Warning: this article is a work of wild speculation. The existence of this article does not mean that I condone the extrapolating of a single figure for 500 years under normal circumstances. I am not an economist, so I actually have no clue what I’m talking about. My research tool for this was Google, so my figures are to be trusted :-). However, I am prepared to take instruction. If you can improve this wild speculation in any way, then please contact me: kyb at deferential.net
Introduction
The tendancy of people to redefine luxuries as necessities has been the fuel to capitalism, to the benefit of the total wealth of the world. Given that capitalism doesn’t work too well without inequality, it has also ensured that many hard working people are wage slaves or in poverty. A utopian future, as Marx might have imagined, or as you may have seen discussed in Star Trek, or the Culture novels by Iain M Banks could not possibly come into existence without a massive labour surplus.
If everyone was happy with the bare essentials, the world already does have enough to provide acceptably for everyone. The surplus is not enough however for people just to do whatever they want. When I say acceptably, looking at the figures, we are talking a very basic lifestyle. Everyone would have to work approximately as hard as they work at the moment (less if the labour is divided evenly), and people just wouldn’t do it. People can’t maintain a high level of productivity if there is no personal benefit to it over being entirely unproductive, except for the nebulous feeling of satisfaction you might get. This is particularly true when you realise that the majority of people probably don’t have jobs they particularly enjoy.
But people are never happy with the bare essentials.
If there is anyone with the desire for more wealth than they have, the whole system breaks down, because inequality is self-reinforcing. In Utopia, everyone must have what they want or they will devise ways to take it from others.
How much surplus do we need?
I’ve often heard it argued that no matter how much money you have, you always want more. After reading quotes and interviews with extremely wealthy people, I’m pretty sure that simply isn’t true. No one contends that great wealth brings happiness, but the quote from Arnold Schwarzenegger is typical:
I now have $50 million but I was just as happy when I had $48 million.
But maybe Arnie is being too conservative. How much could anyone ever want to spend, as a rough maximum? This is a fairly difficult figure to estimate. The average person in the UK spends roughly 1.5 million pounds (2.7 million dollars) over their whole lifetime, but I’m pretty sure that every one of them would like to spend more if they could. It’s not until you get to the very wealthy, where they give large portions of their money away, and still die with millions unspent that we could get an estimate for the most you’d want to spend. The wealthiest people in the world really can buy anything they want, yet even the most profligate rarely spend more than 0.5% of their wealth in a year on luxuries.
According to Forbes, Mr Over-The-Top Spender would be Roman Abramovich, who by quite a long way overspends his nearest rival with 700 million dollars over the last two years spent on play things. (Chelsea FC, a yacht with helipad, another yacht, a boeing 767 fitted with a kitchen with goldplated sinks). This amount spent is unusual even for very rich people, but if we say that the most anyone has spent on toys over a single year averages out to 350 million and multiply that up by 80 years, I think we can get a generous estimate as to how much money would be enough for even a big spender over their whole lifetime. I think that at this level, we can ignore other living costs as being negligible.
The lifetime amount is 28 billion dollars. Two people alive have a good bit more than that according to Forbes. Bill Gates (48 billion) and Warren Buffet (41 billion). To spend 28 billion dollars over your entire lifetime you’d need to be spending 40,000 dollars every hour of your life, quite a challenge. If you want to see if its possible you need to see if Bill or Warren are interested enough to try the experiment. It’d still leave either of them in the wealthiest top 10.
If we relied on peoples personal motivation to do work that they wanted to do, rather than work that they had to do, I estimate a drop in productivity to 33% of its current value. This is a complete guess, based on the number of retirees who still do productive work if they are able, plus anecdotal evidence, plus the fact that even if I didn’t need to work, I think I’d still work 2 days a week. If you’ve got any ideas for a better way to estimate this figure, then let me know. The actual figure may be much higher than this particularly if people live in a culture where productive work is highly respected, and if the majority of people aren’t so creative and need suggestions about what to do with all their free time.
If this estimate is correct, then to allow everyone to do whatever they wanted, we’d need a society that produced approximately 3 times whatever level it needs to sustain people. For the truly utopian society where even Roman Abramovich doesn’t feel like he needs more wealth, we would be looking for a GDP per capita of 3x 350 million or 1.5 billion dollars.
How much longer
Is a per capita GDP of 1.5 billion even possible? There are a wide variety of opinions on whether there is an upper limit to possible wealth or not. The Culture of Iain M Banks does it by using the resources of space and having many artifical intelligences of various levels to do all the needed work. Luxembourg is the closest so far with a tiny 58.9 thousand dollars GDP per capita. So they’re 0.004% of the way there.
In the US, GDP per capita annual growth rate has been around 2% since 1975 and has even picked up of late. Extrapolating from 2004 figures of 40100 at a rate of 2%, the US reaches that goal in 2536. The world of course reaches the goal a little later (8800 in 2004, a growth rate of 2.2% estimated from figures since 1820) in 2558. Only 553 years to go!
Cancel the Revolution!
