Capital and Labour

My first salary felt amazing. After years of being a student, suddenly there was real money in my account. It was more than my mother earned as a teacher after decades of work. That was humbling. It made me realise how strange it is that we often define ourselves by our salaries, when in truth, a salary is just the price of labour.

And price is not the same as value.

Price is set by supply and demand. It does not reflect whether the work you do is good, meaningful, or changes the world. It is just a market signal.

I had studied actuarial science, a pragmatic choice. Early on, I went to see a financial planner. Partly I wanted to test the process, since I was working in risk product development and thought I could probably do it myself. But I also wanted to see how someone else would frame my situation.

The thing that hit me hardest was this: I was the asset.

My income depended entirely on my ability to keep working. If something happened to me, the income stopped. Even scarier than thinking about life cover was the thought of being alive but unable to earn, still here, still needing money, but with the engine broken. 

At that stage, I had no dependants. But the idea that other people could rely on my salary, when I had no buffer and no engine outside of myself, was unsettling. That was the moment I understood the difference between capital and labour. Labour ends when you stop working. Capital keeps going. Without capital, you are the engine, and that is a fragile place to be.

The Hard Scrums of Inequality

South Africa is rugby-mad, and I often think about wealth like a scrum. The forwards decide whether you win the match. The backline only determines by how much. In the same way, building wealth is not about flashy tries or quick wins. It is about grinding, unseen work that sets the platform.

First-generation wealth creation is brutally hard. Many South Africans live hand-to-mouth. For them, “delayed gratification” is not about giving up luxuries, it is about giving up survival comforts. In that context, talk of Buffers and Engines can sound tone-deaf.

But if we never acknowledge this and never try to break the cycle, we remain trapped. Poverty compounds just as surely as wealth does. That is why I think of wealth-building as the work of a half-hearted warrior. You do not need to storm every hill at once. You just need to create a little bit of space, enough to start building.

For me, the Buffer is that first space. It is the small emergency fund that shields you from life’s daily chaos. It does not make you rich, but it creates silence in the noise. The Engine is the goal. It is the asset that generates income separate from your own labour. Building an Engine from nothing is slow and often discouraging, but unless we aim for it, we will never get there.

Buffer vs Engine

A Buffer is your shock absorber.

Life does not move in a straight line. Some months you spend more than you earn, other months less. Without a Buffer, those bumps knock you off track. With one, you can keep rolling.

That is why people talk about an emergency fund of three to six months’ expenses. It is not glamorous money. It pays for replacing a tyre, fixing a broken window, covering a surprise tax bill, or helping a friend in need. A Buffer does not make you wealthy. It just means one bad month does not break you.

An Engine is different. Where a Buffer absorbs shocks, an Engine provides momentum.

Engines generate income separate from your labour. They are the assets that pay you while you sleep: a rental room, dividends from a fund, royalties from creative work. For many people, the “Bank of Mom and Dad” plays this role for a while, helping with fees, housing, or start-up costs. But a true Engine is independent. It keeps paying pocket money even after childhood is long past.

The ultimate Engine would be something systemic, like a Universal Basic Income or Community Wealth Fund that guarantees a baseline for everyone. That is when you know your basics are covered, no matter what goes wrong.

A Buffer gives you confidence that you can survive the bumps.

An Engine gives you confidence that you can build a future.

The Structural Fixes

Of course, the obvious counterargument is that not everyone can save.

And that is true. Especially in South Africa, where a small tax base carries enormous weight, and millions live hand-to-mouth. Talking about Buffers and Engines can feel tone-deaf against that backdrop.

That is why structural fixes matter.

We already have elements of support, like social grants. But grants are means-tested, which is expensive in itself. The irony is that deciding who qualifies costs money. That is the elegance of Universal Basic Income. It skips the gatekeeping. Everyone gets it. Those who do not need it simply pay it back through tax. It appeals to the left because it guarantees support, and it appeals to the right because it shrinks the state’s role in micromanaging people’s lives.

The real question is: can South Africa afford it? My answer is that we cannot afford not to think about it. Affording it means wasting less, fixing potholes, keeping the lights on, building competent administration. I like the way my friend Gareth Morgan puts it: good governance is about being good at crises. We need less politics as theatre, and more politics as administration.

South Africa already has a culture of “making a plan.” We improvise. We hustle. We survive. But we also need to create space for families to build steadily, and for communities to compound progress rather than constantly reset.

