A simple application of the Pareto Principle suggests that 20% of the world population controls 80% of global assets, wealth, or resources. Certainly the report entitled “Wealth, Income, and Power” by sociologist G. William Domhoff supports this notion as does the United Nations 2005 Report on the World Social Situation: The Inequality Predicament. The following graphic conveys this notion:
The 80% that have access to only 20% of the resources make choices about their survival and sustainability within a different economic system than those in the top 20% of the socio-economic pyramid. The diagram below offers further definition of these two economic systems. The 80% participate in a “needs economy” that focuses on delivering the essentials of a life: food, water, air, energy, fuel, housing, clothing, safety, security, health, and education.
Because a needs economy strives to meet the basic requirements for quality of life among people in a given area, it is deemed a local economy in that the participants have extensive social relationships among family, friends, and community members. It is the strength and scope of this social fabric that provides the platform for self-sufficiency and sustainability of the body politic and keeps the door open for a wide range of choices.
In contrast, 80% of the world’s assets are marshaled into the design, production, and delivery of products and services that attempt to satisfy an insatiable demand for everything and anything. A “wants economy” is a most apropos label. And because no place on earth is exempt from the compelling effects of its all-consuming nature, it is truly a global economy.
Choices in a wants economy are limited by the means available to act on those alternatives. The lack of self-sufficiency and sustainability garnered from a global or wants economy requires a heavy political investment—a constant feeding of the bureaucracy—to exercise a level of diplomacy sufficient to assure an uninterrupted supply of essentials. At times, the burden imposed upon society to maintain such a complex and bloated political system becomes too much and a sorely-needed adjustment ensues. But such decline and renewal is inevitable in the cycle of life.
Despite these changes, the basic social units that give our humanity expression—family, friends, and community members—persist. They are the foundation upon which civilization is rebuilt and rejuvenated. In effect, these relationships constitute a vibrant local economy, which becomes the bedrock of survival, sustainability, and quality of life. So at the bottom of the pyramid, it’s looking up!
Originally posted to Open for Consideration on Tumblr by Steve Bosserman on August 19, 2010