Vail Daily column: Give thanks every day
November 27, 2014
There's a lot of us now. It used to be in the 6 billion range — in fact, I know that when I was born, there were fewer than 5 billion of us on this planet. Now there are 7.3 billion, with an estimated 3 billion more coming in the next 40 years.
Now, hold on a second before you stop reading. This isn't one of those columns in which I start harping on over-population. I'm not going to start flailing away at the effect we might have on the climate as we grow. I can't bother myself with wondering about wars, famines, pestilences, caused by, you guessed it, humanity. You can read about all those subjects elsewhere.
Forget it. I'm not interested in worrying about the big picture problems that may in fact end our existence as a race. I'm a banker — do you need a loan? I'm really good with loans — less so with saving humanity. We can't control what happens in the macro economy anyway, right? I'm washing my hands of it. It's useless.
OK, fine. Let's play with it for a second. Maybe there's a solution out there.
All of macroeconomic effect is derived from microeconomic action. In plain speech, what happens in the economy of the world can be traced back, theoretically, to the action of each individual operating within any given economy. The divergence of nations economically is based on the individual operators of the system.
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Partially for this reason, many economists find capitalist theory highly attractive. There's a belief that through the individual incentives within a capitalist system, that the macro economy could grow indefinitely through specialization. Ayn Rand and Adam Smith both claimed that when people work through their own rational self-interest, the economy grows as a whole through competitive means. Is it true? Yes — sort of.
There are two reasons why capitalism could potentially fail in the long-term, and yes, I'm trying to get back to those big-picture problems aforementioned.
Reason 1: Instead of allowing an economy to be decided based on the free-market decisions of the individual, governments place boundaries, taxes and generally muck things up with issues of sovereignty and national interest. The result is an inefficient system that eventually causes the population, either within the losing or winning countries, to change the government. "The peasants are revolting. … You said it."
Reason 2: The world runs out of economic free space. We tear through all our margins of production and our storehouses, and a failure of innovation to keep pace with the increasing demands of our planet eventually causes a complete breakdown in the system.
So, I don't have control of the government — yet — and I'm not independently smart enough to invent something that will change the economic capacity of the world — at least, I don't have any ideas right at this moment. What to do, what to do …
I suppose, with Thanksgiving approaching, I do have one small idea. Maybe we can turn this thing around before we get into the red.
The median income of the United States is in the $50,000 a year range. What is your reaction to that number? Does it sound low? Does it sound like a dream to make $50,000 a year? We are actually in the top three or four countries in the world in regard to wealth.
In addition, though it may sound negative, our national GDP per capita has increased by over 60 percent since 1980, with roughly a 15 percent increase in that same period to the national median income. That's a huge increase in efficiency. Technology and innovation — as American as apple pie (except that apple pie is actually likely of Spanish or German origin). The average American has roughly just over $36,000 of disposable income a year. In Poland, try under $12,000. Using Poland as a comparison was gentle, by the way.
There are over 320 million living in the country now. Take that from the 7.3 billion in the world, it means that you represent one member of only 4 percent of the population of the whole planet. In fact, to make you feel even worse, the top 10 percent of the wealthiest of the world control somewhere in the range of 85 percent of the total global wealth. Yes — you are likely part of that statistic if you are reading this paper.
With that perspective, I think it's time to propose a possible solution. In chaos theory there is a principle called the "butterfly effect." Though it sounds like something out of a science fiction movie, and often is, the basic premise is that a small action at the point of origin can create drastic unexpected changes in long term results — i.e., the complete destruction or salvation of the human race.
It goes back to our discussion on microeconomics earlier — what each individual does within an economy can alter the direction of the economy as a whole. Public sentiment is a label that we put on a large group of people that happen to all have an opinion that might lean in a similar direction — but that opinion is formed by every individual, one at a time, heart to heart.
So — what is that small action at the point of origin that must occur for us to save ourselves? How can we ensure that the butterfly effect works in our favor? What can you do today to save the human race, and become one of the celebrated individuals that turned the course of the world for the better?
To whom much is given, much is required.
Time to give thanks — not just once a year but every day. Time to use your resources, your freedom of economic choice, to save the world. Time to forgive old enemies and make new friends. Time to rebuild your burned bridges, both economically and emotionally. Time to be just — to stand for something. Time to wield your economic weapons in defense of the less fortunate, and not to wage war in your heart against your fellow men but to end war in your heart. Make the choice — others, including me, stand with you.
Ben Gochberg is a commercial lender and business finance consultant. He plays, lives, works and is trying to do a little good in Eagle County. He can be reached for business inquiries or free consultation at 970-471-3546.
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