Has anyone ever sat back from their economics courses, and actually asked the following question:
"Why, in an age of such prosperity, are there so many people desperately in danger of poverty?" I have a theory. In another post somewhere (I would have to dig it up), I broke down our typical expenses. I realized a while later that, a huge percentage of a person's paycheck in a typical city goes to "rent" or mortgage or whatever. I then started to ask, why is housing weighted so, in comparison to say, food, or waste disposal, or water, or any other basic need? Why is it that someone can go into Coach and spend $5k on two purses that look like shit, but someone just outside through bad luck or even stupidity (God forbid we should make mistakes!) is rummaging at MCDs garbage can to eat?
Ok, I said, let's apply economic principles. Land must be a finite resource. There is only so much of it to go around. So I looked up what percentage of the US is actual living land. Something like 7%!!?? Hmmm, that doesn't seem right? Then I thought, well, ok, so it can't be economics, at least not classically. Then I thought to myself, wait a minute, if I go to NYC hotel, and get an orange juice, it costs $7. If I go to Brooklyn, it costs $1.50!?? Hmmm, what can cause the price of OJ to skyrocket from one place to another, only miles away, like this??? (there should be an arbitrage in there somewhere in efficient markets). Then I thought, land!!! Land is far far more expensive in NYC than in Brooklyn. But land can not explain it completely. Then I thought there must be a principle at work here, and I realized that in every single item we buy, there are middle men from the OJ producer and the final consumer. This must be the reason, there must be way more middle men in NYC than in Brooklyn. But then even this could not explain all of it. What else? I finally threw my hands up and realized that it has to be psychology. Why on earth would someone pay $7 for a glass of OJ? It must be that people charge whatever someone is willing to pay for it, and can be abused or "sold to." Of course this is no new insight, brokers try to screw old ladies out of their pensions, so why wouldn't this human principle apply anywhere else?
My point is, a huge portion of the population has to spend 80% of their life towards rent. Communism probably recognized this and disallows private land ownership. I am thinking that this is not a bad idea, no private land ownership. Did we throw out the baby with the bath water in Communism? Would it alleviate this endless inflationary pressures in our most basic needs?
Most everyone on earth dedicates their life to the "lower" pursuits. Not to art, science, etc. I am not saying we should all be wearing bedsheets discussing the finer points of Kant. But is life, in 2011, in the richest nation on earth, 80% (100% for the poor) survival?
We never left the jungle.
"Why, in an age of such prosperity, are there so many people desperately in danger of poverty?" I have a theory. In another post somewhere (I would have to dig it up), I broke down our typical expenses. I realized a while later that, a huge percentage of a person's paycheck in a typical city goes to "rent" or mortgage or whatever. I then started to ask, why is housing weighted so, in comparison to say, food, or waste disposal, or water, or any other basic need? Why is it that someone can go into Coach and spend $5k on two purses that look like shit, but someone just outside through bad luck or even stupidity (God forbid we should make mistakes!) is rummaging at MCDs garbage can to eat?
Ok, I said, let's apply economic principles. Land must be a finite resource. There is only so much of it to go around. So I looked up what percentage of the US is actual living land. Something like 7%!!?? Hmmm, that doesn't seem right? Then I thought, well, ok, so it can't be economics, at least not classically. Then I thought to myself, wait a minute, if I go to NYC hotel, and get an orange juice, it costs $7. If I go to Brooklyn, it costs $1.50!?? Hmmm, what can cause the price of OJ to skyrocket from one place to another, only miles away, like this??? (there should be an arbitrage in there somewhere in efficient markets). Then I thought, land!!! Land is far far more expensive in NYC than in Brooklyn. But land can not explain it completely. Then I thought there must be a principle at work here, and I realized that in every single item we buy, there are middle men from the OJ producer and the final consumer. This must be the reason, there must be way more middle men in NYC than in Brooklyn. But then even this could not explain all of it. What else? I finally threw my hands up and realized that it has to be psychology. Why on earth would someone pay $7 for a glass of OJ? It must be that people charge whatever someone is willing to pay for it, and can be abused or "sold to." Of course this is no new insight, brokers try to screw old ladies out of their pensions, so why wouldn't this human principle apply anywhere else?
My point is, a huge portion of the population has to spend 80% of their life towards rent. Communism probably recognized this and disallows private land ownership. I am thinking that this is not a bad idea, no private land ownership. Did we throw out the baby with the bath water in Communism? Would it alleviate this endless inflationary pressures in our most basic needs?
Most everyone on earth dedicates their life to the "lower" pursuits. Not to art, science, etc. I am not saying we should all be wearing bedsheets discussing the finer points of Kant. But is life, in 2011, in the richest nation on earth, 80% (100% for the poor) survival?
We never left the jungle.
