Regarding the July 20 opinion article “Navigating the road to riches“: I am not an economist by practice, and my credentials do not come anywhere close to those of writer Otaviano Canuto, the World Bank vice president for poverty reduction. As a historical economics hobbyist, my impression is that the world is a zero-sum game; like water, wealth distribution finds its equilibrium. When one group has more, the rest make do with less.
Right before our eyes, European and American income levels as well as social and public entitlements are dwindling, while developing countries are seeing increasing spending capacity and affluence as never before. It may just be a matter of time before global wealth distribution finds its equilibrium while simultaneously remaining in flux. There will still be rich and poor, but many will be in the “middle.”
The former rich will have to get used to living with less, and the former poor will have to get used to new lifestyles and their attendant problems. And while some might argue that the economic pie is growing bigger, human population growth will tend to negate gains from increases in productivity.
This perhaps explains the “middle-income trap” cited by Canuto. If countries caught in the middle-income trap aspire to have even more, their governments may have to take from the rich and from the poor, which will be bad for everyone.
So, maybe, the middle income trap, as described by Canuto, is not that bad after all. I am not sure if this is the ultimate market correction, but this is definitely part of the balance of nature. There’s simply no escaping it.
The opinions expressed in this letter to the editor are the writer’s own and do not necessarily reflect the policies of The Japan Times.
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