Degrees of Wealth(jaapgrolleman.com) |
Degrees of Wealth(jaapgrolleman.com) |
The reason why nannies are affordable in China is because those nannies aren't paid very much, and consequently enjoy a much lower standard of living than their employers. In Netherlands, nannies are relatively expensive, but you the employee is much closer to the socioeconomic stratum to that of their employer.
Same goes for the other examples in the article. The author, having a fancy car, modern phone, etc, clearly enjoys a high level of wealth and is able to leverage that wealth to acquire goods and services at a high level. But that only works if there are people willing to provide those goods and services for a price that he can afford. The author didn't mention that the people who provide these goods and services do not enjoy the same benefits of those goods and services: their nanny cannot afford to hire a nanny, nor a Chinese EV, nor a giant smartphone.
The Netherlands has made the intentional decision to reduce wealth inequality and to achieve a fairer society. You can agree or disagree with that decision. But if I had to choose between NL and China, being cast into one country or the other without any choice about where in that society or what level of wealth, NL would be a much better option.
Also, though, I think some of the weird poverty-culture stuff of the Netherlands is just a culture thing. Netherlanders are absolutely rich enough to buy paper towel if they wanted to, it's just a cultural thing that they don't. And air conditioning is a whole cultural hot button flashpoint issue for reasons that have nothing to do with money.
I always thought “third world” countries were trying really hard to improve their economies but just failing for various reasons.
Turns out living in those places can be more than great if you’re rich and there’s actually lots of people in power who are actively trying to increase inequality and maintain a permanent underclass.
Of course what clued me in was the increasing success of that project by the equivalent group of people here in the US.
But you hit on an important point that wealth cannot accumulate unless consumption is disciplined. Sometimes discipline is self-imposed (e.g. calvinists), other times by the organizing authority (e.g. state, church).
In the 2nd type, authority as the source of discipline, there’s debate on the right balance of disciplining the elite classes vs the under classes. This debate will never cease, as long as there are human beings consuming wealth.
The Netherlands does redistribute more, but the main reason China is less equal is that China is a massive, developing country with huge divides between rural and urban areas, and between east and west.
I’m not saying that you meant to say that it’s our first round with this…just pointing out that Americans have significant experience at maintaining a underclass.
Netherlands was the poster child of the "Dutch Disease"[1].
They in some ways could've turned into Qatar (and Norway into Aramco) without the right people twisting a few dials at the right time.
In Canada there are people making peanuts and living very poorly while technically inequality is low. The problem in Canada and other developed countries is excessive taxation of salaries. That's an orthogonal to wealth problem.
I'd argue it's part of the same problem. Salaries are excessively taxed in developed countries because wealth is so lightly taxed. People with wealth have outsize influence in law and policy. They can make all sorts of fancy arguments for why taxing wealth is bad. But money for government services has to come from somewhere.
So regular working stiffs end up screwed.
The Chinese aversion for second-hand stuff is cultural. You don't buy stuff that's been used by someone else because it brings energy from the previous owner.
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It sounds a lot like the author is comparing their small town in the Netherlands to one of the largest cities of China.
In words of E. F. Schumacher: "the maximum of wellbeing with the minimum of consumption"
Degrees of wealth July 11, 2026 In eight years of living in China, taxi drivers or older colleagues loved to ask, “Which is better, the Netherlands or China?”, hoping for a single insightful answer that would explain everything. And now, back as a resident in the Netherlands, people ask the mirrored version: do I miss living in China?
Neither question is easy, because there are so many areas to look for answers in, and they’re clouded by personal confounds. We didn’t just change countries — we also moved from a metropolis to a small town. More importantly, ‘which is better’ depends entirely on how you value what. For a long time, I assumed the Netherlands was the wealthier, more developed country. But that holds only in certain areas, not uniformly.
Living in Shanghai, I used to look down on the archaic technology of the Netherlands — the bank cards, the paper letters from the government, unimpressive infrastructure. But back here, I find the picture is mixed. I miss our luxurious Chinese EV with its battery swap feature, but the Dutch bicycle infrastructure is just so good and (at least when it’s sunny) such a source of joy. So the question is less a question than an area to explore: how to measure ‘wealth’ with different rulers: in money, time, trust, health, luxury, or convenience.
Because the contradiction is that most Dutch people are wealthier than people in Shanghai, but have no air conditioning in their homes. They drive smaller, older cars with fewer features. Public transport is dismal by comparison. Phones are smaller, lower-resolution, and slower — as are televisions. Shops close on Sunday, and payments are still done by cash or bank cards.
