“wealth”
22 posts under this tag.
Finally! I’m in San Francisco, for at least two weeks, in what should be my beachhead for a longterm stay!
No offense to the big apple, but San Francisco is just so much better. If New York is Mexico City, San Francisco is Guadalajara: prettier, classier, cleaner, ampler, prettier peopled…
I’m amazed by the huge number of Asians everywhere (Asian women never fail to transfix me…), by the opulence and beauty of the city, by the overwhelming wealth and retail saturation of America (one forgets it so easily in the 3rd world), by the beggars, by my cool hostel, by how it has rained all day long, by how the swankest part of town (Union Square) can be right next to the seediest one (Tenderloin), by how stereotypically rural Mexican where most of my flightmates (rarely does one get to see so many cowboy hats, boots, and rebozos), by how happy I am…
What structure would you give to Mexico’s 2006 GDP, the wealth it generated in a year? Just gather your prejudices, take a guess, and try to put it into numbers.
Mexico’s 2006 GDP Structure
The growing disposition to tax more and more heavily large estates left at death is a cheering indication of the growth of a salutary change in public opinion. The State of Pennsylvania now takes—subject to some exceptions—one-tenth of the property left by its citizens. The budget presented in the British Parliament the other day proposes to increase the death-duties; and, most significant of all, the new tax is to be a graduated one. Of all forms of taxation, this seems the wisest. Men who continue hoarding great sums all their lives, the proper use of which for – public ends would work good to the community, should be made to feel that the community, in the form of the state, cannot thus be deprived of its proper share. By taxing estates heavily at death the state marks its condemnation of the selfish millionaire’s unworthy life.
Ugh. I actually hope to use any wealth I happen to make to help the causes I believe in and we even coincide in some of those causes, but I recoil from the reasoning that led Andrew CarnegieWP to philanthropy. A reasoning he most famously presented in his Gospel of Wealth, quoted above.
In what could charitably be attributed to a deep generational chasm (he did wrote more than 100 years ago), he’s insufferably unctuous, enlisting at every opportunity the “wise men,” “the thoughtful man,” “most of those who think,” “the best and most enlightened public sentiment,” and a further, seemingly endless cohort to his aid, substituting them for argument.
He frequently employs a fatalism I’ve always found devious, the fatalism that makes some limp effort to justify the status quo only to conclude with the friendly provision that it is all inevitable anyway.
But most depressingly, he makes scant sense and obscures rather than illuminate. Speaking in pompous, hyperbolic generalities, he never goes around to explaining just why wealth accumulation is increasing—he only talks vaguely about assembling “thousands of operatives in the factory, in the mine, and in the counting-house,” as if wealth creation were a matter of mere herding. He uses dubious anecdotal evidence —a “most worthy” man’s impromptu giving of a quarter is interpreted as “probably one of the most selfish and very worst actions of his life”— and rather idiotic “insights” into the mind of men —at one point he actually claims the rich would take in stride being confiscated, happy to brag about how much they’d been deprived of.
He seems to believe that rich men acquire their wealth by doing something extraordinarily good, necessary, and rare. Yet, he entitles them to no right to what they’ve earned. They should “provide moderately for the legitimate wants of those dependent upon him” and consider the leftovers society’s trust fund, theirs only lent to administer for the good of all.
It’s not all bad, I actually sympathize, from a distance, with his Randian views on charity and property, and I also agree with his Hayekian wish for evolutionary rather than revolutionary changes. Still, the essay is unusually abysmal. If this is the best tract we have arguing for private philanthropy no wonder there’s so little.
And enjoy it you should. If you’re not a thief or a politician you earned it, which, being clear about it, is just a handy way of saying that you did stuff that Other People voluntarily value enough that Apple is willing to exchange an iPhone for your stuff (confident that it can then exchange it with Other People for what it itself really wants). The iPhone is yours and yours alone to enjoy. You earned it. You owe nothing to anyone—not, particularly, guilt.
What is more, both you and Apple, by freely exchanging only for how much each could get from each other, are subtly but importantly cementing the worldwide enterprise that has made it possible for the output of 4 Hindu villagers to seem tiny by comparison.
I’m most definitely an idiot in at least Cortazar’s sense—always able to enthuse about anything and everything. Sometimes the excitement loop becomes critical and, a happygasm reached, I need simply contemplate the object of my devotions to reach instantaneous paroxysmal contentment. There are many examples of such cases in this blog (at its best moments it is merely a compilation of them) and here are the 3 most recent:
1. This glass. Seriously. It’s thick and stocky, heavy and curvy, velvety (in that strange way good glass can be) and transparent. Plus, it has an extremely low center of gravity (thanks to its glassy booty) that gives ponderous gravitas to the gassiest soda. I won’t drink in anything else. That all this heavenly goodness was less than a buck a piece (we’ve eight of’em) only adds to my marvel—a fragile monument to capitalism and division of labor. The photo makes absolutely no justice to its glistening beauty.