Yes, inequality here is in your face. Our Gini coefficient is the worst in the world, but it is also the same as the world’s overall Gini. The difference is that here you cannot pretend it away. It is on the streets, in your neighbourhoods, part of daily life. And maybe that is an advantage. It forces the conversation.

If we can combine the resilience of individuals with the competence of institutions, then Buffers and Engines do not just become a personal dream. They become the architecture for a society where wealth is not inherited by a lucky few, but built by many.

Call to Action: Get Your Money a Job

At the end of the day, the mantra is simple: get your money a job.

But before money can work for you, you often need to stop it working against you. That is why I think of First Aid as the starting point (First Aid). Get out of debt. Stop the bleeding. That may mean hard choices, painful trade-offs, and resetting priorities. It means writing down what matters most and breaking it into small, achievable steps.

From there, it is about micro ambition (Micro Ambition). Tiny goals that add up. It does not sound glamorous, but that is the magic of compounding: small efforts, repeated, snowball into something powerful. Money makes money. That is how the system works.

So the path looks something like this:

1. Stop the bleeding by dealing with debt.
2. Secure income, since your salary is the origin of wealth. Labour is the first Ox in the scrum. It takes sweat and red faces to push forward.
3. Build a Buffer as your shock absorber against life’s bumps.
4. Feed the Engine so assets can work even when you do not.
5. Compound micro ambitions into long-term freedom.

The hard truth is that first-generation wealth creation is invisible. Compounding works in three stages. First nothing seems to happen, then progress appears slowly, and finally it becomes undeniable. The heavy lifting is always at the start.

You can fight money, resent it, or ignore it. But that only leaves you at its mercy. The better option is to learn how it works and put it to work for you. Get your money a job

pic: SA Rugby Mag

Obstacles to Capital

Clear and present dangers stop you from building capital. By definition, there isn’t “extra” if there isn’t enough. 

One of the challenges for designers of Basic Incomes, or builders of Pension Funds, is when you should allow access to those funds. Should you be able to borrow money and agree to pay back, from your basic income? Should you be able to cash in retirement money to build an extension to your house or go on holiday? 

Similarly, how do you build capital when everyone around you is living hand-to-mouth? Especially when the need is so raw and so clear. As South Africans, we wrestle with in-your-face inequality, but even though we keep inequality in country-shaped containers, I don’t think moving to another container absolves you of responsibility. 

But what responsibility? How much should we just focus on the things we can control? The idea of being a “half-hearted fanatic”. You don’t want to be a martyr. It is a long-term game, and you can give more if you look after yourself too. You do need to be honest about what incentivizes you and keeps your energy up. 

I don’t think you can live in isolation and only focus on your story. Our stories are intertwined. Gradually, my reading on “learning and happiness” shifted to learning more about Universal Basic Income. The idea that everybody should get a regular income as a base from which to work.

Hard to grow without protection

Where You Are

I lived in the UK for 12 years. When I arrived, I admit I was skeptical about the idea of poverty there. The UK is a rich country. There is a tendency for us to only care about the poverty we can see. 

South Africa is notable as the worst country in the world for inequality, and yet it is only as unequal as the world-as-a-whole (using Gini Coefficient as the measure). What is considered poverty in the UK is very different from South Africa. 

By the same token, my eyes would be opened by going to South Sudan. A friend of mine’s job was removing bombs there! 

I gained some appreciation of UK poverty when I was in the US, walking (probably unwisely) around areas of Chicago, and it definitely felt like poverty. It felt like Apartheid. 

Poverty is scarcity. When a single thing starts taking on your full attention. When you have to focus not on choice, in the context of all your decisions. The immediate becomes so important nothing else is relevant. Even a financially wealthy person can have time poverty, because they no longer have choice in their moments. 

It was an eye-opener to see tough, difficult to solve, poverty in rich countries. 

I went to a play in London where the actors paused and took suggestions from the audience, and re-acted. A theatrical version of the film, “I, Daniel Blake”. Where the wheels (illogically for those watching) fall off. “If only they had done [this]”. The punchline being that it is almost meaningless to suggest alternate paths to someone not in your situation. 

We don’t see the same. We can’t see the whole situation, and make decisions FROM where they are.

poverty

Bubbles

South Africa is the most unequal economy in the world. It is also not an outlier. How can those statements both be true? We keep our inequality in containers. The Global version is wrapped in national flags. It is as bad as South Africa’s. 

