Aren't most of us rich?

24 September 2010 -- In our home everyone has a room of their own and there are common rooms as well. Our bathrooms are convenient, comfortable environments for sanitation and getting clean. This home was financed via a mortgage wherein we adhered to an older principle (25% of income for home ownership) that enabled us to pay it off a few years early. We have the capability of eating nutritious tasty food every day if we wish. Clothes, books, movies, and music – of any type – are available at a reasonable price without leaving home. Access to the world of news and entertainment is just a few movements away, via methods both convenient and inexpensive. So I have asked myself and others, “In what other age in the history of man, or in what other parts of the world would we not be considered rich?” My own response is, “Very few” and these few are basically those of other modern societies much like our own. I believe an economic analysis of costs would show that the lifestyle described above is attainable for a typical family with a median household income.
So one has to ask, “What factors are creating so much financial stress for typical families”? From personal experience, I offer these candidates: Litigation (having to employ a lawyer always costs more than the value received in return); automobiles (which are one item where technology raises the cost rather than the reverse); insurance of all types (where the insurance companies always take the good side of the bet – that is, they bet you will be healthy, not have an accident, or not die); higher education (where technology also drives up costs); government (where takings have almost [but not quite] always inexorably risen since the introduction of the 16th amendment and the rise of the modern social democratic state); and our own desire for a better life (in which category I place such things as second homes, boats, designer clothes, expensive travel, and an endless variety of other items of luxury ). Here I am not making a value judgment about the items in this paragraph, but rather pointing out that the notion of being rich is relative, and further that by all historical standards almost all people in this country are “rich”. I find my thoughts are centered by considering this perspective from time to time.
To be sure, as those of you who know me know, I have beliefs about lawyers, insurance, government, and the wisdom of pursuing material luxury -- I am sure I will write about these things in good time -- yet to remain “rich” and continue to prosper we must live together and accommodate our differences. In my opinion, accommodation is not well-served by the “pure and righteous” imposing by force and taxation (another form of force) their view on the “wayward and ignorant”. In particular, as a former scientist and applied mathematician, I have a healthy respect for the limits of rational models (like those used in economics, transportation, and the life and social sciences), wherein the error components are substantial, and are all lumped into the term “chance”. Simply stated, a lot of stuff happens by chance, and I prefer it that way.

Thought for the day: It is pretty risky to not take chances.