2. Mac OSX Tiger’s Wallpaper. The asymmetry, the restraint in means, the abstract yet natural forms—sometimes petals sometimes hyperbolas; sometimes tears in the canvas, sometimes valleys, sometimes hills—with their rolling, blue gradients, their digital, velvety textures; the tridimensional light play of twodimensional curves—a perfect background, ideally fitted to highlight whatever is atop it, to be discrete, serene and becoming, never flashy, never tiring. Because make no mistake, this is a designELZR, it has a purpose: to be a desktop wallpaper. And it easily trumps the cloy BlissWP, the over-eager photos, the dull colors, the duller patterns (ugh). As far am I concerned it is the best graphic design of the late twentieth century.
3. This quote. Such words. Some four centuries old and still as haunting.
No man is an island, entire of itself; every man is a piece of the continent, a part of the main. If a clod be washed away by the sea, Europe is the less, as well as if a promontory were, as well as if a manor of thy friend’s or of thine own were. Any man’s death diminishes me, because I am involved in mankind; and therefore never send to know for whom the bell tolls; it tolls for thee.
John Donne WP, “Meditation XVII” of Devotions Upon Emergent Occasions
.., one of the world’s largest and most influential private-equityWP firms, is planning an IPO of a minority stake, “perhaps 10%.” Appraisals of the company’s total value range “from $20 billion to double that.”
It has some 750 employees.
Talk about leverage.
Maybe the insolent goal is possible after all.
The other day dad told me he considered Mexico’s relative economic self-sufficiency—that if we had to, we could, more or less, feed ourselves and scrape some living with only our national resources—one of our greatest strengths. I didn’t buy it. At all. Self-sufficiency seems to me a much overrated, much idealized kind of economic independence.
I’m not self-sufficient, neither is my father, and I’m willing to bet that if you’re reading this, neither are you. Neither is anyone that lives in a city. The only truly self-sufficient people left in Mexico (and in the world)—indians who mostly grow and tend their own food, weave their clothing, and build their huts—live in what we call extreme poverty. Not all poor people are self-sufficient but all self-sufficient people are poor. The more self-sufficient the poorer. The more self-sufficient the more bounded to their own meager abilities, to their own fragile circumstances, to the weather (now when’s the last time you worried about it?).
“Rather than its opposite, competition is cooperation’s complement.”
We, the codependent, have made a different bargain with the world. We betted on specialization and cooperation, and I stand by that decision. It has given us far more wealth and independence than our forebears dreamt of. I don’t think you wake up at night scared of how much the butcher has over you because the only thing you know how to do is sing. Modern cooperation is breathtaking, isn’t it? This MacBook from which I write you, this computer in which you’re reading me—they required the work and talent of thousands of people around the globe.
All this begs the question: Why? What ties these invisible threads of people around the world into building the things you need? Why don’t you fear your butcher will extort you? Why are we all so reckless as to depend on each other for our very sustenance? The answer is trade and competition. Trade is simply the name we’ve given to peaceful cooperation and is the fiber that binds the world. On the other hand, competition, as much as it’s been demonized, is simply the prerequisite of cooperation—rather than being cooperation’s opposite, it is its complement. You don’t fear your butcher because you can always go to another one (or become one!)—it’s as simple as that. Cooperation without competition is indeed the fragile, vulnerable dependence most people rightly fear. Cooperation and competition—free trade, that is—is the resilient, magic codependence to which we owe our wealth and our freedom. (Think about it the next time you hear of a trade barrier of any kind, realize how it ultimately makes you more dependent, more subject to the whims of the special interests pandered.)
So no, I don’t think our relative national self-sufficiency is anything to be particularly proud of. It’s a blessing that we live in such a fertile, bountiful land. If we turn it into an excuse for isolation it’ll be our curse.
Here 2 examples—a graph and a paragraph—from a typical article (about the paper industry’s dire prospects, of all things) in this week’s edition of The Economist.
Restructuring in the paper industry is proceeding at a furious pace. The first thing some paper companies have jettisoned is ownership of forests. International Paper (IP), one of the world’s biggest pulp-and-paper companies which is based in Tennessee, used to be the largest private landowner in America. A year ago the company sold 5.7m acres, or 90%, of its forestland—an area larger than Massachusetts. The $6.6 billion sale was “probably the hardest decision that I’ve had to make since I became CEO,” says John Faraci, IP’s boss since 2003. Most buyers were financial investors, but 5% of the land went to conservation groups.
Starting with the graph: it’s a 16-year window to worldwide newsprint production that drives home the article’s main point with eloquence: North America’s newsprint production (a fifth, you will notice, of the world’s; used to be a fourth) is slowly but decisively dwindling; production in the rest of the world, on the other hand, is increasing, albeit not in a hurry.
