Extremistan vs Mediocristan

In the sermon in this Sunday's mass, the readings of which are about the rich and the poor and handling wealth, the priest quoted three phenomena as reflecting the situation of social inequality today:

One in seven people in such an affluent country as the United States are living in poverty.
About forty percent of the wealth in China are controlled by about one hundred people.
About forty percent of the wealth in Hong Kong are controlled by about one thousand people.

This is in line with Nassim Nicholas Taleb's notion, as elaborated in The Black Swan, that in the modern era, wealth belongs to "Extremistan", not "Mediocristan" as many people assume. The two terms need some explanation. Extremistan is a hypothetical province in which "inequalities are such that one single observation can disproportionately impact the aggregate, or the total". Mediocristan, on the contrary, is a utopian province where individual instances, even the largest observations, do not significantly change the aggregate or the total. Broadly speaking, man-made, social matters such as company size, income and book sales belong to Extremistan whereas physical matters such as height, weight and calorie consumption belong to Mediocristan. To illustrate this, imagine two samples of 100,000 people each. One is a sample of people of different heights. The other is a sample of people of different incomes. Compare the effects on the averages of the two samples by adding the world's tallest person to the first sample and the world's wealthiest person to the second sample. Adding the world's tallest person, a Turkish man with a height of 8 ft 1 in, to the fist sample will only make a minimal difference to the average height of the first sample, but adding Bill Gates to the second sample will certainly have a significant effect on the average income of the second sample. Taleb argues that in modern times, not only are there more domains belonging to Extremistan but also the effect of some very few individuals on the collective is more significant, to the extent that it is almost like "winners take all".

In terms of wealth, my own observation is that in my father's time it was possible for people to accumulate wealth through hard work and saving and narrow the difference between those who were rich and those who were not. Now, the gap is not only much wider but also much more difficult ot bridge. These days most young people have become increasingly frustrated and furious because they see themselves being exploited and deprived of opportunities for upward mobility. Such sentiments, if left unchecked and unchannelled, can potentially threaten social stability. Ruling parties have the responsibility to address such inequalities, but in Hong Kong the government has hardly any determination or commitment to do anything in this direction.

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