People just don’t have to look at it. Politicians don’t get voted in and out based on it. Inequality is more comfortable when it is hidden and vote-free. 

Apartheid did the hiding with hills and distance from the highway. I grew up in Kwa-Zulu Natal where the N3 stretches from Durban to Johannesburg. You could drive easily from bubble to bubble. 

South Africa of 2021 wears its inequality much more rawly. There are lots of uncomfortable conversations about different capacities to create capital. Different sources of financing to invest in skills and knowledge. Different abilities to work from home and deal with gaps in basic options to earn. “Same storm. Different boats.” 

The most obvious current example of inequality is the rich country vaccine rollout, and the different impacts of lockdowns. The challenge we face going forward is chipping away at the barriers that hide potential.

Understanding Incentives

The world is getting progressively (but bumpily) less racist, sexist, homophobic, and classist. We are breaking down barriers, but we still have hierarchy. The concept of people being better and lifting groups of people. The directionality of that is interesting because living a simple life can be a choice. There is a story of Alexander the Great out empire building and he comes across a sage sitting on a rock. The one doing external work. The other doing internal work. The Gini Coefficient measures inequality. A Gini of Zero (0) in a two-person world would mean Alexander and the Yogi had the same. One (1) would mean Alexander had it all. If we shared everything, there would be no incentive to get more because it would immediately be watered down (particularly if it was among the 7.8 billion people on the planet). We want to have a sense of reward for what we do. Conspicuous reward. Well done, here’s a gold star. Here’s some money. That’s how we do incentivization. You do something. You get measured against other people. You do something more. Understanding what we do, starts with understanding what incentivizes us.

Gini Coefficients by Country

Pick a Box

Wealth is created in boxes. The key challenge once you understand a problem, is understanding the box. The box is so important, that sometimes it is better to start with a box. Pick a box with money in it... then start looking for problems to solve. The box defines the shape and form of supply and demand. The barriers to entry. The barriers to exit. Who makes the rules? Who can compete? Who are you serving? One of the key measures of inequality looks at equality within the primary wealth creation box that we use. Nations. The Gini Coefficient would be 0.00 if everyone had the same, and 1.00 if one person had everything. South Africa is the worst box in the world (estimates of 0.63-0.70) and yet is at the level of the global income Gini coefficient (0.61-0.68). Our biggest box is as bad as our worst box. There are boxes within boxes... but one of the best ways to open opportunity is to chip away at barriers to entry and exit for the four freedoms (Goods, Services, Capital... AND People).

Sparkling Inequality

Most people I know plan their finances in a bubble. Bryan Caplan points out that “normal people say what other people do, but do what other people do”. This is where the concept of Champagne Socialism comes in. When there is a stark disconnect between spoken politics and lifestyle. Consistency is ridiculously challenging. It can be paralysing because the task is tall. If you believe the world needs to consume less (climate change), the median GDP is roughly $10,000. I am not saying that number is a perfect measure, but if you believe we should consume less, do you believe you should not consume (personally) more than USD 10,000 a year? My friend Galeo talks of being a Half-Hearted Fanatic. Martyr’s do not survive. The median adult income in the UK is roughly $24,000 (adjusting for prices), and in South Africa it is about $4,750. If we are all aiming to consume sustainably, how do we nudge towards that goal? Our bubbles bump each other in our bigger bubble.

In Your Face

South Africa is the world’s most unequal country. It is also only as unequal as the world. This is only possible because the primary tool of Global Apartheid is Nation States. While it has become less and less acceptable to discriminate opportunity by race, gender, and sexual preference, “where you were born” is still a legal tool of hereditary privilege and apartness. According to Bryan Caplan’s book “Open Borders”, we are willing to pay a Trillion Dollars in economic handcuffs to restrict the free flow of labour, goods, capital and services. The biggest loser in the restriction of four freedoms is people. I am a Soutie. One foot in South Africa and one foot in the UK. In the relief programs for 2020’s forced time to reflect, unemployed people in South Africa received R350/month (about £15). The furlough program in the UK saw about 7.5 million people receive 80% of their salaries. Capital Controls make it difficult to even send Unconditional Cash Transfers. The contrast is stark. I only see that because my eyes and heart are on both countries. South Africa takes the world’s inequality, squashes it, and shoves it in your face.

