Improved living standards, increased spending power, enhanced quality of life: Switzerland's residents see a marked improvement compared to 50 years prior.
In 1975, Roman Benz, a secondary school teacher, made a significant move. He left his old life behind and settled in a small town on the picturesque Lake Constance, seeking a fresh start and a new challenge. His children were still young, and he wanted to put down roots in this new residence.
The year 1975 marked a turning point in the global economy. It was the starting point for significant economic progress, as indicated by an increase in the standard of living. Key factors contributing to this progress include increased productivity, efficiency improvements, resource extraction, structural economic reforms, and human capital development.
Between 1945 and 1975, known as the "glorious 30" years, economic growth was sustained with wages growing in step with the economy. This meant that workers shared equitably in the prosperity, directly raising the standard of living. Since 1975, however, this trend reversed: wages have lost ground relative to capital income, with much of the economic gains increasingly flowing to owners of capital rather than workers.
Despite this shift, economic progress has continued. Productivity and efficiency gains have fueled growth during organic or sustainable periods, rather than debt accumulation, which has sustained living standards. For example, in Vietnam since 1975, moving from centrally planned to market-oriented reforms significantly boosted agricultural productivity, food security, and rural incomes, contributing to raising living standards for a growing population despite initial severe hardships.
Many economies have also witnessed shifts towards industrialization, modernization, and service-sector expansion, supporting higher income levels and improved living conditions over time. Improvements in education, health, and infrastructure have underpinned sustained economic development in many countries, accelerating economic progress post-1975.
However, these gains have not been uniformly distributed, and wage growth has lagged capital income, leading to rising inequality in many advanced economies. Global geopolitical events, policy decisions, and market shocks such as oil price spikes, embargoes, or political transitions have also influenced the trajectory and pace of progress.
Roman Benz's move to the small town on Lake Constance was not just a personal decision. It was also a reflection of the broader economic changes happening around the world. As we continue to navigate these changes, it's important to remember the factors that have contributed to economic progress and strive for a more equitable distribution of its benefits.
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- Roman Benz's move in 1975 was not just a personal decision, but also a reflection of the broader economic changes happening globally, as the shift towards increased capital income over wage growth, resulting from productivity, efficiency improvements, and structural economic reforms, was underway.
- To balance economic progress with a more equitable distribution of its benefits, Roman Benz––who diversified his personal-finance portfolio by investing in real estate and local businesses––advocates for economic and social policies that prioritize human capital development, educate workers on personal-finance management, and close the widening income gap between wage earners and capital owners.
