The 10x principle
Chapter 4
Radically Normal, part 4 of 7 · Series overview · Dieses Kapitel auf Deutsch
In the previous installments, I have tried to establish three things:
• We all bear daily responsibility for inequality in the world.
• Extreme inequality leads to ever more suffering and destruction.
• The problem of inequality has occupied humanity for thousands of years.
So we know that inequality exists and that it brings problems. If we take our responsibility seriously, then we must also ask whether things couldn’t be better.
To that end, I ask you to look inward. Think about what you observe in everyday life. The financial needs of the people you have in mind. The work they do.
And then ask yourself: What is appropriate? What is inappropriate? Does it not matter at all?
If that seems like an odd thing to ask, remember that human societies agree on what is appropriate or inappropriate in many areas: traffic rules, age limits for drinking alcohol, the voting age. Why shouldn’t the same apply to the amount of money a person may have?
Today, the average board member of a company in Germany’s leading DAX index earns around 40 times as much as an average employee costs the company – at top payers like Adidas, as much as 95 times. At the largest U.S. firms, it is nearly 300 times as much. Even more absurd are the disparities in wealth, especially when you look across national borders: a millionaire holds many tens of thousands of times as much wealth as a subsistence farmer.
In my view, performance should be rewarded. But there is a point at which the amount of money stops actually enriching life. Beyond a certain point, wealth – when it comes to one’s own well-being – exists only in your head. It is purely symbolic. And if at that point it still serves a purpose, one has to ask whether a fairer society couldn’t serve that purpose better – or whether the purpose has a destructive effect on society.
Let’s try to approach an appropriate ratio of rich to poor. Imagine you are the most hardworking genius on Earth, with responsibility for the whole world – would it be appropriate for you to eat food that is a hundred times as expensive, or to live in a home a hundred times as large and lavish as another person’s?
Does that still seem too extreme to you? How about the ratio of 4 to 1 proposed by Plato? Too restrictive?
There is no right or wrong here. And unfortunately, no one can say what would be objectively optimal. But if the debates and measures around social justice are to be purposeful, we need a common yardstick. How else are we to calibrate reforms, classify demands, or test claims?
To this end, I propose a yardstick of 10 to 1. The richest person receives ten times as much as the poorest person. That is the kind of ratio that the writer Sam Pizzigati (10:1) and a 2013 Swiss ballot initiative (12:1) put forward for maximum wage gaps. But a ratio like this would apply not only to income, but to wealth as well. And it would not just apply in Germany or the U.S., but worldwide.
Yes, the figure is arbitrary, but my aim here is to illustrate the difference such a yardstick would make. For the remainder of this series, we assume this ratio of 10 to 1 and look at what such a world would look like, why it could actually work, and how we might build it together.
Let me first clarify what the 10x principle covers: wealth, income, and consumption potential. For if wealth is to be capped at a factor of 10 over the long term, then the growth of wealth – that is, income – must also be capped at that factor.
The cap on consumption potential exists because some basic goods are simply cheaper in one place than another. That is why a basket of goods would have to be defined that is equally affordable everywhere for those who have the least. This gives us a yardstick for what claim on goods and services is justified.
The concept of a basket of goods, incidentally, gives us an important hint: money is, as Sen already noted, merely a measure of how well you can eat, where you can afford to live, whether you can see a doctor and send your children to school.
Using a ratio rather than a fixed ceiling does two useful things: the richest can still grow richer, but only if the poorest grow richer too. And it allows more flexibility in accounting for global differences in purchasing power.
If wealth and income were adjusted overnight to a maximum ratio of 10 to 1, what would the world look like?
Calculation:
We begin with the global totals: world gross domestic product (GDP) in 2024 was about 109 trillion US dollars. Total net household wealth worldwide stood at roughly 475 trillion US dollars at the end of 2024.