It’s full of conventions too, but they’re so well thought that you never need to be consciously aware of them as a reader: Take the upper-left red patch, a gentle way to guide your eyes to the graph’s title and instructions. The source always goes at the bottom, smaller-typed, and the y-axis is always labeled at the right, which I find more natural than the common left convention (it makes you look at the graph first, notice its pattern). The x-axis is usually the time axis, its gridlines usually obviated for clarity’s sake, and its labels, usually years, presented in a simple format that marks millennia only when needed. And graphs are always in this blue scheme—a convention to avoid color misinformation that still allows for meaningful distinctions between color shades: darker blue for the main variable under discussion, the foreground; lighter, fading blue(s) for the background variable(s).
As for the paragraph, it’s brimming with fascinating facts about the world. Did you know who the world’ biggest pulp-an-paper company was and that it was located in Tennessee (WP)—of all places? Did you know it also happened to be the largest private landowner in America? (A paper company! The largest private landowner in America!) Did you know it recently sold, because of restructuring, 90% of its forestland, 5.7m acres—an area larger than Massachusetts? Did you know it sold them for $6.6 billions? (Surprisingly cheap, considering it’s an area big enough for many a country.) Did you know most buyers were financial investors but 5% were conservation groups? (A wonderful example of how trade allocates resources, peacefully and quietly, to those who care about them.) Now you know.
After an afternoon of sumptuous, unrestrained culinary indulgence, bursting at the seams, a friend of Ureña, one of dad’s best friends, liked to say, in fantastically black humor: ”Ojala hubiera muerto de niño—para no sufrir tanto.” (“I wish I’d died a child—to save myself from so much suffering.”)
”Trabajo que no da para levantarse a las 11[AM], no es trabajo.” (“A job that doesn’t pay enough for sleeping after noon is no job.”) Used to say another, rather too fond of the good life, friend of Dad’s.
People usually said goodbye to my grandgrandmother Aurora—who is now just over a hundred—with a formulaic, yet earnest, “Take care!” To which she promptly responded, ”You take care! I’m over ninety years old, what I want to do now is die!”
”Que puedes esperar Parra,” (“What can you expect Parra”) used to say Ureña jokingly to my father, ”yo me crie con tortillas de sal y chile. Yo no comi pescado, ni leche, ni jamon.” (“I was raised on tortillas with salt and chile. I didn’t get to eat fish, nor milk, nor ham.”)
I remember being completely, utterly floored when reading in Henry Hazlitt’s Economics in One Lesson about how, at bottom, supply and demand are one and the same.
Those who think that the destruction of war increases total “demand” forget that demand and supply are merely two sides of the same coin. They are the same thing looked at from different directions. Supply creates demand because at bottom it is demand. The supply of the thing they make is all that people have, in fact, to offer in exchange for the things they want. In this sense the farmers’ supply of wheat constitutes their demand for automobiles and other goods. All this is inherent in the modern division of labor and in an exchange economy.
This fundamental fact, it is true, is obscured for most people (including some reputedly brilliant economists) through such complications as wage payments and the indirect form in which virtually all modern exchanges are made through the medium of money. John Stuart Mill and other classical writers, though they sometimes failed to take sufficient account of the complex consequences resulting from the use of money, at least saw through “the monetary veil” to the underlying realities. To that extent they were in advance of many of their present-day critics, who are befuddled by money rather than instructed by it. Mere inflation—that is, the mere issuance of more money, with the consequence of higher wages and prices—may look like the creation of more demand. But in terms of the actual production and exchange of real things it is not.
Yes, it was obvious. Ridiculously obvious. But I had never realized it. A whole semester of economics in high school plotting gratuitous graphs and fondling equations for what? They should have put this in big, bold black letters at the very first class and let us go afterwards. My twenty something dollars per hour would have been far better employed.
But yesterday I stumbled on Wikipedia’s trade pedia and realized, mind blown, I had only scratched the surface of it. It only took the first, luminous paragraph. (Its scary how good Wikipedia is becoming.)
Trade is the voluntary exchange of goods, services, or both. Trade is also called commerce. A mechanism that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and services. Modern traders instead generally negotiate through a medium of exchange, such as money. As a result, buying can be separated from selling, or earning. The invention of money (and later credit, paper money and non-physical money) greatly simplified and promoted trade. Trade between two traders is called bilateral trade, while trade between more than two traders is called multilateral trade.
Buying and selling are concepts that only acquire meaning when we bring in money. At its essence, trade (barter), is fundamentally reciprocal—providing no ready way to distinguish between its participants.
So simple and yet so deeply buried by mindlessness. Don’t forget it and watch countless everyday fallacies come tumbling down, naked.
(Notice also the definition of market: “a mechanism that allows trade”—a mechanism that allows for voluntary exchange. There’s untold beauty and nobleness in free trade.)
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