Builds Upon: The Tragedy of the Lords
As a kid I was constantly told that I was lucky to have been born in America, the wealthiest, most powerful nation on earth. In other countries, I was told, people frequently went hungry and lived on the brink of survival. Newspapers and magazines always had lots of pictures of emaciated malnourished people staring forlornly into the distance. This was the rest of the world.
In early adolescence I reasoned that it was hard enough to get by in America, the wealthiest nation on Earth. It seemed incomprehensible to me that people in other places had it so much worse.
As an adult I finally got the chance to see some other countries. In Latin America and in parts of Eastern Europe, I was clearly no longer in an affluent society.
Yet the situation I actually encountered was nothing like all the stories of famine stricken countries and bread lines.
Whatever the overall level of wealth in an area, people’s lives didn’t seem lacking in any critical way. Not even if their entire net worth might be a puny fraction of the average American income.
How could this be? I asked myself. All my life I’d been bombarded with hysterical articles wailing about huge percentages of the world’s population living on less than a dollar a day. ‘Dollar a day’ in America was synonymous with the malnourished people in the pictures!
Clearly all those statistics don’t mean what most people think they mean. It would seem that in many parts of the world, a dollar a day is actually a livable wage.
Wherever one may go, living expenses adjust to living costs. There’s an iron law of wages for any labor pool. If workers are paid too little to be able to buy food and have families, the system cannot function. Thus to some extent the idea of higher standards of living is illusory. Or at least the differences between places are not nearly as great as first world citizens believe. A hundred times the income does not translate into a hundred times the life!
If we stop and think: If a dollar a day is a normal wage somewhere, then the overall cost of labor there is very cheap. Therefore many locally produced goods and services lie within the purchasing power of the laborers. If most people make a dollar a day, local landlords obviously can’t demand hundreds of dollars to occupy a flat. They have to come up with some sort of option that suits the typical local income, even if it’s a hut. It might not have climate control, but it’s a place to occupy.
Luxury items and imports are going to be out of most people’s reach but one would anticipate that the basic needs of living must be affordable for the society to continue existing.
Furthermore, I noticed certain patterns in poorer countries.
-Where money is scarce, human relationships are a much more valuable asset than in affluent countries. There’s a lot more incentive to have cohesive social ties throughout a society when accumulation of capital is impossible. A third world laborer will never have a 401k plan. Most people in most places throughout history have never had retirement savings. Retirement was nearly always been provided by family and community rather than an individually amassed fortune.
Additionally, low earning laborers are going to have access to things that money cannot buy in prosperous lands. Any land on earth has its share of resources that are difficult to find anywhere else.
In America, I’ve never been able to find good papayas. The ones available are invariably withered, battered, and expensive. Worse they don’t ever seem to properly ripen. Maybe refrigeration arrests the ripening process? In any case, they’re not even edible unless they’re baked in the oven.
Meanwhile, there’s no shortage of third world laborers who have daily access to a small fortune worth of fresh, ripe papayas for pennies or even for free.
Recently, I met a former archaeology student who told me tales of a dig he’d worked on in Bolivia. He told me of how the local poor farmers lived at high altitudes with no electricity. Then he mentioned that they had herds of alpacas. I pointed out that these Bolivians were able to protect themselves from the cold with some of the finest wool on earth. Most Americans would be hard pressed to afford the high quality alpaca wool clothing those Bolivian peasants probably take for granted.
In an affluent nation it’s too easy to forget that wealth can take many forms besides tokens of liquid exchange.
We can anticipate that:
Where capital is lacking, people manage to fulfill the same needs by cultivating other forms of assets.
-Markets adjust to the needs of the average laborer in more than just wages. The goods and services available, the way they are made available must also be adjusted to local consumers.
In Latin America, I found most people had easy access to the internet even though none of them could afford their own computers or internet connections. When the average income is low, it’s only a matter time before there’s an internet café on every corner. I’ve found abundant internet cafés in nearly every part of the world I’ve been to except for North America and the UK.
Renting a computer is fairly expensive in wealthier countries. In poorer countries, the rates are trivial pocket change, even in the local currency. The cafes are full of adolescents who have no source of income. Even the little bit they can scrape together is enough.
As average income decreases, the iron law further compresses even the price of the same service!
The big idea?
If there’s a service in popular demand, merchants will find a way to provide it in a way the locals can afford.
Until one is truly among the malnourished and starving of our world, there are ways to accomplish the tasks a local population wants to accomplish.
It turns out that there’s expenditures to fit every budget.
In America, most people live paycheck to paycheck. Elsewhere, people live paycheck to paycheck. Thus, the iron law is a natural law that works with far greater reliability and efficiency than any manmade institution.
Wherever one might go, subservience is the price of purchase.