growth media

We need a bigger cake!

Imagine you’re having dinner with four friends, and your host serves up a cake. Great. Everyone loves cake. When it is cut up into five slices however, it looks like this.

Did I say five slices? You need to look closer – the smallest slice is at the top there, between the green one and the red one. Can’t see it? Shame – that was your slice.

Now imagine you complain and say you’re going to go hungry. “I’m sorry”, says the host, “I see you haven’t got enough there. I clearly haven’t made a big enough cake.” And they do away into the kitchen and come back with a larger one, only to slice it up exactly the same way.

This isn’t a hypothetical cake. The percentages here show the distribution of global household wealth, according to the World Institute for Development Economics Research. The red slice shows the wealth of the top 20% of the world’s population – North America, Europe, Japan, Australia and so on. The richest fifth of people own 85.2% of all the wealth. The little black line is the share of the world’s poorest fifth – less than 1%.

I wrote this slightly facetious example for , but I was reminded of it by Rupert Murdoch this week. He doesn’t speak publicly very often, but made an exception to present the inaugural Thatcher Lecture. You can read the if you’re so inclined. The line that caught my attention:

Without pride, people will not prosper. And without a bigger cake, the portions will get smaller, and the vulnerable will suffer most.

Damn those fools who call for better slicing. What we need is a bigger cake!

These are the small thinkers, who believe their job is to cut the cake up rather than make it bigger.

Well, that puts me in my place. Believing in fair distribution makes me a ‘small thinker’.

Rupert Murdoch owns The Sun, The Times, and Sky TV in the UK, and Fox News in the US. To my mind, that makes him one of the world’s most dangerous people, but at least we now know that he’s only thinking of the vulnerable when he calls for his bigger cake.

8 comments

  1. I guess it is just fine to be a small thinker, for small is beautiful. I’d also quote yours truly here with a seemingly zany but perhaps somewhat “Zen-ish” observation: “You need tho think small to embrace the universe.” Well. The idea is not THAT new. Einstein said “Make things as simple as possible, but not simpler”. That’s pretty much the same as good old Occam’s razor.

    For a reasonable answer ask a four year old about that cake, not Mr. Murdoch. He merely owns the cake and wants to keep it.

    On a more serious level the cake picture is dangerous in itself, because it creates the illusion that money is equivalent to food, while that is only the case for the very poor. Even for a Western European with an average income food obviously is not an issue – not even for a person on social welfare. A better earning person with an income of perhaps 5000 € a month basically has everything he needs – where I live such a person can afford a house, a nice car, vacations twice a year – a good life. If that is inflated to 50,000 a month, life becomes incredibly luxurious for those who desire such things – five star Hotels, Limos, yacht charters and rented tropical islands as a regular, plus that country Golf club and elite schools for the kids. What happens beyond that? I think an income of 50.000 a month I already could not spend without being ridiculously wasteful. Even ten thousand is a hell of a lot. 50.000 seems like a lo of money, but in Germany Bank Managers whined when the income of Managers in Banks bailed out with tax money was capped at 500.000 Euro annually. And the multi millionairs and billionairs – they quite simply cannot eat their astronomically sized share of the cake. And while searching for their motivations to nevertheless keep increasing that share, I pretty much came to the same conclusion as this (how ironic) Times article:

  2. Jeremy,

    Great post! Yea, to add to the problem, if that cake was the Earth (resources, biocapacity, et cetera) it would be able to grow! Yet, we’ll keep adding people to the table, each trying to increase their consumption and grow the economy…. just means even smaller pieces for everyone, the poor most of all.

    Cheers,
    Joshua

  3. To add another puzzle piece to the picture: recently (we are talking 2010 here!) a German fishing industry spokesman declared that it would be “impossible” to overfish the oceans. Like with Murdoch’s cake statement, my scientific diagnosis of this mental excretion is: severe intellectual purulence. But in fact practically everything we hear from industry people must be interpreted in the context of marketing and lobbyism and propaganda and hence not be taken at face value. “They” discredit themselves to an extend that begins to render them useless as discussion partners in democratic processes, which are supposed to search for truth and consensus. In industry PR smokescreening, systematic distortions of facts and outright lies are the weapons of choice.

  4. @Joshua, I think you meant the cake would NOT be able to grow, don’t you? Good point about having to slice the pie even thinner as we ignore population growth.

    Dave Gardner
    Producing the documentary
    GrowthBusters: Hooked on Growth

  5. I’m waiting to see what happens to Western morals when many of their citizens are the ones are getting the smaller slices of the pie. It seems most of those in poverty are now from middle income countries, but what happens when this happens in the richest nations as well?

    I know some already think that the elites -esp in the Anglo countries- are looking to create police states where ‘green’ or equality supporters are the new terrorists. Throw in climate and resource security problems/justifications and I don’t think this is such an extreme position.

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