At this time of year, we often stop to assess our wellbeing in a number of ways. Not only do we take stock of the year that is ending, but we also gear up with new goals for the new year. We also tend to think about our financial wellbeing (partly because we’re spending big bucks to buy so many gifts!).
Here are Five Fast Facts about why economics makes us grateful (or at least why it should):
- ⏲️ Historical Perspective - We are vastly more wealthy today than pretty much anyone at anytime in history. A quick look at GDP per capita in England (which has a history long enough that this sort of comparison is possible) is basically a flat line at barely above nothing for hundreds of years, with an almost vertical spike starting about 100-150 years ago. The average “elite” prior to that lived at a rate we would consider intolerable today. They didn’t even have smartphones!
- ⚖️ Inequality - A lot of people complain about inequality today, but many economists would argue that inequality is actually the result of good progress. In the past, virtually everyone was dirt poor; nowadays, over half the world is “rich” by comparison. Some more than others, of course, but still…
- 📈 It’s A Choice - Bad news will always be out there, but putting things into proper perspective can help us understand the overall trend of humanity’s prosperity - a very steep incline! Even steeper than the recent increase in interest rates!
- 💰 Yay Capitalism - One reason for the “recent” explosion in wealth is free exchange of goods: one person provides a product or service that another person thinks is worth paying for, and both people win! Capitalism rocks!
- 🔮🦆 Standing On Shoulders - Another reason for our current prosperity is the cumulative effect over time of the infrastructure and processes of creating those products and services. Each generation builds on the one before it, and it is future generations who benefit the most. Those lucky ducks!
🔥Bottom line: Given the modern global economy, almost everything depends on a multitude of “unknown” strangers doing their part to deliver goods and services. But that’s how the whole thing works, in cooperation and economic trust, with repeated interactions only furthering the relationship. That results in healthy economic growth, and that means healthy Paychecks for all of us! As we do our year-end assessment, let’s keep this in mind and be thankful for where we are in the grand scheme of things.
How does the historical perspective impact your sense of wellbeing?
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