The biggest effect comes from the way money trickles down the economy, specifically through a much higher minimum wage. I really felt this when I had to call my Dutch bank: on the website I had to dig hard for a phone number, then join a 15-minute telephone queue to ask a 10-second question, whereas in China there’d be a chat feature in the app connecting me instantly to an employee. There are fewer public toilets, because servicing them would be so expensive here, and nobody is willing to pay for that. A private nanny or cleaning lady is much rarer in the Netherlands — just extremely expensive — and we’re back to full-time home cooking, because eating out is costly, as are food delivery options (which are also sparse and slow).
But people have more spare time to do exactly those things, and they live in bigger houses with lawns, often front-and-back. And because everything is more expensive (both goods and labour), the Netherlands has a way bigger second-hand market — for bicycles, cars, and furniture — not just apps for quickly selling off some stuff, like Goofish (咸鱼), but real businesses built on it. And so the slow pace of life is even embedded in the materials. Things have to be recycled, repaired, or made to last longer. We mop the table with a rag that we wash later, whereas in China we’d use throwaway paper towels. In Shanghai we bought baby products on Tmall or Taobao, reading about the latest generation of some toy or baby camera with AI features, wholly believing those neatly designed pages in the app. Here, my parents still have the toys, crib, and dish I used as a baby — which Hasse now uses, more than three decades later. Both are forms of wealth.
In broad strokes, the Netherlands is a small-scale, low-tech society. Small-scale in that the city hall here has just one window open to queue at, whereas Shanghai has hundreds of citizen service centres, each with dozens of desks. There’s one ATM I know of, and a small library (which, I must say, had a lot of visitors, from young to old). The Netherlands is a very expensive country for most things. Yet China is more expensive if, for instance, you lose your job or get ill. Expensive and cheap, like rich and poor, depend on where you’re standing when you measure.
Perhaps what I see is the frugality of a land that has time, versus the speed and haste of a country that is busy changing, fighting to gain more. So, to come back to the question — I’ll answer it the way I always have. Both countries are rich and poor in their own ways, they’re just different.
Some examples.
- The growth rate of an economy which enacts redistribution policies will be stymied, leading to lesser outcomes for all, particularly in aggregate, but over the long run also for the bottom percentiles. The rough idea is in absolute terms now is one of the best times to be in the bottom quartile basically ever. This is measured in things like total consumption, access to medicines and technology, number of TVs and airconditioners etc. By changing the growth trajectory through redistribution today we improve the lives of todays people at the cost of lowering the lives of future people who would have had their lives lifted by higher amounts of growth over time.
- Redistribution as a form of injustice -- property rights are an important element of a functioning non-authoritarian society, and taking from someone in an unjust (using that word beyond "legal" or "democratic"-- remember the tyranny of majority issue) represents a degradation of society of sorts. There is little difference, in many folks minds, between a mob with pitchforks versus a mob with ballots. The cost of redistribution might be less "justice" in a system. This deters people from viewing the state (city, region, country) as an investible market.
- So long as wealth is able to generate wealth (such as owning an income producing asset) inequality will be inherent to reality. The compounding effect of purchasing assets with asset derived income will accelerate the gap in individual earnings. Making failing bets (hence why gov't bailouts are really bad), and the regression towards mean outcomes (hence why maximizing the bottom half's opportunity is critical), are crucial to the system. And in the US we've essentially done the opposite through bailouts, only hiring from expensive universities, denying certain investment classes only to the elite accredited folks, and by erecting regulatory barriers to entry that disproportionately encumber the little guy in the market.
- Assets buying assets results in increased average price of a dollar of earnings which creates net opportunities for those who transition from employee to entrepreneur. One way to see historic S&P p/e multiples is to see it as the reward for creating a dollar of income stream as being highly compensated today, whereas it was less compensated in the past.
[1]- Particularly citizen's united in the USA context, and any similar issues in other countries
So one way to live a good life is to move to a growth-oriented country in your youth and to a retirement-oriented country in your old age. In this way you get the benefits of both.
“The earliest records of joint-stock companies appear in China during the Tang and Song dynasties” [1].
What the Dutch pioneered were tradeable shares, which in turn massively increased the amount of capital a society could rally from its population.
The concept is exactly the philosophical implications of what a "good" life even is. How you can maintain and sustain a "good" life in a world where everyone else is trying to do the same. How your "good" life will sometimes be in tension with other people's, and how it'll even change for you as you live it.
"Wealth" is a terrible measure of a "good" life, but for some reason it's the dominant one in the modern world.
"Money does not bring happiness" is a trope that rich people would like poor people to believe. I don't think poor people fall for it, though.
A billionaire is not orders of magnitude happier than a millionaire. But a millionaire is much happier than someone who is worried about being able to pay rent, afford food, etc.
Thus, the solution to maximize happiness is to distribute wealth evenly.
No. Living simply is the cornerstone of many philosophies and religions going back thousands of years. Taoism, Buddhism, Christianity, Epicureanism, Stoicism are all pretty aligned on this broad “money does not bring happiness” theme. I tend to think there is wisdom here. You’re not going to win the game of monopoly against the people who already own all the real estate. You win by choosing to play a different game.
