am not in complete agreement with the capitalistic-consumption based wealth formula. That in order to be rich you must consume and consume more every year – that may be the “western” approach of things. The eastern (sino and desi) is quite the opposite – saving something makes you rich.
One other way to look at “the world is poor and getting poorer” theory is from an annual consumption of $1.32 trillion per year in the 1960s we now consume close to $60 trillion today, hence the planet is becoming poorer by $60 trillion every year.
What happens when these precious resources run out. Well the 7 billion are going to eat the 107,000 and then each other.
Data Source: IMF, World Bank, and Wikipedia
MMasood