Or at least postpone it until 2558
My best guess is that utopia (also communism) doesn’t work until 2558. All you Marxists should get your nose to the grindstone and work on increasing productivity until then. But those who are alive then will see the demise of money, and a vast flourishing of individual freedom. When people are completely free economically, they’ll have a lifetime to contemplate all they other ways they feel constrained. And we’ll finally be able to test my theory that without limits there is no creativity.
Originally posted at deferential.net
kybernetikos 
The trouble with your Utopia is economic on one hand–I’ll provided some comments on that in a moment—and philosophic on the other. Philosophically, the trouble is that rather than Utopia being a pleasant place, it’s a version of hell on Earth.
In the version of Marxist Utopia which you describe “[i]f there is anyone with the desire for more wealth than they have, the whole system breaks down.”
But a corollary of this statement is that “No one can produce anything new or improve on anything that already exists.” Doing so would upset the delicate balance of equality which exists in this Utopia. For instance, say your sister is suffering from a degenerative disease for which you eventually discover a cure–it’s a complicated and time-consuming procedure, which only you understand fully at the outset. But she’s cured! That’s fantastic right? Well, if lots of people are suffering from the same disease, it’s a problem for our equality situation, because your time is limited, and you can’t cure all the people with the disease, since only you understand how to do it. Maybe you can train some people to do it, but that takes time too. So now you have to decide whether you want to cure or train. And you have to decide who to cure and who to train. The point is that some of the people with the disease are going to get attention, and some aren’t. And that destroys our situation of perfect equality–all because we discovered the cure to a disease.
The larger point is that any society of equality is one of stasis. And given that one thing which drives people, as well as providing them with fulfillment, is working to improve their lives and those of others, a static society sounds more like hell than Utopia to me.
I understand that the point about equality this isn’t the main thrust of the article–it’s just sort of assumed that a society of equally distributed wealth is Utopia–but the illustration of the problem above provides the basis for a fundamental criticism of the idea that you’ve posited: There is some quantity of wealth where we can all spend as much as we’d like–even if that’s really a lot–and still not have to worry. At that point we don’t need capitalism to generate new wealth–there’s plenty to go around–and we can all live off the fat of our ancestor’s labor in a communist paradise.
The basic problem with this is that it could only be the case if the things we spend money on weren’t scare.
For some things that may get to the point of being true. Digital music, for instance. Once a song’s been recorded and digitized, the cost of each person getting a copy of it is small enough that we could imagine it going to zero over time. I would imagine that we’ll see a proliferation of items like this as time passes. People will be able to make, distribute and consume as much digital media as they desire, for a very nominal cost. If all items were like this, it wouldn’t require that our per capita GDP grow much, as the cost of items would fall to almost nothing.
However, most goods aren’t like this, most especially services provided by other people. They are scarce, and in such a way that it would be hard to imagine ever having enough for everyone, in which case, all our billions still wouldn’t be enough to make everyone happy.
To illustrate this let’s do a thought experiment: Let’s say, for instance, that gold plated sinks come into fashion. We’re all super-hyper-mega rich and we can all afford a gold sink, right? Well, no. There’s only so much gold. Let’s say, enough to make sinks for half the population. But everyone wants one, so how do we decide who gets them?
Well, we have a couple of alternatives. We could distribute them randomly, but what we’d find is that “random” would usually mean “to the distributors friends and family.” Or we could go with a first-come, first-served approach. That seems fair, other than you either have to waste time in a physical queue, or hope to be the first to enter an electronic one. But at least it gets the sinks to the people who want them the most (as measured by the amount of time someone is willing to exchange to buy a sink). Another way–a way used by multiple societies throughout history–is to use money. I mean, that’s what everyone has all these billions for, right?
So we decide that the people who will pay the most will get the sinks. There are various ways to determine the right price for a sink, too, but I don’t think we need to go into the precise market dynamics. Suffice to say that if everyone wants one, and there aren’t enough, the price will rise, and we’ll have people without sinks. What’s still more likely is that as prices rise, some of the people who initially bought sinks will see how much they could sell their sinks for and think “damn, I like my gold-plated sink, but not that much,” and sell their sink for a profit, thus enabling them to spend a bit more on the next fad. And they’ll probably think of themselves as generous, giving up their sink to someone who obviously wants it more. And one could make a pretty reasonable argument that they’re right.
Now you may be saying, “Sure some people are willing to spend more than others, but how much can a gold-plated sink cost? We’ll all still be super-mega-hyper rich after the gold-plated sink ordeal.” Not so. The price of the sink won’t be determined by how much it cost to make, but rather by how much people are willing to pay, and let’s say that some people are willing to give half their wealth for a gold plated sink. So now they are .5 * super-mega-hyper rich, and the people selling the sinks are super-mega-hyper rich + (a lot more money from the sink buyin’ crazies). Multiply this over many hundreds of goods and services, and what happens is that some people are effectively rich and some are effectively poor. It’s all just happening at an inflated level of wealth.