Arguably migrant workers working the harvests on farms is similar and bridges the Jim Crow era to now, but that has been more behind the scenes and didn't have the veneer of "tech".
Uber alone supposedly has 1M "independent contractors" in the US. Quick google searches would put them as the 3rd biggest employer in the US behind Walmart & Amazon, if they were actually classified as employees.
Wealth has lots of flavors but usually we mean material wealth.
Material wealth is the items and properties that people covet. And people figured out they can store wealth with money and everyone agreed that money is a fair way to store wealth and use it to transfer ownership of the items and properties people covet. (In hindsight maybe not wisest of all decisions but open for debate).
Material wealth is not permanent. It is consumed. By typing on my iPhone, using it daily, it’s degrading, eventually it’ll not be functional and it’ll be harder to get money in exchange for it. Real estate appreciates in monetary value but that’s an effect of the money system not a natural state of things, real estate actually degrades without real work put in to keep it up, consuming value. Food and fuel are easy to see as consumables, one-time use only.
Calvinists are historically frugal, their theology emphasizes thrift and industry, basically the backbone of capital accumulation - create wealth, but don’t consume it, invest the wealth to create more wealth. This is the bedrock of “capitalism” (capitalism in modern and postmodern age has taken a new meaning, but originally it meant ~using capital to create wealth).
China famously imposed (and still does) very strict discipline on consumption, and they used their excess capital to reinvest for industrialization.
Western economies imposed consumption limits in the continental wars, which enabled a huge surplus of wealth in USA following WW2 because the population was used to the discipline.
Churches (Vatican) accumulate treasures by disciplining their flocks to tithe. Churches in the east were looted by the Bolsheviks to finance their revolution, the eastern church had huge reserves of wealth that was consumed by the revolution. Eventually they had trouble balancing their economy and the holodomor took hold in the wheat belt - the wealth was exhausted.
The soviets eventually established absolute control, disciplined their populations and went on a long run of impressive industrialization and growth - but it eventually toppled due to imbalances in production and consumption, people don’t thrive under strictest disciplines, they grew tired and the economy got sick.
Today, the highly developed nations in the west are wrestling with questions of discipline. Wealth inequality its called. There’s an upwelling of popular sentiment that people want to consume more, and it’s hard not to sympathize with that, Id love to live like the elites do. But from my perspective there’s not much consideration to how much consumption is sustainable or desirable.
The key question from my view is what end does material consumption serve?
Is it for pleasure’s sake alone? Or is it to unlock more human talent? Is it converted to unleash other flavors of wealth such as spiritual fulfillment, thriving families, arts, wisdom? How can a material value be placed on these things in balance with real material constraints? More questions than answers, and that’s sort of the crux of the eternal argument.
Obviously things have gone well in the west, most people live lives of extreme wealth compared to their great-grandparents. Some of that has to do with warfare, some with luck, some with thrift and industry. Maybe that’s about to change, or maybe not. I for one am happy to work harder than most to create wealth, I find work fulfilling, but I am also well compensated for my labor and so I consume more than most people too… the balance happens at the micro-level and the macro.
You're just pointing out that it's not linear, but sigmoidal. There's a range at which small changes in wealth rapidly improve or deteriorate ones life, but outside of that range, being much poorer makes your life suck only marginally more, and being wealthier makes your life improve marginally more.
Overfitting for happiness is actively destructive to people being able to achieve their individual potential.
Assuming future security means affording cutting edge healthcare, this puts you in the 95th, if not the 99th, percentile of the world.
If happiness is only weakly correlated with economics then it is poor policy to use economics as a lever to increase happiness. Life satisfaction, on the other hand, is correlated with economic opportunity. It is also more durable than happiness.
Sorry, but I don't buy this. Equating stress about whether my company's stock price stays about $200 with stress about whether I will be able to afford a meal for my children is simply not on the same level.
Billionaires may choose to be emotionally involved in their financial situation, but a person in poverty has no choice. A bit of mindful meditation will solve the former problem; only money can solve the latter.
Re wealth distribution, that works for a generation or two maybe, but you do need people to actually work eventually. Otherwise you get the Europe situation where everybody wants benefits, 6 weeks of vacation and a 30 hour work week. That's great, but when China and the US are slobbering to take over every industry (or obsolete them, or reinvent them), what are you going to do?
My preference would be better services, and driving the cost of basic goods down to zero.
I love when people use this as an argument. As far as I can tell “the Europe situation” is the most successful model for social and economic governance the world has produced so far.
This of course treats the whole issue in a very technocratic, whiggish way whereas the real disagreements between these groups is not like that at all.
I don't have sympathy for them either. I'm working hard enough to make my own [slightly] more modest life balance and wishing I had some of the toys they do, but I can't afford.