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Stewart Cowley: Manchester United 1 – Capitalism 0
by Stewart Cowley on May 13, 2014 at 14:10
There has been a lot written about inequality recently, much of which I don’t understand.
Inequality is a bad thing that has to be eradicated we are told. But my problem with this is that inequality is being confused with happiness.
The pursuit of happiness
For instance, I have a friend who is a Buddhist. She leads a life full of contemplation and reflection without many material possessions but is, by her own admission, 'happy'. She certainly seems to have a grin on her face most of the time.
I, by contrast, am a fund manager which affords me a highly material lifestyle cluttered by possessions, financial assets and I look pretty grumpy most of the time. But, despite it all, I would classify myself as 'happy'.
If we were to live in our own two-person country the inequality gap between us would be enormous. And yet our national Happiness Index would be stratospheric.
In other words, a materially unequal society per se doesn’t tell us very much about how people feel. In fact inequality has been our main source of entertainment for about 100,000 years – differentiating and being unequal is part of being a human.
It is what propels us most of the time. To rob us of it would be against our human rights.
Much of the discussion around inequality appears to have been kicked off by the publication of Thomas Pikkety’s book, Capital in the Twenty First Century, which has become an unlikely number one bestseller on Amazon.
I admit to not having read it but I have read several things about it, including interviews with Pikkety. He has collected data going back over many hundreds of years charting the inexorable concentration of wealth into the hands of a powerful elite. This is worth a Nobel Prize, I understand.
But to me all he has done is re-discovered the equation for compound interest and the case for holding investments over the very long-term. Mathematics tells you that if you do this then your wealth will increase exponentially and a gap will open between you and those who don’t or can’t do it.
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