The Prosperity Paradox

Why the wealthiest people in history don’t feel rich

October 2021

Script

Click to reveal bonus content (fun facts and additional insights) within script.

 

A 16-year-old boy gets a blister...and is dead within a week.

A man in his 50s ends up in the grave...because he can’t get antibiotics that cost just a few cents.

We’ve all heard stories about the horrors of extreme poverty.

But these aren’t those stories. At least not in the way you think.

Because the 16-year-old boy was the son of the sitting President of the United States.i

And the guy who couldn’t get antibiotics...was the richest man on the planet. ii

You’re probably not either of those things. So how is it that you live better than them?

There are two things you need to know about America.

  1. We’ve got a lot of money. We’re the richest country on the face of the planet.iii
  2. None of us think we’ve got a lot of money. In fact, one survey found that only 13% of America’s millionaires consider themselves wealthy.iv

Now, this sounds objectively nuts. But here’s the thing: When we get more money, we tend to spend more money, which...leaves us feeling like we have less money. So, regardless of income, we don’t necessarily feel wealthy, because we’re still defining ourselves by all the things we just can’t quite afford.

(Someday you will be mine, $460 Prada paper clip. And, oh, the documents we will collate together.)

We all see the problem here, right? As your standard of living increases so do your expectations.

And, really, it’s even worse than that. Research has shown that the typical American judges his level of wealth not by objective standards like how much income he brings in, but by relative ones: how much money he has compared to his peers and neighbors. v

In other words: We get a little bit of satisfaction from making money. We get a lot of satisfaction from making more money than the bastard next door. And if the bastard next door is Jeff Bezos...we’re gonna be pretty miserable.

Not only does thinking about money this way lead to unhappiness at the individual level, it leads to a total lack of perspective at the national level.

In a 2017 Pew poll, 41% of Americans said life in the United States is worse today than it was 50 years ago.vi Which is—to use the scientific term—absolutely crackers.

During those 50 years, Americans’ incomes increased by nearly 150%.vii The average size of our homes went up over 60%.viii Our life expectancy shot up by almost a decade. ix

Not that we’ve solved every problem: We still have plenty to do to combat poverty and economic hardship. But what’s remarkable about the progress we have made is that it applies across the board. Regardless of whether you’re rich or poor, your standard of living is vastly higher than it was half a century ago.

Go back longer than that and it’s even more stark. Before the early 1800s, western nations barely saw any economic growth at all. x The amount of growth over a century was less than what modern America has seen in some years.

The result of all that growth: If you’re a typical, middle-class American, you, in many ways, have a higher standard of living than even the wealthiest people of earlier generations.

You’re not gonna die from a lack of antibiotics. A blister is something you can solve with a trip to your neighborhood drug store. In fact, we live in an age of such abundance that your biggest problem may be that the receipt from that drug store is something you can wallpaper your house with.

Seriously, does anyone know why we do this?

Sure, there are still nice things the wealthy have that we don’t, but even there: It’s not that we’ll never have them. It’s just that we’ll have them once they’re better and more affordable.

Case in point: In 1987, this was what a super-rich guy’s cell phone looked like. At the time this movie was released, less than 1/10 of 1% of Americans owned cell phones.xi Today, 97% do.xii And if you think your smartphone is pricey, this one would run you nearly $10,000 in today’s money. xiii

So while it might seem like you’re missing out, those rich suckers are actually paying the premium that will eventually get a more affordable version of the same product into your hands. And in recent decades the time it takes for those kinds of items to go from pricy luxuries to affordable necessities is shrinking dramatically.xiv

There’s just one catch to all of this progress: It’s not inevitable. If you take away people’s ability to innovate and be creative, you take away a country’s wealth.

Venezuela used to be the richest country in Latin America. Now its economy is in a total freefall.xv

Lebanon used to be called the Switzerland of the Middle East. Now they have power outages that can last 23 hours a day.xvi

North Korea’s economy is underperforming...by the standards of the 12th century.xvii

That’s not a gratuitous insult. Their economic growth is actually lower than the estimated growth in the 12th century.xviii

The openness and creativity of the American economy has served us well. We live much better lives that almost any humans who’ve ever inhabited the planet.

The result: You’ll never have to worry that a minor ailment will put you at death’s door.

You’ll never know poverty of the type your ancestors accepted as normal.

And you’ll never—ever—look this stupid holding a cell phone.

