Capitalism’s Final Equation
When will increasingly hoarded wealth leave too few resources to sustain everyone else?
Modern capitalism was meant to reward innovation, drive prosperity, and raise living standards. But are we on the path to a form of capitalism where rewards have become so high, and resources so concentrated, that most people can no longer afford life’s essentials?
I’ve spent the past few weeks building a model to test that question. The goal was simple: find out when the amount of wealth held collectively by non-millionaires will no longer be enough to cover the basic needs of housing and food for everyone else. When the rules of the game begin to necessarily eliminate the players.
This is not a practical issue of rebalancing, it’s a question of when our current, endless wealth accumulation model of capitalism will mean it is fundamentally impossible for the non-wealthy to live. This is a vital factor: if capitalism is no longer functioning such that non-wealthy participants can live, then it is failing the test of whether it is a suitable economic system. We all voluntarily agree to live under the economic system of capitalism; if it’s failing, we need to reserve the right to change it.
The Test
We’re not measuring inequality here for its own sake. Inequality in and of itself does not make capitalism unpractical, as those unequally affected could still be better off than under different system. We’re instead asking a very specific, answerable question:
At what point does the combined wealth of everyone who isn’t a millionaire become less than what it would cost them to buy a modest home and afford a year's worth of food?
First let’s define two things:
Non-elite wealth — the total wealth held by everyone with less than $1 million in wealth. It is assumed that anyone above this level of wealth has enough to live, and excess. I could have specified something like $500k instead, but I wanted to ensure we were making generous assumptions on behalf of capitalism so as to avoid bias.
Basic needs — under this premise we are assuming only the very basics – no entertainment, no clothing, and in fact nothing that might be considered necessary to live a good life. Only the basics; the total cost to provide:
One home per household (at market prices, adjusted at average inflationary levels), and
Enough calories to feed everyone for one year (again, adjusted for inflationary levels annually).
If the wealth left in general circulation is less than the price of food and shelter, the system has failed its most basic test. And this is its most basic test: in reality, we should expect a decent economic system to enrich lives, not leave the majority with only enough for the basics. Similarly, in countries like the US, issues like healthcare are also basics which have to be bought. For simplicity of a system that suits each country, the US figures are not penalised for this, and thus look more generous than they otherwise would.
The Formula
These are the equations I used to find the tipping point:
Non-elite wealth in year t:
Wnon(t) = W0 × [(1+gw)t − s0 × (1+gE)t]
Essential needs in year t:
Vneeds(t)=H0 (1+gH)t + F0 (1+gF)t
(Where: W0 = total wealth today; s0 = share of that wealth held by millionaires; gw = growth of total wealth; gE = growth of elite wealth; H0, gH = housing cost and its growth; F0, gF = food cost and its growth).
Using these equations, we find the first year where non-elite wealth drops below the cost of basic needs.
The Global Picture
As of 2024, total global household wealth stands at around $454 trillion, according to a UBS report. Of that, 44.5% is held by millionaires, leaving just over half in the hands of the remaining 99% of people. Meanwhile, the market value of all residential property worldwide is estimated at $288 trillion, and it would cost approximately $6.7 trillion each year to provide a basic calorie diet for the global population.
Together, the cost of housing and feeding everyone comes to $295 trillion. The wealth available to those who aren’t millionaires, however, totals just $252 trillion. That means that — at current prices — the world’s non-elite no longer have enough combined wealth to buy even the most essential requirements of food and shelter.
In short: the average person has already been priced out of the basics. Capitalism is already incentivising company growth to a level that makes it impossible, globally, to just house and feed all the people in it. It would cost $295 trillion to do this, but capitalism leaves the non-elite class $43 trillion short. So just to make our global economic system function on a basic level, $43 trillion in wealth distribution is required annually.
When will capitalism stop working in individual countries?
The truth is that most of us probably felt that globally this was already the case. And we probably feel guilty, too, as we likely think this is because we in developed English-speaking countries tend to be more economically developed, and thus take more than our share.
However, the next bit should surprise you. If we use that earlier equation, we can predict when capitalism will stop being practical within individual countries themselves, and I have taken a look at some big ones: UK, Australia, USA and Canada.
Here’s what we find.
[disclaimer: I have used these four countries as examples only, as this is where my followership is primarily based]
United Kingdom — Tipping Point: Already Passed
W0=15.6 trillion USD; s0=0.43; H0=11.7 trillion USD; F0=0.168 trillion USD; gW=0.04; gE=0.06; gH=0.03; gF=0.03
Wnon(t)=15.6[(1.04)t−0.43(1.06)t]
Vneeds(t)=11.7(1.03)t+0.168(1.03)t
Tipping year t∗ ≈0 → Already occurred
In short, in the UK, a long-standing housing crisis and fast-rising inequality have already pushed the country over the line. The wealth left in the hands of non-elite citizens is no longer enough to collectively cover the cost of homes and a year's worth of food for everyone else. This isn’t theoretical, it’s happening now. The line has already been crossed, even if politicians are ignoring the maths and blaming factors like immigration or EU membership instead.
