Consumerism and inequality

There are a number of fundamental reasons why inequality is such a natural effect in our consumerist society.

  • Inflationary monetary policy and artificially low interest rates keep the poor and the middle class from saving and investing
  • Our systems allow people to get ridiculously rich from speculation and debt leveraging; completely legal mechanisms by which they transfer wealth from the middle class to themselves
  • When government monetizes debt or disburses stimulus packages, our fiat money system creates an inflationary wealth transfer from the middle class to the well-connected elite
  • Elite special interest groups often have a big influence in government affairs through which they receive bailouts, protection and special privileges

These points might be a bit technical and actually require many pages to outline fully (as is illustrated in the page series on our exchange economy). In general though, all you need tho know is that our current systems, by their very nature, will make the rich richer and the poor poorer.

The natural result is a global wealth distribution such as the one shown below.

Just take a look at these numbers: the top 0.5% of the world control 38.5% of the wealth, while the bottom 67.6% control only 3.3%. In other words, on average per capita, the top 0.5% are 1600 times richer than the bottom 67.6%.

In the meantime, as shown below, the consumerist mindset created by our current systems has totally destroyed wealth accumulation among the middle class, further widening the wealth gap.

Sadly, despite all the economic pain we are currently experiencing, people are still sticking to the status quo of more debt and more spending. In effect, we are continuously jeopardizing our long term future for some temporary short term gains. This cannot end well…


Filed under: Introduction

8 thoughts on “Consumerism and inequality”

    1. Thank you 🙂 Yes, these are some serious issues with no clear resolutions other than radical things like remodeling our entire economic and monetary systems. It will therefore probably not be resolved any time soon.

      But I was wanting to ask you something: To which extent do market advisers such as yourself take into account the environmental resistances to progress that are sure to come in the near future? It is a fact that we are coming out of an era of abundant planetary resources (which was absolutely ideal for growth) and are now entering an era of very limited planetary resources (which would be somewhat less ideal).

      Do you think that this is already influencing markets? I have a feeling it could be that the various attempts at stimulus going on around the world is not working simply because environmental resistances mean that you do not get such a great bang for your deficit spending buck any longer. Since growth now faces environmental resistance as well, it simply becomes a lot harder to grow yourself out of a recession.

      It would be interesting to get your thoughts on the significance of this effect.

  1. I think scarcer resources are influencing company and investment decisions. I have worked on investment funds for 16 years and it’s only over the past year I have been asked to advise sustainable companies seeking to launch their own environmentally aware investment funds. This evolution is both demand and supply led with companies accepting they have to work harder to protect the planet and investors proactively seeking green investment opportunities. One of the resulting challenges investment advisors like I face is improving my green investing knowledge quickly and efficiently enough so that I stay relevant.

    1. I have been looking for some green investment funds to make an ethical and perhaps long-term profitable investment, but I did not find much. Are you aware of any such funds? I’m one of those guys who just wants to put in some cash and then forget about it for some years, so it has to be a professionally managed fund with a good chance at offering good long-term returns.

      1. I do know of such funds but you would really need to sit down with a qualified advisor that understands your needs in relation to return, risk, liquidity and investment horizon of your portfolio, and other unique circumstances that you have. You also need to consider the tax implications of the fund your are reviewing and the domicile of the investment. I also need to stick to regulatory rules so, for example, I cannot deal with investors in the US. It’s worth your while getting recommendations from local friends and family and finding a qualified advisor who lives close to you so you can have regular face to face contact.

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