E23 – Economic Inequality

Episode 23 . 26:55

Episode 23 - Economic Inequality - transcript:

What is up? Welcome back to another episode of Speakeasy English, the number one podcast on the internet. If you only ask my mother. Alright. Thank you for joining me on another episode. Speakeasy English is the podcast to help intermediate English learners become completely fluent just by listening to interesting content, 100% in English, spoken by a native English speaker. That’s me. My name is Brandon. I will be your host and thank you so much for being here and for investing time in your journey to become fluent in English. 


It’s not easy to become fluent. Well, actually, it is easy in a way. All you have to do is create the daily habit of listening to English and just do that one simple thing for an extended period of time, and everyone is different, but you will start noticing your improvement in a matter of weeks. but it will probably take months or even years for you to become completely fluent. So on one hand, yes, it does take a long time, but on the other hand, it’s easy. You don’t have to sit down and study every day. You don’t ever have to sit down and study. You just have to create the daily habit of listening to English and you will automatically become fluent. Your brain is evolved for this task. Trust me. 


Okay, so that’s enough with the intro. Um, very quickly, before we begin talking about today’s topic, I wanted to apologize. Yes, I know it has been months since I published an episode, and I am very sorry for the delay. I really am trying to publish episodes in some sort of regular cadence. That means like every two weeks or at least once per month. But my life has been insane for the last, uh, 7 or 8 months. So, uh, as you know, I have triplets, that is, three children the same age, and they are just now three and a half years old. So, um, we are very, very busy, uh, as well, if you listened to the episode about getting a dog, we have a Doberman. That’s a breed of dog. We have a Doberman puppy that is just now about seven months old. He is big and wild, so we are training him very intently. That means we are putting a big emphasis. We are really trying to train him well. We want him to be like a service dog. We want him to be well behaved and to understand what he is supposed to do. We want him to respond to the commands that we give him. But all of that takes a lot of work as well. We have dairy goats. They are Nubian goats. Goats are a farm animal. And they make the sound “baaaaaa”. Well, I guess that’s sheep, but goats go “baaa” and, uh, and they make milk. Um, as you can tell, I am not very good at making animal noises, so, um, maybe I will stick to speaking English. But anyway. We have goats, and in the spring that is generally in April and May, our goats have babies. Uh, baby goats are actually called kids. That’s the same as, um, human children are called my. My kids are called kids, and goat babies are also called kids. And the goats have their kids in the spring. That means there is a lot of work to do in the spring. We have to milk the goats. We have to give them medicine. We have to make sure the babies are eating enough. Um, there is just a lot of work. And then with the milk, we have to pasteurize it. That means heat it up to, uh, to kill the germs and bacteria so that it is safe for us, for, you know, for me and my wife and our kids to drink. Um, we also make a lot of cheese, uh, which is delicious. But again, all of this is a lot of work. So I’m explaining all of this. Um, basically, I’m just making excuses for why I have not published more episodes, um, in the last few months. But in any case, I do plan to continue publishing as much content as I can. So there’s that. Okay, let’s start today’s topic. 


Now, I wanted to choose a topic that is a little bit controversial. That means something that people have a lot of different opinions about, and something that you might disagree with me on. When you listen to something in a different language and you disagree with what they are saying, you start to create your own sentences and your own rebuttal to say why you disagree. And you start to create those sentences and that argument in the language you are listening to. So it can be an extremely powerful tool for your English. Learning to listen to podcasts about topics where you might have a different opinion, and you might really want to express why you think I am wrong, or whatever the case may be, but I am intentionally choosing a topic that is a little bit controversial, and a lot of people are going to disagree with me. Well, what is the topic today? We are going to talk about inequality, and specifically we are going to talk about why inequality in and of itself is not bad. Oh, I know that sounds crazy, right? Inequality. That means some people having a lot more money and stuff than other people. Inequality sounds bad, right? But I’m going to talk about why I believe the public misunderstands inequality and why that can be dangerous and can actually hurt, progress and hurt the wellbeing of everyone. Alright, let’s get to it. 


