The previous post discussed the issue of Europe and in particular the EUlite reacting negatively to the prospect of Europe becoming a relatively poor nation among richer nations of the world. One of my main points was that this is purely a perceptual problem, even the absolute standard of living in Europe continues to improve.
Mike Earl posted a comment that relates well to this:
I’m wondering if some of the increase in the spread of American incomes isn’t actually due to an excess of prosperity. The difference in volume levels of car stereos has become much higher in the last ten years, not because car stereo sales have become less fair, but because they have become so cheap that most people have all they want. Similarly, a bigger income distribution may be in part because those who really care can get plenty, and those who don’t don’t have to stay close to that level to have a decent living.
I found this very interesting for two reasons.
One is its relationship to my point about Europe and its economic future. While European economic policies obviously prevent it from being competitive, that’s far more of a lifestyle choice in this era of plenty. Why shouldn’t the Europeans favor their particular form of economic solidarity to Anglospheric capitalism? Is not the emerging gap between Europe and the Anglosphere the result of a choice just as Earl brings up?
On a personal note, I’m in the middle of a long process of starting my own business and one of the key choices to make is what kind of business to build. I could have gone for a model with massive growth potential but I rejected that because of the non-monetary costs of such a venture. Instead I chose something that will do quite well but will certainly not be on the cover of Barron’s.
It may be that this is a contribution to the falling fortunes of the Democratic Party and their class warfare. As more and more people can get to be as rich as they want, the fact that others are richer will become increasingly less relevant.