Sources

  1. The Medical Context of Calvin Jr.’s Untimely Death — Calvin Coolidge Presidential Foundation
  2. Global Extreme Poverty — Our World in Data
  3. GDP: OECD National Accounts Data — World Bank
  4. Majority of Investors with $1 Million or More in Assets Do Not Consider Themselves Wealthy, According to Ameriprise Study — Ameriprise Financial
  5. Who Feels It? Income Inequality, Relative Deprivation, and Financial Satisfaction in U.S. States, 1973-2012  Research in Social Stratification and Mobility
  6. Worldwide, People Divided on Whether Life Today Is Better Than in the Past — Pew Research Center
  7. Real Gross Domestic Product per Capita  Federal Reserve Bank of St. Louis
  8. New U.S. Homes Today Are 1,000 Square Feet Larger Than in 1973 and Living Space per Person Has Nearly Doubled  American Enterprise Institute
  9. Life Expectancy (From Birth) In the United States, 1860 to 2020 — Statista
  10. GDP per Capita, 1-2018 — Our World in Data
  11. Mobile Telephones For All Occasions — New York Times 
  12. Mobile Fact Sheet — Pew Research Center
  13. Your $1,000 Phone Is Really a Bargain — Bloomberg
  14. William J. O’Neil Center for Global Markets and Freedom — Southern Methodist University
  15. Venezuela: All You Need To Know About the Crisis in Nine Charts — BBC
  16. Collapse: Inside Lebanon’s Worst Economic Meltdown in More Than a Century — New York Times
  17. The World Economy (Angus Maddison) — OECD Development Centre
  18. North Korea GDP Annual Growth Rate — Bank of Korea, via Trading Economics

Shownotes

SOUND | ARTLIST: “BEACH PARTY” (ANTON VLASOV), “BE YOURSELF” (OLIVER MICHAEL), “SEXY TIME” (ANTHONY VEGA), “ANTHEM OF A QUIRKY HIPSTER” (REX BANNER), “UTOVER” (BLACKBARD)

FOOTAGE | GETTY: MARTIN PUDDY, JACKY LAM / EYEEM, JACOB NASEATH / EYEEM, THYME, REZA ESTAKHRIAN, ED FREEMAN, HULTON ARCHIVE / STRINGER, JACOB A. RIIS / STRINGER, GENERAL PHOTOGRAPHIC AGENCY / STRINGER, FPG / STAFF, TARA MOORE, LEIGH VOGEL / STRINGER, BHIMMELBLAU, HELIVIDEO, JUSTIN SULLIVAN / STAFF, HANDOUT / HANDOUT, MICHAL FRACKIEWICZ, ANDREW MERRY, ZABLER, CEKIMDEYIM, PEOPLEIMAGES, API / CONTRIBUTOR, GARY HERSHORN / CONTRIBUTOR // HOT POCKETS // INVESTOPEDIA // JACOB RIIS // LIBRARY OF CONGRESS: DETROIT PUBLISHING CO., LEWIS WICKES HINE, MICHEL VUIJLSTEKE, BACON, ALBION FELLOWS // MONGABAY // NASA: GODDARD SPACE FLIGHT CENTER // NATIONAL ARCHIVES AT COLLEGE PARK: LEWIS HINE // NEW YORK TIMES // PAOLO MONALDI // PEXELS: FAUXELS, BINYAMIN MELLISH, PASCAL RENET, MIKE, MONSTERA, ALEXANDR PODVALNY, OLADIMEJI AJEGBILE, ANDREA PIACQUADIO, MIKHAIL NILOV // PIETER BRUEGHEL THE ELDER // PNGFIND // PRADA // ROTHSCHILD COLLECTION: MORITZ DANIEL OPPENHEIM // STORYBLOCKS: FLEXX, INGUS, ODESIGNS, KK5HY, MONKEYBUSINESS, OLES ISHCHUK, PRESSMASTER, STOCKBUSTERS, DEFSTOCK, SVZUL, JTIMELAPSE, SERGII_KOZII, THE STOCK STUDIO // STUDIO ONE // THE ATLANTIC // THE MOTLEY FOOL // UNSPLASH: NASSIM BOUGHAZI, JACQUES BOPP, SVEN D, THOMAS MILLOT, LANCE ASPER, YAROSLAV ALEXEENKO, HOWARD BOUCHEVEREAU, NABIH EL BOUSTANI, JEREMY PERKINS, SPACEX // WESTINGHOUSE // HYBRIDJUNKIE // SAMSUNG // LGAUSTRALIA // AMERIPRISE FINANCIAL // DUKE UNIVERSITY LIBRARIES // HELP GUIDE // FREEPIKPSD // FORTEPAN: BERKÓ PÁL // DRIBBBLE // CLAIROL ESSENCE SHAMPOOS // CITY OF TORONTO ARCHIVES: GILBERT A. MILNE & CO. LTD. // CHARLES CHAPLIN // CENTERS FOR DISEASE CONTROL AND PREVENTION’S PUBLIC HEALTH IMAGE LIBRARY (PHIL): FRANK H. LUKAS AND HARLEY E. WALTERS // CENTER OF JEWISH HISTORY: WALKER, WILLIAM // CBC NEWS // BUREAU OF NATIONAL LITERATURE, INC. // ARCHITECTURAL RECORD PUBLISHING COMPANY: STEVENS, EDWARD FLETCHER // AMERICAN ENTERTAINMENT PARTNERS, AMERCENT FILMS (20TH CENTURY FOX) // ADRIAEN VAN OSTADE // ADAM CEBULA // CITED SOURCES AND NEWS OUTLETS ARE NOT AFFILIATED WITH THIS PRODUCTION.

Bonus Content

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