Why do the rich get richer while the poor get poorer?
There is a story in the Gospel of Matthew in the New Testament: Before a king left for a long journey, he handed three servants a piece of silver to each, asking them to go do business. After the king came back, the three servants came to report.
The first servant said: “Master, I have earned 10 pieces from the one you gave me.” So, the king rewarded him with 10 cities. The second servant said: “Master, I have earned five pieces for the one you gave me.” So, the king rewarded him with five cities. The third servant reported: “Master, the silver coin you gave me has been wrapped in a handkerchief the whole time. I was afraid of losing it, so I never took it out.”
Then, the king ordered that the third servant’s only piece be rewarded to the first servant, saying: “For whosoever hath, to him shall be given, and he shall have more abundance: but whosoever hath not, from him shall be taken away even that he hath.”
This is the origin of the Matthew Effect, which refers to the phenomenon that the strong get stronger and the weak get weaker.
This phenomenon can be seen quite often in daily life. For example, the more followers an account has, the easier it is to accumulate more followers; The more popular a restaurant is, the easier it is to attract even more diners.
This is also true in social economic activities. The rich are getting more and more money, spending their fortune on big houses and fancy cars, while the poor, albeit trying really hard to save, barely have enough for food and clothing.
The reason behind this is not hard to understand. The rich usually enjoy better education and development opportunities, more capital, and greater strength. They can rely on the accumulation of capital to gain more wealth like a snowball. For the poor, due to economic reasons, their income might only be enough to maintain a very basic lifestyle. They do not have good educational resources, development opportunities, and lack access to capital accumulation.
Therefore, the poor have little access to opportunities to improve themselves and fall into a vicious cycle of poverty. This has led to the wealth disparity and polarization between the rich and the poor.
From the perspective of economic growth, the development trend of developed regions and less developed regions will also show the Matthew effect of “development divergence”.
What does it mean?
Talents and resources in less developed areas will flow to developed areas, and the systems, regulations and institutions in these areas are usually not as effective as in more developed areas. This is why in China, everyone wants to move to the first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen. The advantages of first-tier cities always attract more talents and capital, and the continuous flow of human resources and capital has made these cities more prosperous, so the cycle goes on and on, and the regional differences are getting bigger and bigger.
Now you might ask, is there no way for the poor to escape the negative cycle? Is the Matthew effect an excuse for the poor to escape from reality and refuse to work hard?
Definitely NOT.
If the poor want to rise above these challenges, they must try to bring themselves into the positive side of the Matthew effect — do their best to obtain a small advantage, get opportunities and practices, and then build on the existing advantages. Gain new grounds, slowly accumulate, enlarge the difference and eventually turn the tide.
When an apple hit Newton’s head, it led to the discovery of gravity, but if it hits someone else’s head, it might just be a regular unpleasant experience. Therefore, the opportunity is important, but the preparation before the opportunity is even more important. Laying a good foundation for ourselves before the opportunity arises is exactly what we should be doing now.