Different Sources

You can’t build an Engine without a source. I picked a source from the menu. But not everyone has the same menu. I got a two-year work-travel visa in 1998-99 and considered my options while working as a waiter, night-porter, and teaching assistant. In the UK, the Jobcentre is part of the Department for Work and Pensions and delivers working age support-services. Helping with the menu. The National Minimum Wage is increasing to £8.72/hour in April. At the moment, that is about R170. Close to a day’s wages in South Africa at the lower end. Many things cost less in Rands, but being a Soutie (one foot in SA, on foot in the UK) punches you in the face with Global Inequality. The Gini Coefficient measures inequality. South Africa takes gold at 63% which is the same as Global Inequality (Lafuente, 2006). The worst country is the world’s self-portrait. Conveniently hidden by borders, distance, and Global Apartheid.

Solid Foundations

Consumption Inequality bothers me more than Income or Wealth Inequality. Scarcity is a reality. This highlights Conspicuous Consumption in a world where a Billion people still live on less than $2 a day. Most people live hand-to-mouth. For most people Income is a proxy for Consumption, and few have the ability to build Wealth. Some have the ability, but not the desire or discipline. You can live a debt-financed life where your consumption exceeds your high income, and still have negative wealth. Building sufficient Capital to finance your consumption detaches the power income and wealth have over you. It doesn’t mean you can do anything. It forges internal resolve and the ability to respond. Reduces anxiety. Gives perspective. If you have a secure base powering your endurance, and the resilience to adjust, you are in a fundamentally different place from constantly hunting for the next meal. I don’t think fear for survival is a motivator for the kind of creativity that inspires. We build from solid foundations.

Gapminder.org

The Number

The size of Engine you require depends on the lifestyle you are wanting to finance. In 1930, Keynes predicted (because of improvements in productivity) we would only need to work 15-hour work weeks. That productivity did arrive, but we don’t want 1930s lifestyles. A 2020 lifestyle in a rich country costs more. In the bubble I worked in, lots of people spoke of “The Number”. An Engine size they thought they needed before they could take a shot at going on their own path. My Number was significantly lower than the ones thrown around. Many of my friends would not want to make the choices I make. When I say I don’t want money to constrain my choices, I don’t mean having so much money I can do anything. I mean defanging money by self-imposing constraint on my spending. This limits my choices. Within those limits, there is still a world of possibility. I am not a Martyr. That world still excites me. But it does mean “can’t afford it” is a real thing. Yes, I could make different trade-offs, work on things that make money to move those constraints. That is a privilege many others don’t have. Bigger, better, more is a valid choice. I am choosing differently.

Transitions

Hans Rosling divided the world up into 4 income levels which he argued were more useful than the traditional Developed-Developing perspective. I am interested in the transitions. How does someone get from Level 1 to Level 2 ($2), 2 to 3 ($8), and 3 to 4 ($32). A challenge we face is that the first step of building a business is finding a community (with money) with a problem you know how to solve. Money attracts problem-solving through supply and demand. 1 Billion of us consume more than $32 a day, and the majority of money will be directed at solving our problems. Putting cash in the hands of the Billion people who consume less than $2/day will suddenly make solving that set of problems a bigger priority. The best decision-maker of what problems need solving would be the person with the problem. The best provider of a solution is likely someone who has recently had the same problem. Not someone projecting their Level 4 “competence” onto a world they know little about.

Pop the Bubble

A Universal Basic Income is a periodic payment delivered to all on an individual basis without means test or work requirement. Without Capital, a Basic Income would need to be redistributory. It would be paid upfront to everybody, and then claimed back at the end of the period from those who conspicuously demonstrate their wealth (income, assets, consumption). It would not end inequality or remove incentives to work for more, but it cuts out the middleman and expenses in providing an absolute floor for financial poverty within a given community. Sometimes the best way to solve a problem is directly. With Capital, a UBI can be viewed as a dividend on common wealth. A UBI, like a share, becomes an inalienable slice of ownership in society. One path to this is National Governments. Another path is Community building. People coming together from the bottom up to voluntarily build the kind of Communities they are proud to be a part of. Ignore borders and bubbles. Build relationships. Build Community Wealth Funds. Empower yourself and others in a practical and tangible way. Move forward.

Same Thing

A good rule of thumb for if Capitalism is working is whether the same thing gets cheaper. If it doesn't, something is broken. Capitalism is awful at things that can't be counted, but great at empowering things you can't count by focusing on things you can. It is great at asking easier questions. Not all good ideas are good business ideas. Capital can work on the good business ideas, so you can labour on good ideas.

