In the modern world, the value of everything is determined not by its inherent quality or importance but by demand and supply.
For instance, there can be nothing more valuable for a human being than food, water and air.
- Air is most valuable since we can’t live without air for a few minutes.
- Next comes water, without which we can’t survive beyond a few hours.
- Next comes food, without which we can’t survive beyond a few days.
However, in the world, food is more valuable than water, which is more valuable than air because
- Air is abundant around us, and we can effortlessly get it. Since its supply is far more than its demand, its value is practically nil.
- Water is also plentiful. Yet the supply of drinkable water is limited, and you have to make an effort to get potable water from a tap, well, or river. Hence, water is more valuable than air, but still very cheap.
- Food supply is limited as you have to cultivate the food with great effort, and its supply is less than the demand. Hence, it is more expensive.
On the other hand, we find that gold is costly. At the cost of one kg of gold, you can buy a lifetime supply of food. This is not because gold is more important than food but because the supply of gold is very limited while its demand is millions of times greater.
Diamonds are even more costly because their supply is meagre, but their demand is very high.
Like material things such as food, water, air, gold, and diamonds, individuals' value also depends on the demand for their skills compared to the supply of the skill in the market.
For instance, labourers require little skill to do their job, and any healthy person can do this job.
As a result, developing countries have a vast labour force supply compared to demand. Their value is the lowest, and their people are the poorest.
On the other side, you have to spend years in schools and collages to acquire the knowledge and develop the skill of a software developer or manager.
In many developed countries, however, most people have a higher level of education, and fewer people are available to work as manual labourers. Hence, the demand for manual labourers is greater than the supply. As a result, labourers in developed countries are much better paid than their counterparts in poorer countries and even better than their educated counterparts in their own country.
Anyone can make huge money and become rich if they acquire a skill that is in high demand, but its supply is less.
For instance, the highest international and domestic packages offered during IIT Bombay placements in 2023 were INR 3.67 crore per annum and INR 1.68 crore per annum, respectively, while the average package offered was INR 21.82 LPA.
Therefore, if you acquire education from a top college and the top level skill, you can earn more than 100 times more income than the graduates of ordinary college and more than 200 times more than unskilled workers.
Even within the same college, the most skilled person would earn 10 times more than the lowest classmate.
If you are poor, it is because you (or your forefathers) have not acquired a high-demand-low-supplu skill.
If some people are rich, it is because they, their parents, or their grandparents have acquired the high-demand, low-supply skills that enhance their value in the market.
If you wish to become wealthy, you must invest your time, money and effort in developing difficult-to-acquire but much-sought-after skills to command a better income in the market.
Once you become wealthy, not only will you become rich, but your future generations will also enjoy the fruit of your labour and live better lives.
Source of picture: Google Images
AwdheshSingh.com, Ex-IRS, Author, Educator, IITD
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