Inference- The cost of increased economy is happiness
As a kid growing up in small towns across India, the only dream I had was to become rich. However, with time I had realized that being wealthy is a relative term: some have billions while others have millions (and I am in neither group). Every person that I have spoken to always misses their childhood and talks about crazy stuff that they did. Everyone had a very simple upbringing compared to riches they have today. Standard of living for majority of the people has increased over a substantial period of time. People have access to the best of healthcare, technology and infrastructure. My parents keep reminding me and my sisters of how lucky we are to have such great facilities at our disposal and I am fully certain grandpa would have told the same thing to him. The wealth overall is increasing at an alarming pace which is good and ,may be, bad. The question is whether that has played any part in the happiness of an individual.
GDP stands for Gross Domestic Product , this is calculated for every country every year and reflects the economy of a country quantitively. The easiest definition of GDP would be the total value created through production of goods and services in a country during a period. GDP below is the sum total of all the countries who have reported to UN since 1970, the margin of the error is quite minimal and also I am using these total numbers just to provide a stark difference in growth of it compared with population.
Data from https://www.un.org/ as per this quantification we see there is such a big growth jump in GDP compared to population. Every year, there is a very high significant increase of GDP while population growth is having a mean value of only 15%. If we see the difference between these 48 years, the numbers are just mind boggling.
Let us see the numbers for a gap of 48 years between 1970 to 2018, this is simplistically so unreal, but it is very true, GDP has grown by (yeah you heard it right) 2407% while population risen by only 111%.
When usually product or service is out in market, generally we all think company is doing well, country is doing well, every one goes home with a good paycheck , but in reality that is not happening. If that was the case then as and when GDP as we see growing all the people should have definitely gotten richer, but that is not the case. I, for sure, have seen quiet a significant improvement in lifestyle/ standard of living if we compare an average Joe in 1970 vs. 2018; but Joe from 1970 has not become richer by 2407%.
There are caveats to this analysis: it has not been analyzed by country, some countries are becoming richer while others are contributing to the world population but not significantly to GDP. Nevertheless, if we see our world as one family, we will notice money growing per capita is at a higher rate than population.
Here’s a qualitative take at this:
- Poor people have risen out of poverty – This adds some % increase to GDP- basically because of high volume
- Middle class have become rich – adds significantly bigger chunk, because of education and white collared jobs more products being consumed and created. These people are majorly responsible who help in creating a new product or a service to aid the GDP increase.
- Rich have become super rich – thriving businesses who hire people who are educated/white collared. A significant number of this category of people who create a new product or a service to reach out to increase GDP. They enjoy a bigger chunk of the GDP as seen below.
- Super rich have become uber rich – Conglomerate of businesses. These are probably the top 5% in the world, they eat up the majority of the GDP growth. Their Enterprises are worth a price higher than some of the countries GDP. For instance if we say Bill gates net worth is 118 billion, he is probably much richer than some of the poorer countries whose GDP is 40-100 Billion USD.
- Special cases- Bill Gates, Jeff Bezos and Elon Musk are the kinds who jumped from middle class to Uber rich. This is just a special case of being in the rags to riches story. These folks have a high net worth alongside the power to tumble down everything and that can have a huge cascading effect.
The question we should be asking ourselves is, has this capitalist economy made us more competitive? More ambitious? Why do we keep pointing to stress at work? I do not remember my grandparents being stressed because of work, parents to an extent and can only imagine the next generation complaining that their parents never had time to even talk to them. That is a very concerning state but if we continue to grow numbers (GDP) at such alarming rates then most of us will be overworking, we will be stress-full because of that, and more ambitious! The question we ought to ask is does it make us happy? If yes, then probably it’s an addiction, because when this all ends, we will not take anything from this world.