So it is a very common perception, uh, a very common opinion that inequality is inherently bad. That means it is bad itself. Like there is nothing good about it. It is just, purely bad. My opinion is that inequality can exist alongside overall economic improvement and prosperity, and improvements in happiness and well-being across the world. I’m saying that happiness and prosperity can increase dramatically at the same time that inequality increases dramatically. So first, I will give you the clearest extreme example that I can give you, um, about why these, you know, measurements like the, uh, the Gini coefficient, for example, measures inequality, um, in different countries. And it is commonly assumed that when the Gini coefficient gets higher, that is when inequality gets higher that it is bad, and that the economy and that the prosperity and happiness and quality of life in that country is getting worse. Well, here, let me give you a clear example. Let’s say that me and you and another person named John. Let’s say the three of us make up a country, you know, a very small country with just three people. But let’s say the three of us are a entire country. Let’s pretend I have $1 and you have $1. But John, he has $10. Now, let’s say John decides to take his $10 and create a company that produces goods that the whole world wants to buy. And me and you, we both go and work at John’s company, and we make more money than we have ever made before. Let’s say both of us triple our money. So now instead of $1, we each have $3. Now John, he owns the company and he obviously made a lot of money too, selling all of these goods to the whole world. He started with $10 and he made ten times as much money. So now he has $100. Now all of us are much better off than we started. Me and you, we both have triple the amount of money we can feed our families. We can pay our bills. Maybe we can buy a house. And John, he obviously has lots more money too. So in economic terms, all of us are much better off. And yet inequality, economic inequality, for example, as it is measured by the Gini coefficient, that sort of inequality got worse. So okay, maybe I’m more jealous of John. Maybe I see his posts on Instagram or Facebook and I say I want to be super rich too. But if we are talking strictly about economics and my quality of life, then I am much, much better off and I am making three times as much money as I ever have before. And even if I do not want to maximize the amount of money that I’m earning, then I can do that too. I could work one third as much and still make my $1, which is what I was making before. So you can measure this in terms of more money or more free time. But either way, I am much better off than I was before. My jealousy of John being super rich has nothing to do with my economic reality. 


So inequality got worse and yet all of our lives got better. So this example shows clearly that measurements like the Gini coefficient, these measurements purely measuring how some people have a lot and other people have less, these sorts of measurements are not focusing on extreme poverty, and they are not focusing on how many people don’t have enough food to eat. But instead these measurements are just focusing on differences in income and differences in net worth. That means how much money someone is worth, how much money, or how many assets someone might own. 


Of course, if the number of people living in poverty or even extreme poverty, if that number gets higher, then obviously that is bad. But that is not what inequality is. Measuring inequality is measuring the wealth gap. That is the difference in wealth between the most wealthy people and everyone else. And my point is that the wealth gap can increase, and yet everyone can also still be better off.


 Capitalism as a economic system includes a profit motive. That means people start businesses, and they risk a lot of money and time to try and build great companies. Because they are motivated by the possibility of making a bunch of money that is making a lot of money. And when these companies succeed, the owners and chief executives make insane amounts of money. Think about Jeff Bezos of Amazon or Mark Zuckerberg of Facebook, or Elon Musk of Space X and Tesla and other companies. These people are worth insane amounts of money because they created extremely successful companies, but because they have amassed so much money, that means because they are worth so much money, that increases inequality, right? Because the average person has much, much less money than these people. Capitalism creates extreme differences in the wealth of the richest people and the wealth of the common or average person. But capitalism has also lifted the vast majority of the world out of extreme poverty. And so capitalism has dramatically increased inequality, and yet it has also eradicated (that means eliminated) the majority of extreme poverty around the world. So again, we have two things happening at the same time. We have inequality getting worse, so to speak, and yet at the same time, quality of life is increasing for the vast majority of humans on the planet. Now, obviously, there are areas that are still in extreme poverty and areas where people do not have civil rights and they don’t have the freedom to speak or the freedom to go to school or work. Of course, these things still exist. But consider this: according to Steven Pinker, who is a researcher and Harvard professor who has written bestselling books and is widely respected –  200 years ago, extreme poverty was at 90%. That means 90% of the world lived in extreme poverty 200 years ago. So, that is, before the Industrial Revolution or just at the beginning of the Industrial Revolution. Now extreme poverty has declined to less than 10% of the world population. That means we went from 90% all the way down to less than 10% of the world living in extreme poverty. And maybe the most surprising part is that in just the last 30 years, extreme poverty has declined by 75%. Meanwhile, inequality is increasing in most of the world. And so again, we see those two things happening at the same time. Quality of life is increasing (as measured by the percentage of people that do not live in extreme poverty). So that’s getting better. And yet inequality on its own is getting “worse”, so to speak. 