By “wealth” we mean all financial and non-financial assets – bank deposits, stocks, bonds, real estate, land, machinery, natural resources, and so on – minus all liabilities.
Dividing these totals by the number of adults worldwide (5.5 billion) yields an average income of about 19,800 US dollars per year and an average wealth of around 86,400 US dollars per adult. This is, incidentally, a generous calculation, since GDP does not translate fully into household income but also flows into government consumption, retained corporate profits, and depreciation.
Think of it as a compressed version of today’s distribution: total income and wealth remain the same, but individual amounts per person are simply much closer together. Because we are redistributing the existing total, the global average stays exactly where it is today.
Applying the 10x principle, what would life look like in practice at various points on this scale? Simplified as follows (in today’s purchasing power and purely illustrative):
• Tier 1 – Base (bottom end): With about 9,900 US dollars in income and 43,200 US dollars in wealth, every person would have enough for healthy food, housing, energy, transport, and basic education. Hunger, extreme poverty, and precarious living conditions would disappear.
• Tier 2 – Average (global mean): With about 19,800 US dollars in income and 86,400 US dollars in wealth, this person would sit exactly at the global average and thus be part of the middle class: a car of their own or public transit, modest travel, high-quality medical care, access to higher education for the children, reserves for hard times.
• Tier 3 – Top (upper end): With about 99,000 US dollars in income and 432,000 US dollars in wealth, prosperity would be comfortable but not excessive: a spacious house or apartment, two cars, international travel, high-quality consumer goods, freedom from money worries – but no private jets, no yachts, no media empires of one’s own. And all of it within the limits of what our planet can bear, even as the people at the bottom consume more.
Note: this spectrum would include everyone, even people in the world’s poorest countries. To make it concrete: today the poorest have a few thousand US dollars in wealth, while the holdings of the richest people are valued well beyond 100 billion US dollars.
You can see how wide the gap is today by looking at median wealth – the amount held by the person exactly in the middle of the world’s population. That figure stands today at about 9,000 US dollars, roughly one-tenth of the average of 86,400 US dollars. If the wealth that already exists in humanity’s hands were redistributed within a 10x range, the bottom end of the distribution would have many times more than today – around three billion people would no longer be poor.
Of course, the world’s wealth is not a treasure chest one could simply gather up and hand out. Substantial parts of it are market values based on expectations of future returns. These would fall if one limited the possible returns. But that does not mean the underlying real resources – labor, housing, machinery, raw materials – would vanish at the same time. This point is extremely important: Ultimately, in this model, it is the claims on these resources that are redistributed – the nominal monetary amount is irrelevant.
If we woke up tomorrow in such a 10x world, what would we have lost? Private islands, private jets, private armies, the pressure to imitate the lifestyles of the extremely wealthy, bought elections and TV channels, and the sense of permanent inferiority that accompanies so many today.
And what would we have gained? Universal dignity, sufficient food for all, affordable education, everyday security, basic medical care, and the freedom not to live in constant fear of ruin. The further consequences can only be guessed at. Status matters to people, and always will. And status can be expressed in many ways. But the smaller the resource differences, the less likely it is that society drifts apart in a harmful way – such as one group being able to genetically optimize their children while the other cannot.
I think that, compared with today’s world, this scenario would be a great gain. Financially perhaps not for everyone – not for me either. But for the great majority of people, and for the odd reader too. Admittedly, we are very far from a 10x world today – and in fact we move a little further from it every day.
It sounds so hackneyed that I can hardly bear to repeat it, but many things once thought impossible have, thanks to people’s commitment, become reality in the past. The eight-hour day, the ban on child labor, statutory health insurance, for example.
Whether a ratio of 10 to 1 is exactly the right target is something we can happily argue about. What I want to show is that societies can discuss such equality targets at all.
In the coming chapter, I want to address what is probably the most common criticism of all this – the one that arises whenever someone proposes supposed leveling: the loss of entrepreneurship and innovation.