Four Horsemen of Apartheid are Housing, Education, Transport, and Work. 

A House is a thing. It isn't an asset. An asset generates an income stream, and can grow if there is the opportunity for reinvestment. A House is only an asset if you rent it out to someone else, or use it to generate income in some way. Houses should get cheaper. They haven't. Something is broken.

Education is a thing. Particularly the kind that is designed to put food on the table. Gradually the industrialisation of Education has meant we need to focus on STEM subjects (Science, Technology, Engineering and Mathematics) because they make the money. That kind of education should have gotten cheaper. It hasn't. Something is broken.

Transport is a thing. It isn't valuable in and of itself. It facilitates activity. If you spend most of your time getting to work, or can't afford to go to where the work is... something is broken.

Work to survive is a thing. Industrialisation of work has meant we focus on one aspect of the production line. The key difference between someone who is financially independent, and someone who isn't, is reinvestment. If you are living hand-to-mouth, then there is nothing left to reinvest. It is hard not to be defined by your work, because it is likely to be all-consuming. Yet, the vast majority of people don't get to choose work that is fulfilling and creates meaning. They choose work that lets them put food on the table. They spend their time in silos of work that increasingly separate them from others doing other tasks. If you work to consume, and yet there isn't increasingly a gap... then survival isn't getting cheaper. Something is broken.

I am very much a Capitalist. I just believe in a world on the other side of the looking glass where everyone can be a Capitalist. A Capitalist means we have Capital that can do the work that pays. This means we don't have to figure out the incredibly difficult question of how to monetize everything. The answer may be you can't. 

Money is just a form of communication. Like numbers, words, painting, music, and touch. Money requires you to be able to articulate a problem clearly. An ask and an offer. It then requires a container you can pop that problem into that allows you to charge for it. Quality Journalism used to have the container of Newspapers that could sell adverts. Enter Search and Social Media. Container gone. Need no longer met.

The answer may be that we need to ask easier questions. Community Wealth Funds, Sovereign Wealth Funds, and Engines of all shapes and forms can focus on the good business ideas. Then set other good ideas free. Capital can be the breadwinner so that we can be the life makers. 

Maybe we shouldn't be trying to make money from these Four Horsemen?

Four Horsemen

Price Tag

If you need something now, it doesn't matter if you know a place where you can get it cheap. It matters where you can get it now. It matters if you can get it. As a Soutie (someone with one foot in England and one foot in South Africa), one of the harder things to wrap my head and heart around is Relative Poverty. In terms of Global Poverty Criteria, virtually no one in the UK lives on less than £4 a day. That is about R72 a day. 80% of South Africans live on less than R3800 a month. That is roughly R125 a day. Those numbers aren't that helpful, because they only talk about the ins. They don't talk about the outs. About 20% of the people in the UK live in poverty with measures looking at ability to eat, heat a home, and have a roof over your head. At the quality of schooling. At the life opportunities.

Money is smoke and mirrors. You can earn a lot more in London than you can anywhere in South Africa. If you want to feel poor though... go to London. Even if you think you are reasonably well off. In Langa, an area of Cape Town where 72% of families of three live on less than R3,200, there is still an awesome buzz. There is a cricket field and hockey pitch that has generated National Sports stars. Not to downplay the poverty challenges. The resilience and energy in these places despite permanent Great Depression Level unemployment is in equal parts heart-wrenching and inspiring.

Communities have price tags. Friendships have price tags. It is why as things stretch, it becomes harder and harder to make friends across income lines. It is genuinely not unusual to spend £50 a head in the UK on a dinner with friends. To maintain friendships, it can be hard/impossible to be 'one of the crowd' if you don't. That is R900. For one meal. One meal. One. Except it isn't. I couldn't buy a meal for Rands in the UK. 

The problem is... I could send that money to South Africa. In a Global world where Capital, Goods, and Services can flow freely... it is the flow of people that is more tricky. People are ultra-local. We aren't ones and zeros that can be swapped between places in a line of banking code.

This is more an observation than an answer. I find it difficult living on two sides of a salty pond. Yet on both sides of the pond, that same inequality is on display. South Africa's is more in your face. As a country gets richer, they get more adept at hiding their difficulties. The difficulties don't disappear. Get "richer" doesn't matter much if part of the reward is an increased price tag. That is the problem with goals being based on numbers.

