Affluence Today

The excesses of the rich and famous, as well as the rest of us.

Posted Jun 05, 2009

Roughly matching the one billion people living in extreme poverty, there are about a billion living at a level of affluence never previously known except in the courts of kings and nobles. As King of France, Louis XIV, the "sun king" could afford to build the most magnificent palace Europe had ever seen, but he could not keep it cool in summer as effectively as most middle-class people in industrialized nations can keep their homes cool today. His gardeners, for all their skill, were unable to produce the variety of fresh fruits and vegetables that we can buy all year round. If he developed a toothache or fell ill, the best dentists and doctors could do would make us shudder.

But we're not just better off than a French King who lived centuries ago. We are also much better off than our own great-grandparents. For a start, we can expect to live about thirty years longer, in part because a century ago, one child in ten died in infancy. Now in most rich nations that figure is less than one in 200. Another telling indicator of how wealthy we are today is the modest number of hours we must work to meet our basic dietary needs. Today Americans spend, on average, only 6 percent of their income on buying food. If they work a 40-hour week, that means that it takes them barely two hours to earn enough to feed themselves for the week. That leaves far more to spend on consumer goods, entertainment and vacations.

And then we have the superrich - people who spend their money on palatial homes, ridiculously large and luxurious boats, and private planes. There are now more than 1,100 billionaires in the world, with a combined net worth of $4.4 trillion. This net worth increased by $900 billion in 2007. To cater for such people, Lufthansa Technik unveiled its plans for a private configuration of Boeing's new 787 Dreamliner. In commercial service, the plane will seat up to 330 passengers. The private version will carry 35, at a price of $150 million. Cost aside, there's nothing like a really big airplane carrying a small number of people to maximize your personal contribution to global warming. Apparently there are already several billionaires who fly around in private commercially sized airliners, from 747s down.

Recently, a special advertising supplement fell out of my Sunday edition of The New York Times - a 68-page glossy magazine filled with advertising for watches by Rolex, Patek Philippe, Breitling and other luxury brands. The ads didn't carry price tags, but a puff piece about the revival of the mechanical watch gave guidance about the lower end of the range. After admitting that inexpensive quartz watches are extremely accurate and functional, the article opined that there is "something engaging about a mechanical movement." Right, but how much will it cost you to have this engaging something on your wrist? "You might think that getting into mechanical watches is an expensive proposition, but there are plenty of choices in the $500-$5000 range." Admittedly, "these opening-price-point models are pretty simple: basic movement, basic time display, simple decoration and so on." From which we can gather that most of the watches advertised are priced upwards from $5000, or more than 100 times what anyone needs to pay for a reliable, accurate quartz watch. That there is a market for such products - and one worth advertising at such expense to the wide readership of The New York Times - is another indication of the affluence of our society.

If you're shaking your head at the excesses of the superrich, though, don't shake too hard. Think again about some of the ways Americans with average incomes spend their money. In most places in the U.S., you can get your recommended eight glasses of water a day out of the tap for less than a penny, while a bottle of water will set you back a dollar fifty or more. And in spite of the environmental concern raised by the waste of energy that goes into producing and transporting it, Americans are still buying bottled water: to the tune of more than 31 billion liters in 2006. Think too of the way many of us get our caffeine fix: you can make coffee at home for pennies rather than spending three dollars or more on a latte. Or have you ever casually said yes to a waiter's prompt to order a second soda or glass of wine that you didn't even finish?

When Dr Timothy Jones, an archaeologist, led a U.S. government-funded study of food waste, he found that 14 percent of household garbage is perfectly good food that was in its original packaging and not out of date. More than half of this food was dry-packaged or canned goods that keep for a long time. According to Jones, $100 billion of food is wasted in the U.S. every year. The fashion designer Deborah Lindquist claims that the average woman has over $600 of clothing not worn in the last year. Whatever the correct figure may be, it is fair to say that almost all of us, men and women alike, buy things we don't need, some of which we never even use.

Most of us are absolutely certain that we wouldn't hesitate to save a drowning child, and that we would do it at considerable cost to ourselves. Yet while thousands of children die each day, we spend money on things we take for granted, and would hardly notice if they were not there. Is that wrong? If so, how far does our obligation to the poor go?

The Life You Can Save: Acting Now to End World Poverty. Random House, 2009; by Peter Singer.