Why every single person will be a millionaire by 2100 (and why we should care)
I wrote that every single person in the world in 2100 will be a millionaire (in year 2000 dollars) because if the wealthier people in 2100, “…give only 2 percent of their lifetime income to charity, that means even the poorest people would be able to get a couple million dollars.”
Andrew Reynolds writes about my analysis: “Not quite correct. It really depends on the standard deviation of income. Personally, I believe that the deviation will reduce, so that your analysis is pessimistic. But I know others would argue otherwise. Do you have any justification for the need to only donate 2% of lifetime income?”
Oy vey.
You’re right that I was simplifying, because I didn’t want to take the time to do a careful analysis. The amount of money we’re talking about here is so staggeringly large that there is no need to do any sophisticated analysis.
In 2100, let’s say there are 10 billion human beings…of the hydrocarbon variety, anyway. If world per capita GDP is $10 million, and per capita income is 75% of that, or $7.5 million, the total world income in 2100 is 10 billion times 7.5 million, or an absolutely staggering 75 QUADRILLION dollars. Let’s take 2 percent of just that *one year.* That would be $75 quadrillion times 0.02, or $1.5 quadrillion of charitable giving. To put it in more appropriate scientific notation (since it’s so staggeringly large) we’re talking about charitable giving in ONE YEAR of $1.5 x 10^15. Divide the amount for that ONE YEAR among 10 billion people, and you have…
$1.5 x 10^15 divided by 10 x 10^9 people = $150,000/recipient for that one year.
So even if that 75 quadrillion was earned by a SINGLE PERSON, and every one of the other 10 billion people earned ZERO income, that ONE person could afford to give a mere 2 percent of his income from that ONE YEAR, and everyone else in the world would get $150,000 in that year. If he did that for 6.3 years, they’d have earned $1 million. That wouldn’t make them millionaires, but if they spent their money wisely, they’d be close.
Let’s do a slightly more realistic, but still incredibly conservative analysis. Suppose that single person who earned the $75 QUADRILLION gave away 20% of his income that year, instead of only 2%. (After all, what does one person need with even $60 quadrillion in one year?!) Then, every person in the world would have an income that year of $1.5 million. If they saved 66 percent of that, they’d be millionaires, from that *one year.*
To do an even more realistic analysis—though one shouldn’t be needed at this point—currently, the lowest 40 percent of the world’s population earns only 5% of the world’s income. In today’s terms, that means that about 2.5 billion people earn about $1.6 trillion, or an average of $640 per person (about $2 a day).
Global policy.org analysis of income inequality in the world
Let’s say that in 2100, that same situation holds true…the lowest 40 percent earns 5% of the world income. That would mean that in 2100, about 4.0 billion of the world’s poorest people would earn about $3.75 QUADRILLION, or an average of $938,000 (that’s 938 THOUSAND) dollars per year! (And that’s without any charitable giving from the richer people at all.) THAT’S why every single person in the world in 2100 is going to be a millionaire.
The point of this whole analysis is that the numbers are so staggeringly large, that no real analysis is needed. ;-)
Once again, Thomas Schell’s comment that, “…the descendants of today’s poor, who may be less poor than their parents, but are likely still to be poorer than those in today’s rich countries…” is wrong. Wayyyyyyyyyyy wrong.
And if his HUGE mistake is corrected, it completely obliterates any case that can be made for attempting to reduce CO2 emissions at present or in the next few decades.