We need to get better at looking through the noise. At the dance between what comes in, and what goes out. 

Strand/Somerset-West and Nomzamo/Lwandle
Photo: Johnny Miller

Stupidity Tax

Conspicuous Consumption is a stupidity tax. Conspicuous Consumption is the lavish spending of money for the express purpose of demonstrating that you have the (appearance) of money to spend. Normally, it is associated with "New Money". It can be debt-financed (big car, big loan), and is seldom sustainable.

It doesn't bother me as much as Conspicuous Hoarding. Both thrust wealth, income, or bad financial planning, in the face of people with much less. Both are a way of wallowing in luxury while others are struggling to survive. The difference is that Hoarding actually gets in the way of other people. Hoarding is of the Needs. Consumption is of the Wants.

So if someone wants to pay a Gazillion Dollars (the record is $450 million at the moment) for a painting... nothing is made or destroyed. The painting simply changes hands. Conspicuous Consumption is a way of firing your money rather than investing it. It works for someone else, and you consume any rights. On a smaller scale, the same can be said of excessively fancy clothing, nights out, or anything else that doesn't stop anyone else from being able to survive. Say you buy a bottle of 1869 Chateau Lafite-Rothschild Wine for $232,692, it is still just a bottle of wine. No physical cash is even likely to change hands. It will just be a swap of 1s and 0s in the code of a bank. Maybe the same bank.

A form of Conspicuous Hoarding is NIMBYism ("Not In My Back Yard"). When people oppose a development that will benefit the community, because it has some negatives for them personally. Even though they have more than their fair share. Conspicuous Hoarding is when not everyone has even nearly enough... and you insist on your big slice of the pie. Water is another example. If you insisted on continuing to have baths, when you were living in a City with dramatic water restrictions... that would be Conspicuous Hoarding.

Money isn't a thing. It is smoke and mirrors. You need to look through the clouds to see what is going on behind the scenes. That is what really matters. Don't be fooled by what you see. 

$450 million picture

Salvator Mundi

Entry Ticket

When I stopped working for money in 2014, I had to dramatically cut my expenses. The reality is working is expensive. In the line of work I was in, I had to live in a Global City (London). Rent is more expensive where everyone else needs to be. There is the cost of commuting and the cost of looking the part - suits, etc. You tend to be time poor - so less home cooked meals from scratch, and more paying other people to do things for you.

An overlooked expense is the 'Entry Ticket' cost of your circle of friends and colleagues. In London, a pint of beer will cost around £4 or £5 minimum. A fairly standard meal with a friend will cost at least £20-30 if you are being frugal. 'Thinking in Rands' was really hard when, as a Soutie, I returned to the UK from South Africa.

I am very conscious of the idea of Conspicuous Consumption. In South Africa, 80% live below the Living Wage level (R3,807), 55% of people live on less than the Upper Bound Poverty Line (R1,138), and 40% live on below the Lower Bound Poverty Line (R758) (africacheck.org). As a Soutie, it is easy to say the "Entry Ticket" in the UK is higher. Those figures in pounds, depending on the exchange rate, are about £200 a month for a living wage, about £60 for the upper bound poverty line, and about £40 for the lower pound.

So it is difficult to meet a friend for dinner in London, and spend less than 40% of people in South Africa live on for a month. South Africa is famous for its inequality. The 'World Champions'. But the World is equally unequal to the most unequal country in the world. We just think, and justify, locally. In a connected world, you can send £40 to someone in South Africa in less time than it takes to drink a £5 pint. And South Africa is not even close to the poorest country in the World.

Even after stopping work, there were various expenses I couldn't cut... and remain connected to my community. The Entry Ticket prices remain. My family is scattered on each side of a big pond. I have friends all over this rock we live on. I don't want to not see them again.

I am thinking aloud. This is not something I have solved. I like the idea of being a 'Half Hearted Fanatic'. There is no point in being a martyr. That is quite selfish in fact. To be the most use to people, you have to look after yourself. You also have fixed expenses you have no choice but to pay without the tough decision of cutting yourself off. Equally, we need to chip away at the poverty in the world. My chosen focus is learning about Universal Basic Income, and Community Wealth Funds. I was able to empower myself by building sufficient Capital to pay myself a Basic Income. Sufficient Capital to free my Labour. This Basic Income allows me to focus on issues that are difficult to communicate, and hard to monetise, but close to my heart.