This points to another quality of wealth. For the most part, in the western world, poverty is more or less a relative phenomenon. There are certainly some people who are desperately poor, but most of the people we think of as poor are really what would be better called “low income.” That is to say, they have a place to live, enough to eat, probably a car and almost certainly a television, but are highly constrained in what they can buy. They are poor in comparison to the rest of society, but if they were compared to the average person of 50 years ago, might be considered well off. I personally think that unequal distribution of wealth is an inherent condition of humanity, but in any case, we’re not going to find out simply by raising per capita wealth, even to super-mega-hyper levels.
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I agree that uneven sharing of wealth is a feature of human nature, at least as long as there is even the smallest amount of scarcity. “The poor will always be with you” as a certain middle eastern sage once put it.
The GDP per capita example is meant a little frivolously, lets think way ahead though. I’m not entirely certain the gold plated sinks are a good example, because that assumes scarcity of matter, and I allow for the possibility of there being no scarcity of matter or energy. In fact, that’s really the time I would like to predict, that I was hinting at with such outrageous GDP per head, the day when matter and energy are so available that there is no lack of any of it for anyone. Maybe it isn’t possible, but there is a lot of both in the universe and there are always radical possible futures, I’m thinking dyson spheres, matter from space, matter from energy, virtual reality. So I think that a future where everyone really can have as many gold plated sinks as they want is actually possible.
Your point about services though is a real problem. No matter how wealthy people are, it’ll always be difficult to get them to do things for you that they don’t want to. In fact, it’ll become completely impossible if you can’t give them anything they don’t already have. The only way you’ll be able to encourage others to do things for you is with reasons they agree with. This is a serious problem (but is it a bad thing?), the only way out of it, keeping the whole economic utopia idea is a world where nobody actually needs anyone else to provide them with any services. Will people ever feel comfortable giving their kids to robots to look after? Or will they simply have to learn to live with the fact that they can no longer economically coerce others, and look after their kid themselves if they can’t find someone else who would help them because they want to? I suppose that even in an economically utopic world, some services would still trade (only for other services though).
Whether or not it would be nice to live in is an entirely different matter that would surely depend on taste. Personally, it doesn’t seem like hell by a long way to me. You’re right that improving ones lot is an important motivation for many, but it’s one of the baser ones and less powerful than others. If I didn’t have to work for money to maintain my quality of life, I would have a lot more time to be creative and for relationships. It’s the striving to be better in creativity and relationships that really drives me to do things, not striving to have a better material quality of life (I’m pretty much done with that, I’d like a bit more sure, but I can’t think of a single thing I’ve done for years in order to achieve that). I think this is probably true for most people. People persue professions because they enjoy them and the challenges they bring, not because they couldn’t make doctor/lawyer/politician (or whatever career society is rewarding most at the moment) school.
Such a society would be in a kind of stasis, but I don’t believe it would not be advancing. In fact I believe that when peoples only aim is to cultivate their creativity and relationships, we would experience the most vibrant society imaginable, with amazing art, and continual new technological discoveries.
There are at base only three raw materials in the universe, energy, matter and thought. With these three you can make anything that can be made. The economically utopic society would have to be able to so manipulate matter and energy and have access to enough of both, that they could keep up with the only one of the three which was still scarce.
I think that there is no physical or behavioural reason that this could not happen. If it really is possible, and humanity survives long enough, then crazy as it seems, it may even be inevitable.
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Interesting article!
It appears that most of the points I was going to make have already been made by “TW Andrews” so apologies if I repeat some.
“Given that capitalism doesn’t work too well without inequality, it has also ensured that many hard working people are wage slaves or in poverty.”
Define “poverty” 🙂 I would argue that those we regard as living in poverty in the UK today are better off than the many of the richest people of 500 years ago. That is: in most Western countries, poverty is now a relative phenomenon rather than an absolute one. That’s not to downplay the unpleasantness of having less than your neighbour but it is to make the point that one needs to make a choice here: do you want everybody to get richer (but some to get richer than others) or for everybody to be equally poor?
“The wealthiest people in the world really can buy anything they want”
Not quite 🙂
They can’t spend their money on things that don’t exist.
It doesn’t matter how wealthy a 19th century plutocrat was, he still couldn’t have an iPod. He *could*, however, pay for forty people to follow him around and play his favourite music on demand.
The difference is that, today, people of even modest means can afford to carry their entire music collection with them wherever they go.
I guess this plays to the point (above) about stasis: a lot of left-wing thinking completely neglects the observation that scientific, social and technological progress has not stopped.
“Only 553 years to go!” [until everybody’s stinking rich!]
Coming at it from another angle, this is, of course, the argument for doing nothing about climate change: had Stern used the model that assumed the world followed policies most likely to encourage economic growth, the outcome would have shown that the cost of doing something now will impoverish both us and the “future people” (through suppressing the GDP upon which the growth rate is applied) – and it will do so to a greater extent than doing nothing now and forcing the people of the future to pay the larger cost of amelioration then. In other words, doing nothing today is both better for us *and* those in the future.
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