I had the idea for this post after a discussion at our local Food for Thought event, where we were discussing possible utopian futures. Thanks to the participants for their input.
How would we, as effective altruists, distribute resources in a utopian world? This question came up recently at an EA discussion event. Our opinions covered a wide range of possible distributions, but we seemed to be on the same page concerning one point: everyone’s basic needs should be covered in order to make the world a better place. We weren't sure whether it would be theoretically possible today to cover everyone’s basic needs for a happy life (to be honest, we also did not agree on what actually constitutes “basic needs”, but that is a whole other topic).
To get a better idea of what would be theoretically possible today, I estimated the average amount of resources available per person. The resulting numbers are likely not new to you, Giving What we Can, for example, uses similar numbers for their “How Rich am I” calculator. However, I found it interesting and helpful to look at these numbers from this angle, so I decided to share my thoughts here.
Just to be clear: I am not suggesting, that in an ideal world all resources would be distributed equally, this is just meant as a thought experiment.
How much can we distribute?
Before I start, two brief disclaimers: First, I am not an economist, so these are just the thoughts of a layperson. I am happy to receive feedback through the comments from people with expertise in this field. Secondly, the aim here is just to get a rough idea of the numbers, not an exact value. This is just a back-of-the-envelope calculation.
To figure out how many resources there are to distribute, we need to look at the total output of the world's economy. In 2022, the world produced goods and services worth the equivalent of 164.16 trillion international dollars. When divided by the number of people on Earth in 2022, this leaves roughly 20,600 international dollars per person. This means if everyone were allowed to consume an equal share of the world economy’s output, this share would be equivalent to goods and services worth 20,600 dollars in the US.
Since these goods and services also include everything typically provided by the state, we could go one step further and subtract the taxes necessary to support a state. As an example, the total tax revenue of the United States in 2022 was 4.9 trillion dollars. If we divide this by the number of people in the United States in 2022, the tax revenue was 14,715$ per person per year. This would leave an equivalent purchasing power of 5,914 US dollars per year per individual to cover what isn’t provided by a state. I chose the US here for consistency, since all the numbers are presented in international dollars. I assume if we optimized for efficiency, the necessary contribution to common goods could be lower than the average tax revenue per person in the US.
Of course, we wouldn't start from nothing. We have already built something in the past and could also distribute the world's assets equally. That would leave everyone with a net worth of 84,718 US dollars in 2022. The net worth of states is not included in this number because it is difficult to find reliable data on it. The best approximation I could find is a report by the IMF that assessed the net worth of 38 advanced and emerging economies . Here, the average net worth of the countries was 21% of their GDP. I don’t know whether this number would increase or decrease if all countries were considered - but since it's the best I could find I am going with it. So, 21 % of the world's GDP divided by the number of people leaves us with 4,336 US dollars of assets per person that would need to be added. However, I’d omit this number, because the assets of states are already used in a (more or less) common manner (i.e. streets).
Problems with this estimation
By this point, you’ve likely noticed that the above can only be a very rough estimate. Several immediate problems that come to mind with this estimation.
- First, it does not include the shadow economy, which accounts for some 15-35 % of the GDP in Europe alone . Including it might add a significant amount to the yearly resources per person.
- The redistribution of assets is also not straightforward. Many assets will be of limited use for individuals, such as factories. Since in this thought experiment economic output is distributed equally anyway, the ownership of means of production would not be useful (other than the ownership of consumables). For this reason, it is unclear what the number of the distributed wealth actually means.
- Another significant shortcoming (especially when it comes to interpreting the results) is that, in a world with resources distributed equally, the output of the economy would probably look quite different. This might well mean that the goods and services worth 20,600 dollars would be quite different from what you could get for this money in our world today. For example, in this world, probably all resources currently used to produce luxury items and goods for the richer part of the world's population would instead be used to build more mundane items for mass markets.
Nonetheless, I believe that such rough estimations are valuable because they indicate the range of wealth and income currently available.
What do these numbers mean?
Let's assume for a moment these numbers are roughly correct - what do they mean? I guess it depends a lot on your perspective. Just looking at the income, 92 % of the people on Earth would experience an increase of their income in this scenario. After subtracting the US taxes, as done above, it would still result in an income increase for 71 % of the world's population. For most people in the richer “Western” countries, this would mean a significant decline in their accessible resources. In the US, for example, this average income after taxes would put you below the official poverty line .
I actually find this somewhat depressing, since it means that we do not only have a distribution problem but also the total amount of resources available is not enough (yet) to cover everyone's basic needs. Of course, the US poverty line is somewhat arbitrary and maybe above what many people would call “basic needs”. However, I would argue that a world where everyone lives below that line, would not be my ideal scenario for a “happy world”.
To me, two points follow from this thought experiment:
- Raising the average. To enable a pleasant life for everyone (especially in a realistic world where total equality does not seem possible or desirable), humanity needs to raise the available resources per person. This could happen either through economic growth or as a natural consequence of demographic transitions seen in developing societies. Both processes are gradual (see for example: Visualizing the development gap) and face various challenges.
- Redistribution of resources. For me charity at its core, is about redistribution of resources (giving, usually does exactly that). I think this calculation shows that redistribution of resources is very important, since even at current resource levels, it has the potential to increase available resources for the majority of people. Another point in favor of redistribution is that there seems to be some evidence that decoupling growth from environmental impact does not seem to be possible , and we operate already at or beyond the limits of our planetary boundaries. Besides all of this, there might even be good arguments to reduce this inequality when concerned with the long term future.
Conclusion & Final thoughts
This thought experiment reveals that even with perfect equality, today's global resources would provide each person with at maximum 20,600 international dollars (before taxes). Whether this seems adequate depends largely on your current standard of living, to me it makes clear that we face two key challenges: increasing available resources per person (while staying within our planet's physical boundaries) while simultaneously working toward better distribution of existing resources. I also think that this has important implications for thinking about humanity's long-term future. While avoiding existential risk is crucial, it's only part of the equation - we must simultaneously work toward both increasing available resources and improving their distribution. Depending on your stance on the Queston about outweighing, a future that preserves humanity at current levels of scarcity might not achieve the kind of positive future that makes existential risk prevention worthwhile in the first place. I would be happy to hear your thoughts on these conclusions in the comments.
A word on the chosen metrics:
For the total output of the economy, I chose the world's GDP in 2022 in purchasing power parity in 2022 US dollars. This number is obtained by calculating the GDP of each country and transforming it into international 2022 US dollars. This means it is transferred into the value of US dollars that the goods would have had in 2022 in the US. Of course this transformation is not perfect but to me it sounds like the right thing to use (instead, for example, to just use the current exchange rate), because what we are interested in here is the real output of the economies of the world and not simply the value of dollars you would get on the exchange marked for it.
I calculated the average wealth by using the total privately owned assets minus all liabilites in US dollars because I could not find this value in purchasing power parity - but I think the latter would have been the better measure.
Thank you for an interesting forum post! In my forum post I present some examples of how to decrease inequality by using taxes and basic income. The best examples there are safety income and basic income that is funded with environmental taxes.
All the best,
Ulf Graf