I was reminded of something today that most Americans don’t think about on a regular basis. They may not even realize the extent of their situation. Americans are rich compared to the rest of world, on average.
The gap has certainly narrowed, particularly in the last few decades. There are some small countries such as Hong Kong and Singapore that have a richer population on a per capita basis. There are several countries such as New Zealand, Australia, Canada, England, and Japan that have comparable wealth to Americans, although still not as much on average. China and India have come a long way in the last 30 or so years. China has come further than India. But both countries still have an overall population that is really poor by American standards.
What percentage of the world’s population has $1,000 to spend (in terms of purchasing power of the U.S. dollar)? Some Americans don’t even have $1,000 to their name, although most could probably come up with $1,000 if they had to. But the majority of the world’s population does not have $1,000 at their disposal. Someone in a third-world country could be offered the opportunity of a lifetime in another part of the world, but if the package didn’t include airfare, they wouldn’t be able to take advantage of it.
I believe there are going to be some really rough times ahead for Americans. It will be rougher than the last 5 years. It is almost inevitable at this point, barring some technological miracle. There are hundreds of trillions of dollars of unfunded liabilities. There is massive government debt. There has been huge monetary inflation by the Fed, causing major malinvestment that has to be shaken out.
But while I think tough times ahead are inevitable, things are not hopeless. Beyond the deterioration of the empire and welfare state, there is a lot to look forward to. I don’t know if this will be in 5 years, 10 years, 20 years, or more.
When things come crashing down, American wealth will still exist. All of the houses, roads, cars, computers, furniture, skyscrapers, etc. will still exist. Technology will still exist and continue to get better. Production techniques will not go away and will probably keep getting better. We won’t be going back to growing our own food, unless you choose to do so for personal reasons. We won’t be going back to the horse and buggy.
I think this is important to remember. For libertarians who have a good understanding of the economy, it is easy to get depressed knowing how bad things may be and knowing how much better things could be. But as libertarians, we should also realize the incredible power of free thinking individuals. We should realize the massive division of labor that we have today and the incredible technology we have to share information.
In conclusion, I think there is reason to be pessimistic in the short term. But in the long run, we will likely see brighter times. Americans are still really wealthy in comparison to most of the rest of the world and in comparison to almost everyone in history. If we go backwards, I don’t think it will be for long.