Astoundingly, the country in which we are born determines 60% of our income. And then, the next 20% relates to our parents’ affluence.
Here are some answers to other interesting questions we never knew we wanted to ask. All are from The Haves and the Have-Nots.
- Who was the richest person ever to have lived? Probably John D. Rockefeller. Looking at average income figures, the ratio of Rockefeller to the average was 116,000 to 1.
- Compared to the world, how high is your income? Calculating Purchasing Power Parity (PPP-The Haves and the Have-Nots, p. 166), to be in the world’s top quintile, your PPP, $5,000. The top 1%? PPP is $34,000.
- What was Anna Karenina’s upward mobility? Having had modest origins, marrying a successful civil servant elevated her to the top 1% of Russian society. Continuing to climb, her relationship with Count Vronsky took her to a man at the very top. Whereas her husband’s annual income was probably close to 9,000 rubles a year, her lover’s was 100,000.
The Economic Lesson
Through the scholarly side of The Haves and the Have-Nots, economist Branko Milanovic suggests using 3 questions to assess the impact of inequality.
- Identify the cause of inequality. For example, determine whether income inequality increases or decreases as the economy grows.
- Identify the impact of inequality. For example, does inequality create positive or negative economic incentives?
- Identify the ethical implications of inequality. For example, are there good and bad ways to have ascended to affluence?
An Economic Question: Being aware of your bias about income inequality in the US, how would you answer Milanovic’s 3 questions?