Money itself is smoke and mirrors. What really matters is the difference between what we create and what we spend. Reinvestment and building. If you earn £10,000 a month and also spend that, you are as far from Financial Security as someone who earns R3,800 a month, and spends that. Perhaps further because reducing your spending has "Entry Ticket" costs. In theory, you can move to a cheaper country. In theory, you can move out of your neighbourhood that has become increasingly expensive to live in. In theory, you could quit your job and go live in an Ashram and teach Yoga. Spend next to nothing completely inconspicuously.

But gaining Financial Security is not a simple case of picking a new life from a menu. It is a tough, social, and emotional journey. It is a communal journey. It is about asking tough questions about how we spend our money. Tough questions about how we spend our time. Tough questions about what we expect of people, and what we offer. I believe the tools are there to solve these challenges. The hardest questions are internal ones. Why if the tools are available do we spend so much time shouting at each other? Why are we trying to burn things down rather than build things up?

I believe the way to end Poverty is directly. If we can figure out how to finance the bare minimum to allow everyone to participate in society. To participate in a connected, interdependent society. This is not a Utopian Ideal. We have a painful history of Imperialism, Slavery, Mercantilism, Nationalism, Feudalism, Fascism, Communism, Laissez-Faire Capitalism, and various other ideological feuds to learn from. We are slowly building institutions, laws, and constitutions that treat people better and make us work as better Custodians. We fail. We learn. We change. We cooperate.

We can look around the world at Best Practices. We can learn from each other. We can get better at listening. The tools are here. The intent is here. We are getting better at communicating. We are getting less prejudice. Our eyes are being opened to the people beyond our horizons we are connected to.

Let's take what we have learnt, and build.

Dancing with Algorithms

We spend a lot of time trying to earn our place in the room. The idea of meritocracy is that inequality is acceptable because some people are fundamentally better than other people. Respect, status, and how people view us are such important drivers, people would often do worse in absolute terms, as long as they are doing better than those that surround them. One of my glass half full hopes for Artificial Intelligence is that AI plus *anyone* will be smarter and more effective in traditional 'meritocratic' ways than *anyone* by themselves. Imagine everyone had a very personalised AI coach/assistant with the primary goal to empower them, without disempowering anybody else. That is in equal parts very scary, and very exciting. The whole way we look at the world in terms of what drives us would be challenged. It would no longer be about being better than anybody else as better would lose its meaning. AI would provide the Algorithms. The steps we need to take. We would do the dancing, add the emotion, and create the meaning.

Burn

When we think of inequality, we often mean difference in income. Normally within a particularly Nation State, ignoring the rest of the world. This hides all manner of evils, and (as is the case with all numbers) is a better question than it is an answer. On top of your Income, how much you earn each month, there are a few other useful ideas. Your Burn is how much you spend each month. Your Buffer is if you have enough invested to stop earning for a bit. If you aren't living hand to mouth. Buffer/Burn gives a rough number of months breathing space. A Buffer becomes an Engine when your investments sustainably earn more than your Income and your Burn.

Someone with a very large Income may have an even higher Burn which is debt-financed. This is the opposite of an Engine - the debt means they have to work to pay the interest! Any (poorly designed) estimates of wealth inequality would say they are in poverty. Except, normally to borrow money, you need to prove you don't need it. Debt just keeps people working.

A Swami living in an Ashram with no Income and a very small Burn may have a modest Engine that makes this life both sustainable and fulfilling. The Swami doesn't have to do anything.

In some ways, people with a very low Burn are best positioned for Financial Independence. Cutting back is emotionally difficult. 

Burn

Abundance v Scarcity

1801 Map of the World - Mercator Projection

Economics is the study of scarcity. In a world with limited resources, how do we maximise the production, consumption and transfer of wealth for the best possible outcome? Times change, and change dramatically. In 1800, the world's population was less than 1 Billion. Resources were abundant, what we needed was scarce. It is now at 7.6 Billion, and some estimates see us topping out at around 11 Billion. Parts of this explosion has come from massive changes in how much stuff we can make, and how well we can deal with death and diseases. The question of how can we grow enough, shifts to what is enough?  The mindset is completely different. Saying I have enough, allows you to shift your attention to others. Rather than production, consumption, and transfer... study shifts to sustainability, custodianship, and interdependence. Learning to thrive. Learning to share. The study of Sustainable Abundance.

Authagraph Projection