Don’t take prosperity for granted

Jack Cryer

January 18, 2024

Among all species, humans are unrivalled in their capacity to adjust to new circumstances. We are inspired by stories of those who, despite circumstances of war, natural disaster and crime, possess the determination and mental capacity to adapt and continue in new and unenviable circumstances. Yet this evolutionarily useful ability is also the cause of our equally unrivalled capacity to take things for granted. 

This had never been more obvious to me than on a recent trip to Egypt, where I stayed with locals in small farming towns and villages. Cairo is no London or New York, but I was instantly struck by the juxtaposition of having left this relative wealth to find just a dozen miles away towns without a single paved road where children dug barefoot through eight-foot-tall piles of litter, and where donkey and cart were used as often as motorised transport. 

Google search trends show that today we are twice as interested in inequality than we were a decade ago, and perhaps rightly so. But what current discourse misses is the necessary context of this discussion. What I saw in Egypt was a staggering change in standard of living between those who had and those who had not, in the ways which really matter. 

Obviously there are more serious exceptions, but generally inequality in the UK looks like not being able to afford a home with enough space for our family, while others have empty summer homes across the country. It means not being able to go on the same holidays as those who are better off, or not being able to go as often, along with not being able to afford the gadgets or meals we would otherwise like. 

The inequality in Egypt was an inequality of necessities, rather than an inequality of luxuries. In the UK the average person has access to pretty much the same food and technology, and access to exactly the same water, sanitation and online content as the richest person in the country. Inequality in Egypt looks like those in Cairo living relatively well, while those a few miles south live without sanitation, shoes or safe water.

The gini coefficient is a measure of income or wealth equality. While this is a useful statistical tool in some regards, it should be interpreted within this context. Any measure that sets Egypt a dozen places higher in a world ranking than the UK should not be taken as the be all and end all measure of quality of life or economic progress. Equality, even if agreed on as an important policy objective, becomes almost meaningless when reduced to a single number. The distinction between inequality of necessities and inequality of luxuries is an important one.

By focussing on this inequality of luxuries, we often forget the tradeoff between short-term equality and long-term prosperity. We forget how we came out of that world of inequality of necessities. In 1895, more than 25% of Brits lived at or below subsistence level. And think about what subsistence-level living looked like in 1895. Levels of inequality were vastly greater than they are today, but it wasn’t redistribution that gave us better lives.

Increases in standards of living come almost exclusively from innovation: the creation of new technologies made cost-effective enough to be widely consumed. It was innovations such as the flushing toilet, access to electricity, convenient transportation, automated clothing production and the ‘green revolution’ (that brought unprecedented increases in crop yields) which made us rich. If Egypt chooses to foster this innovation, they too will experience this revolution. 

When we unnecessarily stigmatise, restrict and regulate innovative people and companies in the name of reducing inequality and funding programmes which in the short run benefit the less well-off, we worsen their future living standards.

This lack of context affects political discourse. We don’t speak of poverty in the UK in terms of access to electricity, safe water, communication or even entertainment anymore. Today the household ‘poverty’ line is set at 60% of median household income. Poverty is a comparison to those better off. According to this definition poverty can get worse even as objective living standards of the poorest increase. 

When we lend too much weight to these measures of inequality and poverty, and when we slip into examining our issues through a myopic worldview, with little geographic or historical context, we can condemn ourselves to the punishment of Tantalus of Greek mythology: surrounded by water, but thirsty nevertheless. We should of course never be content with the progress we have made over the past three hundred years, but our public discourse will be more cheerful and productive if this progress is paired with a healthy dose of optimism and gratitude.


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