Why We're Getting Poorer by Cahal Moran: A Deep Insight Into Unfair-But Hidden Economic Burdens

Inflation and how we’re wrong about the right solutions

Inflation, defined as ‘the general change in the price of goods and services in a given country over a period of time’, has always raised big questions in my mind. The other day, in my Economics class, the teacher was explaining how inflation works, when one student raised her hand and said ‘why don’t we just print more money?’. I was aware that this couldn’t be a solution, and that there are reasons why the governments and international organisations control how much money is printed and for what reasons. However, I found myself with no useful argument. Moran explains printing more money as a solution to inflation as ‘changing the measuring stick to make yourself taller’. You may feel taller, like your dreams of being a basketball player may finally come true, but it’s not going to change how tall you are. Your friends may do the same, so you may all be taller ‘in theory’, but in praxis–spoiler–you will be the same height. 

This is similar to the hyperinflation that developed in Germany in 1923. The government thought that they could pay striking workers in the Ruhr, who weren’t producing anything for the population, by just printing more banknotes. This resulted in disaster: prices shot up, and a middle-class family who could pay a house in 1921 couldn’t afford to buy a loaf of bread just two years after. Moran uses Freddo as an example of the impact inflation has on different products, raising its price from 10p to about 35p. Nevertheless, while this was a scandalous event in the UK, and caused many people to stop buying it altogether, there are many other products that have suffered the same. For instance, according to ‘Insee’, meat prices in France increased 14% from 2021 to 2022. But if we can’t print more money, surely we can solve this by cutting government spending on public services and financial aid…right? This will reduce the national debt. But, as Moran points out, if a child has lower-quality education, although it may save the government money in the short-term, when the child grows up, he is more likely to be unemployed. This means the government will spend more money on financial aid, like public shelter or soup kitchens for that grown-up version of the child, and will later receive no money in taxes as that person receives no monthly salary, therefore being unable to reinvest in public services. This results in an endless loop that not only disfavors the population, but the government, and thus, the whole economic system. So no, neither printing more money nor austerity are valid solutions we should encourage in our society, whether it’s as economists, politicians or high school students writing articles in a website.

The connection between economics and politics

In ‘Why We’re Getting Poorer’, Cahal Moran talks about the importance of making ‘sure we are seeing the broader picture’. Economics is never just ‘the narrative that things are actually getting worse’, as he put it. It is a combination of factors like politics, time and personal context, and we are often in danger of believing economics is just a single story or idea happening at once. 

For instance, although he warns that the growth that comes when a country adopts a capitalist system is unsustainable, he also states that capitalism isn’t a crime comparable to colonialism.Throughout the book, it is observed how he considers both sides of the story before criticizing one or providing a solution, which in my opinion, offers a deeper, unbiased (or less biased, at least) understanding of the topic. This is seen when he relates events like Trump’s re-election in 2024 to Americans’ hopelessness and lack of faith in their economy despite the numbers indicating otherwise. Although it was a long time ago, we can link Hitler’s rise to power in Germany and the subsequent World War II to the Great Depression and the Weimar government’s inability to pursue policies that reduced unemployment, which reached one third of the national workforce. My conclusion from this is that, by understanding how to ‘fix’ our economies, both nationally and internationally, and by raising awareness of the burdens that affect most and benefit few, we will be effectively choosing politicians that actually pursue policies to favor us as a society altogether.

Microchips from Taiwan

Taiwan has long been the world’s greatest supplier of microchips, used in all kinds of devices, from gaming consoles to the laptop I am currently writing this article from. What I didn’t know before I read this book, and might come as surprising to you too, is that after the earthquake that hit the island in 1999, prices tripled to quintupled within a single week. Since then, important renovations have been applied to make sure a disaster like this never occurs again. Having said that, as Moran points out, just like with the crude oil passing through the Strait of Hormuz, we are overly dependent on a single product in a single geographical area, which when unavailable, cripples the entire economy.

Progressive tax systems

As one of the solutions to the imminent inequality we face in this world, Moran proposes all countries implement progressive taxation, which is supposed to redistribute money from the rich to the poor. However, I believe progressive tax systems promote a more unequal society, rather than an equal one. My question is as follows: if we are all equal before the law, why should I pay more taxes than my next door neighbour if I earn higher income, whether it’s because of my hard work, my unique talent in performing a skill or the better opportunities I have received? This would only cause demotivation among higher skilled employees or even promote tax evasion, as the system is unfair. For instance, if I’m a 35 year old successful lawyer, who has spent thousands in her private education, hours of hard work, and years of patience to get promoted, as well as years of paying private healthcare insurance, why does the government feel like I am less worthy of this? Why should I pay for others’ public healthcare and education, when I, in fact, have contributed my talent to defend other people in court as a crucial part in society? I’ve done my share, and I’m no less worthy of equality in the economic system by paying the same rates of taxes as a teacher or a housemaid, assuming that it is already ‘unfair’, as, let’s say, 15% of a lawyer’s salary is not the same as 15% of a waiter’s salary. Another idea I don’t agree with is ‘if everyone is less able to afford that fancy restaurant, then a group of friends can have as much fun as a normal one’. Equality in society shouldn’t mean that I can’t go to a fancy restaurant if I’ve earned it and have the money to do so. Both should coexist. Something I believe Moran does not mention when implying equality often means closing down companies that offer products and services that are not within reach of a large part of society is that this would increase unemployment and decrease the ability the government has to finance certain public services, as a big part of the benefits of those companies are later paid in taxes.

Last thoughts 

The development of overall poverty and living conditions as a society is present in our everyday life. Victorian bathrooms, or, more correctly, ‘not-bathrooms’, as they didn’t exist, have come a long way in the last two centuries. Notwithstanding, when Moran affirms that ‘Jason Hickel has calculated that it would take over two hundred years for growth to end global poverty entirely’, I am hit again by a wave of desperation. Living in a world with tuition for school, four to five meals every day and summer holidays travelling all around the world, it’s often easy to forget not everybody lives in what we consider normal. 

Another idea I had rarely thought about was the purchase of copyright by billionaires. Moran defines it as a way to ‘extract money from everyone else for using ideas that cost nothing to produce—and we’re all poorer for it’. Last but not least, he raised a very important question that has made me think a lot. What makes us truly happy as humans? Pinker’s claim states ‘inequality is not a component of human well-being’. However, Moran does not agree. He states that status anxiety, the ‘reflection of your position in society’, is a huge factor in determining true happiness. Let’s say you are Jenny Humphrey from ‘Gossip Girl’. She was happy when she was in Brooklyn, but when she went to high school surrounded by Upper East Side students, with parents who owned real estate empires or fashion brands and had chauffeurs who drove them around New York, her self-esteem plummeted. 

Final verdict

‘Why We’re Getting Poorer’—which I read surrounded by 14 year old girls making Tik Toks—kept me hooked until the end. Whether that’s because of the comforting feeling we all get when we are more informed on negative issues, the boring appeal of filming short videos or my unexpected interest in economics, I’m still trying to understand. One thing is for sure–this book opened my eyes to a reality we are often too busy to discover.