Australia — Tipping Point: Already Passed
W0=11.2 trillion USD; s0=0.40; H0=7.3 trillion USD; F0=0.148 trillion USD; gW=0.05; gE=0.07; gH=0.04; gF=0.04
Wnon(t)=11.2[(1.05)t−0.40(1.07)t]
Vneeds(t)=7.3(1.04)t+0.148(1.04)t
Tipping year t∗ ≈0 → Already occurred
Australia tells a similar story. Despite its relatively small population, sky-high property prices and significant wealth concentration have left the non-elite holding less than is needed to cover basic needs. The line has already been crossed, even if the full effects haven’t yet been politically acknowledged.
United States — Tipping Point: 2043
W0=169 trillion USD; s0=0.35; H0=52 trillion USD; F0=2.6 trillion USD; gW=0.05; gE=0.07; gH=0.04; gF=0.03
Wnon(t)=169[(1.05)t−0.35(1.07)t]
Vneeds(t)=52(1.04)t+2.6(1.03)t
Tipping year t∗ ≈18 → Around 2043
The U.S. still has some breathing room though not much. What’s more, this doesn’t take into account basic needs that are met through the state in countries like the UK – such as healthcare – have to be bought in the US. Including healthcare would take another 6 years or so from the tipping point.
If the top 1% continues growing their share by even half a percentage point per year — and housing inflation keeps pace — the U.S. crosses the line by 2043 at the latest.
Canada — Tipping Point: 2045
W0=14.2 trillion USD; s0=0.25; H0=6.2 trillion USD; F0=0.116 trillion USD; gW=0.04; gE=0.06; gH=0.03; gF=0.03
Wnon(t)=14.2[(1.04)t−0.25(1.06)t]
Vneeds(t)=6.2(1.03)t+0.116(1.03)t
Tipping year t∗ ≈20 → Around 2045
Canada mirrors the U.S. in many ways, though with slightly less severe inequality and a still-expanding housing stock. But the trajectory is similar; elite wealth is growing faster than general wealth, and home prices outpace wage growth. If nothing changes, the tipping point arrives around 2045.
What This Means
This isn’t just about inequality being “unfair.” It’s about systemic instability.
When too much wealth is tied up in the hands of the few, the rest of society loses access to the essentials of life. Not because we don’t produce enough, but because we’ve allowed financial power to drift out of balance. Capitalism has been a monumentally successful system at developing society and encouraging innovation, but the continued failure to regulate it means it is now statistically failing to meet its own goals. It’s no longer practical in current form.
This isn't theoretical anymore. For the UK, Australia, and the world as a whole, that imbalance is already here. The U.S. and Canada have a few years left before fundamental collapse yet are already in a poor state.
These calculation also assume that AI will not shift the balance in favour of the wealthy; if AI means businesses throughout society can operate more efficiently and with fewer staff, that drive profits for the wealthy up and pushes down employment and the amount of wealth in the hands of the non-elite. If/when this happens, the situation will get dramatically worse.
The Immigration Distraction
Blaming immigrants for collapsing living standards is the politician’s current go-to line. Like rearranging deckchairs on the Titanic, it changes nothing about the hole below the waterline. The data and equations show that migration into rich countries is high because the global economy has already priced millions out of food and shelter; moving is a rational attempt to survive. No government of an undeveloped country, however economically minded, can conjure ten loaves of bread from a single slice.
There’s a further fact that Republican or Reform UK voters might be surprised to learn: immigrants actually ease the problems as we’ve discussed them. U S data show that a household who stays two decades adds roughly $160,000 to the non-elite wealth pool, about twice the $80,000 contributed by the median native family (Federal Reserve SCF). Starting with little, newcomers work longer hours, launch smaller businesses and therefore distribute profits more broadly; a hundred corner shops employ and share more than one 100-store chain.
Yet politicians win votes by slashing visas, accelerating the very breakdown they denounce. The current model both drives immigration and relies on it to mask some of its extremes. Cut the immigrant flow, and the maths that already fails the non-elite simply fails faster. We need to fix the problem itself, not strengthen the borders around it.`
Where Does This Leave Us?
If the data says that the non-elite already fall $43 trillion short of simply eating and sleeping under a roof, then the debate isn’t left vs. right, it’s function vs. failure.
An economic system that cannot clear the bar of keeping its participants alive, let alone allow them space to innovate, has forfeited its social license. Capitalism was a brilliant engine until it started running on fumes for 99 % of its passengers.
In my next article, later in the week, I will discuss what systems we can transition to, and which best suit what capitalism has taught us about economics.