Some Moral Considerations of Wealth and Growth

Graph displaying sharp increase in world GDP over last couple centuries after two thousand years of no change.

The chart above estimates the per-capita GDP of the entire world over the last 2,000 years. There are all kinds of problems with estimating GDP over such a long time-horizon, but the only thing that matters for the purposes of this post is the general shape of the graph. At the time of Christ, there was essentially no growth in per-capita GDP. At our present moment in history—and going back to before the Industrial Revolution—there is very, very steep growth in per-capita GDP.

If you live at a time when there is essentially no growth (on a per-capita basis) then you live in a zero-sum world. Generally speaking, the only way to become wealthy in a world like that is to expropriate wealth from someone else. This is true based purely on the abstract math. If there are 100 people and $100 dollars, then for every person who has $2, there is at least one person who has less than $1.

Speaking concretely, the way to get wealthy in the Iron Age was to own more physical stuff, especially land. If you owned land, then you had control over the production from that land, either for crops or for grazing for herds. Since there is only a finite amount of land to go around, you get wealthy by owning more land than your neighbors.

If you live at a time where growth dominates, then you do no longer live in a zero-sum world. In such a world, it is possible to become rich without expropriating anything from anyone else. If there are 100 people and $100 dollars today, but next year there are a 100 people and $200 dollars, then if you have $4 it is no longer necessarily the case that you got your extra $1 at the expense of someone else. That’s the simplified math.

Speaking concretely, wealth in the 21st century is no longer fixed exclusively to land. Other sources include tangible capital that can be manufactured (like robots for building things) and intangible capital that can also be created (like inventions). If you go into your garage and invent something—say, a new mobile system that is superior to iOS and Android—and become fabulously wealthy from selling it, this is a fundamentally different new method for attaining wealth. You literally created value. The idea of wealth creation is the reason that we live in a period of economic growth. When the only capital that really matters is land, there is no way to create new capital (short of exploring other planets). When capital includes things like robots and software, then new capital can be created and used to increase output. This is how GDP (per-capita) increases, and it’s why economic growth and technological growth happened at the same time. The economic growth and scientific progress of the Industrial Revolution are two facets to the same phenomena and are inseparable from each other.

This has pretty clear implications for how we understand scriptural teachings about wealth. Ancient scripture—the Old and New Testaments, Pearl of Great Price, and Book of Mormon—were written in a period of zero economic growth. At this point in time, it was all but a logical certainty that any wealthy individual got their wealth by expropriating it from other people. The connection between immorality in this context is immediate and visceral. If you have more, it’s because you took more. (Or your parents did.) There are some exceptions to this case at the individual level, but generally speaking wealth in a zero-sum scenario is inseparable from deprivation. It is a mistake to naively extrapolate from ancient injunctions against wealth to a modern context.

However, let’s not get carried away here. The fact that it is possible to accumulate wealth in a positive-growth scenario by creating it rather than expropriating it cannot serve as a universal detergent for wealth-laundering. While it’s possible to create wealth by investing or inventing, it’s still often easier and faster to get rich at someone else’s expense. Expropriation happens in the 21st century just as it did in the 1st.

Moreover, modern scripture originating well after the transition from zero-sum scenarios emphatically states that the mere fact of inequality itself—and not only the immoral means by which that inequality came about—is worthy of condemnation. The 49th section of the Doctrine and Covenants was received in 1831—well into the high-growth phase of global history—and states flatly that “it is not given that one man should possess that which is above another, wherefore the world lieth in sin.”

So, we cannot let the wealthy off the hook entirely. It is certainly the case that wealth in a zero-sum scenario is worse than wealth in a growth-scenario because it is immoral on at least two fronts. First, because the fact of inequality is sign of immorality no matter how that inequality arose, and second, because in order to gain wealth in a zero-sum scenario you have to take it away from someone else. In the context of rapid economic growth, only the first of these is guaranteed to apply (although on a case-by-case basis, the second might apply as well.)

There is one final consideration, which is this: be careful in your condemnation of the wealthy if you haven’t considered your own relative wealth. There is rank hypocrisy in American complaints of economic disparity between rich and poor Americans when even poor Americans are very, very wealthy in international terms.

Since God is no respecter of persons, we have no excuse to simply pretend that the world beyond our own borders doesn’t exist when we discuss inequality. The 2019 Federal Poverty Level for a family of 4 is $25,100. I plugged that into a convenient little tool the Washington Post put out and found that it puts you in the 10th percentile in the United States (meaning 90% of Americans households of 4 earn more than you), but it puts you in the 69th percentile globally (meaning that you make more than 69% of the world’s population for 4-person households).

So, before you point fingers at “the rich” consider that—if you’re reading this post—chances are you’re one of them.

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