Rethinking Individual Wealth
Would you rather own an abundance of wealth or actually live within it?
“The right man to marry my daughter is someone that owns a home, a car, and a thick wallet.” This line was from an Indonesian bank commercial for some savings product. It showed a man buying a house and car after his future father-in-law said those words. Although this is just an ad, it reflects society’s materialistic values that can be found all over the world. Wealth is often viewed as a symbol of success, making people judge others by their job title, house, vehicle and apparel. Having a large backyard, a nice car and limitless cash gives a sense of power and freedom to do what we like. It also gives a feeling of satisfaction for all the hard work well-done. Therefore, wealth is the most common individual goal. Then again, how much wealth do we really need?
Let’s think about individual wealth. Would you need a large backyard if there are nice parks nearby? Would owning an expensive car be necessary if there is adequate public transportation and ride-sharing platforms? Would your children have to go to a private school if public schools can give standard quality education for free? This could be an option for people in developed countries, but those in developing countries would not have this privilege. The following questions would be, why do people pursue wealth and what would be the issue?
Take the American Dream for example. According to historian Sarah Churchill, the original concept was deeply rooted in the Declaration of Independence created by Thomas Jefferson and his comrades. The real dream was to have equality, justice and democracy for the nation. It was not about individual wealth, but a society where everyone has equal rights and opportunities to be what they want to be. However, this concept shifted during the Cold War to triumph American Capitalism against Soviet Communism. The dream would then be towards individual wealth, which is evident until today. We can see from the 2016 election that the ideal American according to the majority is someone with private resorts, casinos and luxury apartments with their name that loves firing people.
The more concerning thing is that several countries have adopted this economic concept, especially those that are still developing. Most people in developing countries don’t have the minimum living standards as the developed, since the government does not have the fiscal capacity to provide the same level of public goods such as education, healthcare, and parks. Therefore, the wealthiest in the private sector are granted power to offer ‘the dream’ in the form of gated communities that separate “winners’’ and “losers” in the capitalist system. Only certain professions can help people “win”, forcing many to leave their actual dreams.
When most people have the goal of individual wealth, there will always be a group that is worse off. People would have to compete against each other in pursuit of the capitalistic dream. After the separation is created, the “winners” could then set the status quo to ensure that their future generation and/or community members would benefit as well. Hence, they would send their children to elite private education that brings an unfair advantage in the job market. Other cases would be giving stake of their company to members of their community, to ensure their wealth runs within their network. The wealthy groups would create employment opportunities, however, many would be in personal assistance for unskilled labor. The recipients will be unlikely to have a progressive career nor enough income to pay for their children’s education. Many of these ‘wealthy winners’ do offer quality employment as they are business owners. But when their net worth increases, they would probably seek more profit by investing in new business ventures instead of increasing their employees salaries. While the owners enjoy more wealth, their employees will continue to struggle financially. All of these cases show how the pursuit of individual wealth leads to income inequality and systemic poverty.
So, how can we stop inequality and achieve shared prosperity? The initial step would be state intervention. One of the main factors of systemic poverty is unregulated poverty, leading to markets getting out of control and creating huge wealth gaps. There are several actions the government can take to overcome this. First is setting a universal basic income. This would relieve people from the stress of accessing basic needs. Development organizations currently measure shared prosperity based on the increased income of the bottom percentile. Those that are increasing would indicate a tightening in the wealth gap. However, just an increase of incomes is not enough when we consider inflation, people may earn more but might have to spend even more. This brings the second action, increasing investment in public goods. To grow, people must access quality and free services such as education, health care, transportation and green space. This would give them equal economic opportunities and reduce the need for unnecessary spending. Third is having a wealth tax. Excessive personal assets, such as unused condos and backyards the size of city parks, limit the space to serve the people with actual needs. Having a wealth tax would disincentivize people to hoard up land and resources, creating more room for public goods. Finally, to make sure fiscal revenue is used to serve the people, corruption must be eliminated. An idea for this would be digitizing processes to make records easily traceable and transparent to the public. Civil society would then gain more trust for the government.
A good example can be found in the Nordic countries. People are happy to pay high taxes as they know how it will be used. The government delivers their promise in giving people high quality education, healthcare, affordable housing, and public space. Aside from removing common burdens, it builds a talented productive population that is able to create good quality jobs. The income gap is much lower as every worker is fairly valued. Work-life balance is also important, people are expected to work around 6 hours so they have time to socialize or indulge in their hobbies. This economic model shows how a country can run as an equal and just society.
Now let’s imagine a state where wealth is shared, instead of being pursued individually. The majority population would not need to worry about survival or escaping their rough neighborhoods. People can do what they really love without being concerned about paying the bills. Employees would work for work itself, not for salary increments or incentives. Companies would benefit from higher productivity and team morale with less inefficiencies from office politics or frauds. Children can learn at the same level, play in the same standard facilities, and spend more time with their parents who no longer worry about education or nutrition spending. We wouldn’t hear quotes like ‘Be grateful, for there are people around us not having dinner tonight’. Instead, it would be ‘Be grateful, as we are part of a place where everyone can enjoy a decent meal tonight’. We may not own an abundance of wealth, but be living within it.
To share a personal experience, there’s something I learned during my year studying in London, that was not in my postgraduate program. During that time, I relied on my scholarship funds, which was around minimum wage, in one of the world’s most expensive cities. I was also facing uncertainty as my course of study was quite niche and there was no job awaiting me after I finished. My usual activities in Indonesia, like dining out and riding taxis, became luxuries. However, despite having limited spending capacity, I was happier than ever! It was the fact that I did not need much to enjoy the city. Instead of hanging out at cafes, I could spend nice social time for free at the serene city parks. I did not have to worry much on medical bills as the NHS had the essentials covered. I did not need to ride cabs as the buses could take me anywhere and every part of the city was walkable. I realized that although I did not possess much wealth, I was actually living within it. London is not perfect, it still faces issues like gentrification and shortage of affordable housing. Nevertheless, the overall population can still access basic needs and enjoy quality public goods.
In my conclusion, the real goal should not just be individual wealth. It is being able to contribute to inclusive economic development. To help build a society where people are treated equally, having the same opportunities and access to decent living. The late Kobe Bryant once said, the real dream is pushing yourself to work hard at something you really love. Let’s build a society where everyone has the opportunity to live that dream!
