Mind The Gap

Hans Rosling and the Book “Factfulness”

The book points out that thinking in a binary form overlooks most of the important things. Rich/poor is a poor basis for thinking about economics and society. He similarly condemns the idea of “developed” and “developing” world.

Bill Gates has recently picked up on the same point. Why I want to stop talking about the developing world

Rich and Poor

The Roslings talk about four levels of wealth.

Level one is abject poverty and level four is wealthy. Level 2 and 3 are where people are in transition from poverty to wealth. The rich/poor comparison likely comes from ancient times when people were one or the other. 200 years ago, fully 85% of people would have been in level one.

It works a little like Maslow’s Hierarchy. Level one is deficient in the needs of life. Insufficient water, insufficient food, no medicine. little shelter. Level four has adequate everything. As one level is fulfilled, attention can be paid to the next. Until then, the next is not important.

In between things matter and are often overlooked.

Consider water. When you have too little it is very time consuming to travel and retrieve it. It is not of good quality, so that affects your life and ability to do other things. When you have it, even if it is from a tap on a well in your village, many hours are freed up and the water quality improves. So too does your health. Other incremental gains move people from level one to level two and eventually level three. In level three they have the time and some money to improve themselves and improve their children’s chances of greater success.

We in level four can’t see the value very easily, because we take all of those fundamental things for granted. I am not old enough to remember when there was no indoor plumbing and no city supplied water. For me, roads have always been adequate, food stores competed for business, and the hydro was reliable. I cannot easily imagine the time cost to overcome those.

It is like a client who upon arranging new financing marveled at how little mail you got when you owed no one other than bank. According to him it freed up a day a week because he did not have to deal with creditors and manage cash flow. Thing we take for granted are often very hard to achieve the first time.

Success and failure

You would be wise to discard the succeed/ fail binary decision set when it comes to personal achievement. More likely there are intermediate layers between, and we should notice and appreciate those. Success is often the result of failure. Failure teaches and that moves us on the continuum between the ends.

We in the west are imbued with Aristotle’s logic. Yes/no. True/false. We/they. Aristotle’s Law of the Excluded Middle, is a fine idea for logic and some kinds of analysis, but it is very limiting. We should notice the middle when planning. Fuzzy Logic is more appropriate for analyzing the real world.

No one moves from failure to success in one leap.

Be a little patient. Change and learning don’t happen in an instant.
Planning and mentoring and teaching should focus on the middle conditions. It is the part that can be passed on to others most easily. They will recognize it long before they can see what success is made up of.

No hurry.

I help business owners, professionals, and others understand and manage risk and other financial issues. To help them achieve their goals, I use tax efficiencies and design advantages to acquire more efficient income and larger, more liquid estates.

In previous careers, I have been a partner in a large, international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.

Please be in touch if I can help you. don@moneyfyi.com 705-927-4770

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