So why does this seem so weird in our brains? Well, one reason is because it’s difficult to understand that the economy is not a zero sum game. So, a “ero sum game” is a game in which there are a limited number of dollars or a limited number of items, and so if I have some, that means you cannot have them. So let’s imagine a plate that has five cookies on it. If I eat four cookies, that means no one else can have those cookies, right? Because I ate them. And so I took four cookies. And the rest of you have to share the one last cookie. And so it’s easy for our brains to assume that the economy and wealth works the same way. So if Bill Gates or Elon Musk or Jeff Bezos has $50 billion or whatever they are worth, then the rest of us cannot have that. We assume that is true on some level, but it is not true. In fact, wealthy people having money in the banking system actually creates what’s called liquidity, which allows you and me and, you know, normal everyday people to go to the bank and get a loan to buy a home or buy a car or start a business. Those dollars that you receive to buy a house, those were deposited by other people with money, and so you are actually using their dollars. Again, I’ll give another example. So let’s say I earn $1 and then I spend it by paying you $1 for a service. So now you earn $1 and then you spend it by paying someone else to perform a service. And so they earn $1. And now they pay me to perform a service and I earn $1. And we do this a few times until all of us have earned $5. But actually there is only $1 that we are paying each other. Does that make sense? We used the same dollar, and yet each of us earned $5 during that time period. And so again, this is just to show that because I earned $1. That does not mean that you cannot earn that same dollar . Because I earn money and then I spend money and you earn money, and then you spend that money, and someone else earns that money. It’s the same money. And yet we are all able to continue earning more and more because that money is spent. 


So just to recap, that is, to give a summary, I believe that “inequality” in and of itself is not necessarily bad. What is bad is extreme poverty and poverty in general. What is bad is suffering and war and starvation. Of course, all of those things are very bad, but inequality in and of itself is not inherently bad. And in fact, during capitalist booms, that means when the economy becomes capitalism and it grows dramatically, that generally increases inequality at the same time as it dramatically improves the quality of life for the people that live in that society. And actually, it’s improving the quality of life around the world just by creating a global economy that produces more goods and services and better technology, giving people access to cheaper goods and services and access to things like the internet, which is the sum of all human knowledge. That’s the internet: access to all of the music that humans have ever created; all of the books that have ever been written; even people living in poverty now have access, in many cases, to the internet, which gives them access to more music and books and information than even the richest king had 2 or 300 years ago. In many countries, even those living in poverty also still receive access to better medical care than anyone in the world, including the rich, would have received just 100 years ago. So innovation and economic growth has improved human life around the entire world. And that has happened at the same time that inequality has gotten “worse” quote-unquote. I encourage you all to think deeply about your ideas surrounding inequality. And if you believe that inequality is inherently bad. Ask yourself why and send me a message. Send me an email or leave a comment to let me know your thoughts and at the same time practice your English. 


Alright. Thank you so much for listening to this entire episode. If you find this content helpful on your journey to become completely fluent in English, please leave a five star review that will help other students just like you, to become completely fluent in English. As always, don’t forget to listen to this episode multiple times. Don’t just listen once. You need to listen multiple times. And you can also check out the free transcript on our website, speakeasyenglish.club. That is Speakeasyenglish.club. And if you’d like to send me an email, my email is brandon@speakeasyenglish.club. Alright. Thank you so much. Have an awesome week and we will see you next time. 


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