There are huge inequalities across the globe in terms of wealth, both between countries and within each country. Is it possible that at some future date all nations on earth will be rich? I know economic growth is not a zero sum game but I’m curious as to whether it is possible to enrich everyone on earth or do resources put a limit on how many people can be well off?
I’m looking for a factual answer but the mods are welcome to move this to GD or wherever if they think it more useful.
Thanks,
An Gadaí
The problem with the question is that ‘rich’ is a relative term. The poor in the 1st world are enormously wealthy by 3rd world standards, yet they don’t consider themselves rich.
More concrete questions might work better, such as “can we ever provide a minimum diet and basic health care to everyone in the world?” The answer to that isn’t really a question of economics, but of politics. Most very poor countries are poor because they have despotic governments, poor central planning, or engage in constant warfare. Starvation and misery will be around for as long as there are governments willing to brutalize their people to keep a handful of people in silk at the point of a gun.
Economically speaking, there’s no reason we can’t generate as much wealth as we need for everyone to live current 1st world lifestyles. There is no phyical barrier to this taking place.
The reason some countries are wealthy and some are poor is directly related to how greedy the individuals “in charge” are.
Countries where the government allows individuals to own property, operate businesses and keep a reasonable amount of the money they earn, are wealthy. Countries where the government owns just about everything and confiscates individuals money through corruption and high taxes are poor.
Natural resources have nothing to do with it. Hong Kong, Taiwan and Japan are fine illustrations of this. These countries (Yes, I know H.K. is part of China now) have few natural resources, but are among the richest countries in the world because the governments allow private property and tax rates are relatively low.
Many countries in Africa have great mineral wealth, but are among the poorest in the world. This is because those in charge (with the guns) want it all. Property can be confiscated at a moment’s notice. My friends from Mexico tell me that you better know someone pretty “high up” if you want to start a business. If not, the government business “permits” and “fees” will put you out of business before you even open the doors. Look at all the countries that are “basket cases” and you’ll find government corruption and greed are the problem.
The answer to you question is “yes”, but only when governments around the world allow their people economic freedom. Look at China after Deng Xiaoping declared “It is glorious to be rich”.
I think that even Ayn Rand would agree that in the absence of truly free, limitless energy, there will always be income inequality and someone greedily clawing their way to the top…errr, I mean, gallantly striving to better mankind by producing the perfect railroad rails.
I wouldn’t say natural resources have nothing to do with it. Natural resources can make a country rich, but are no means a guarantee (Nigeria) nor the only path to prosperity (Japan). However, it is undeniable that resource wealth can improve a country; look at Norway and Saudi Arabia.
Most resource economists would admit that in some cases, resources can create instability (providing more of an incentive to seize power) and cause problems for other export sectors (the Dutch Disease).
Resource wealth can also promote stability, however, as rich people are generally happier. (By happier, I mean less likely to cause trouble). Chile, for instance, is the least corrupt and probably the most stable country in Latin America, largely because they have a century old copper export industry. People are less likely to go off the reservation when the roads are good and the schools are open.
To the OP, cornucopian economists (like myself, I must admit) see inputs as practically unlimited in the long run, so there is no binding constraint precluding every third world country from dramatically improve their lot. The average person in any country is better off today than they were 100 years ago. That’s why such issues as child labor are controversial. No one likes the idea of child labor in the third world, yet child labor was the norm a century ago in the US and Europe. So, in my opinion, if the first world is against child labor in the third, they need to pay other countries not to engage in the practice.
Now if you are talking about wealth in relative terms, that would take some serious thought and research. Can we expect poor countries to become better off? Absolutely. Can we expect poor countries to become better off relative to rich countries? I’m not sure.
No one seriously believes that oil will last forever. However, we can easily do what needs done with current technology that doesn’t rely on oil only. Even the most hardcore cornucopians will admit that resource scarcity can be a binding constraint albeit a temporary one.
Come on, you should know better than to answer any economic question by saying that there’s one, single reason. These problems are all way more complex than that.
T_SQUARE provided some other explanations. Domestic politics in a country can hurt incomes in more ways than just corruption - instability, for instance, discourages investment, even with a clean government.
Imagine if we never had to worry about the cost of providing electricity, food, water, and shelter in poor countries? Where does money come from? Don’t we just print money out of paper anyways? Why can’t the bank just print infinite amounts of money and get rid of poverty altogether?
Consider that 600 million is the commonly cited number for how many cars there are in the world. There’s about 6.6 billion people in the world. Let’s say every other one had a car: the demand on gasoline would be absolutely phenomenal. The scarcity of oil would certainly preclude people from using cars. Seriously, would you use your car if gas cost $15, $30, or $50 a gallon? I reckon that the first world lifestyle WRT cars would buckle far before most people could own one. Now, if Mr Fusion ever makes it to market, maybe we could all have a whip…
According to this web site, no. Basically it throws out the stats I’ve heard before that the Earth can sustain approximately 2.2 billion people at a European standard of living or 3-5 Earths can sustain the current population of 6 billion at an American standard of living.
I’m not sure how they calculate this though. But I assume that the ultimate goal is to create a self-sustaining system. Basically that would consist of using only renewable energy sources, only utilizing resources at a rate which which they can be naturally replenished, and so on.
The short answer is money (including but not limited to actual paper currency) is a representation of the perceived value of a nations economy. A nations economy is the sum of all the goods and services it produces. So essentially if you print twice as much money, inflation (or hyper inflation if you keep on printing it) will take over and you will find that everything now costs about twice as much. This actually happened in Germany in 1923.
I wouldn’t put much stock in that site. They don’t cite thier figures that I can tell, and thier main goal appears to be getting 3 billion people to die.
I read in an Economics book for Leaving Cert. (Upper High School/A Level) that there are not enough resources to go around so there will always be extremely poor people. That’s what got me asking the question in the first place. I’m aware standards of living, quality of life isn’t entirely tied to the amount of hummers you own or storeys on your mansion but can those in extreme material poverty expect their lot to improve significantly over time?
I know for example Ireland went from being a materially poor country to a materially rich country in a shortish amount of time.
In my opinion, there is a good chance that we (westerners) will eventually develop AGI (artificial general intelligence) and other technologies that let us manufacture good and provide services at extremely low cost.
Under those circumstances, there’s no reason not to give stuff for free to poor people.
So yeah, I think we’ll probably all be rich by today’s standards.
The only problem I see is that very few people are content being rich by yesterday’s standards.
You are right in saying that Economics is about efficient utilization of scarce resources; limited inputs in the face of unlimited wants. People will always want more, no matter what. When everyone has that sweet 98 Passat, everyone will want a new Rolls. Wants are insatiable.
Nothing precludes a given standard of living, however. You cited Ireland, but we have seen exactly the same thing in every single country in the world. Even the United States 100 years ago wasn’t Epcot Center. Even the richest guy in New York would probably have had a hard time getting a salad at 3:00 am in the winter time. I live better in many respects than Queen Victoria did, for example.