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DRAFT:
How Much
Wealthier Are We Today
than Our Counterparts of
the Past
?
Lecture Notes
J. Bradford DeLong
University of California, Berkeley/St. Stephen’s College, New
Delhi
2022-02-11/12 Fr/Sa
<
https://www.icloud.com/pages/0eeC0pIaHM6W71ZfQtUsQQfzw
> <
https://
github.com/braddelong/public-fi les/blob/master/---st-stephens-2022-02-11.pdf
>
<
https://www.icloud.com/keynote/018P8NckvObBEa0e2ncoz3tOw
> <
https://
github.com/braddelong/public-fi les/blob/master/st-stephens-2022-02-11:12.pptx
>
<
https://watch.mmhmm.app/z_ps77rbgCwbH8UexkzsDX
>
<
https://youtu.be/
Oh60bEmFOoI
>
1
C
opyright © 2022 by J. Bradford DeLong
2
1. Social Science’s
Killer App
I was hanging out
with my one
-
time studen
t,
Ohio
S
tate
U
niversity
professor Trevon Logan.
We were
outside on the lawn on a
beautiful summer’s evening in America’s Pacifi c Northwest
.
Trevon
reminded me of something that the late economic historian
Robert Fogel liked
to say:
The
killer app of
social science
is counting things
…
Yes, we need to have
“
thick descriptions
”,
and empathy and
imagination to enter into the minds and world views of those we
are attempting to understand.
Yes, we need to have narratives with protagonists; beginnings,
middles
, and ends;
and
cause
-
an
-e
ffect
—
if only because our not
-
very
-
smart
East
African
P
lains
Ape
brains fi nd it very diffi cult to
think in any other way.
3
But
,
most of all
,
we need to count, so we can tell which stories and
which anecdotes are strange and unrepresentative
o
utliers
and
which capture for us common occurrences and major trends.
Thus
the overwhelming bulk
of this lecture is going to be me
trying to count things
. And along the way I will
try to draw out the
implications of that count
ing
.
I
n the process, I am going to try to
count things that are diffi cult to count, and perhaps some things
that are uncountable, and perhaps some things that should not be
counted, and perhaps some things that are the wrong thing to
count. I leave that to you to judge.
I see myself as here more to suggest and to provok
e. I do not see
myself here to
provide anything that is a fi nal
,
or even more than a
preliminary
,
word.
2. How Much Richer?
How much richer are we, today, than those who came before us
?
By “we” I understand, fi rst,
those of us who sit in universities and
watch zoom calls
; second,
those with whom we share our
respective allegiances to the fi ctitious communities
—
but very real
communities
—
that are nation
-states
; and
, third,
the entire human
race, all of us who all draw the overwhelming bulk of our heredity
from some 4
,
000
lucky
E
ast
African
P
lains
A
pes 75,000 years ago
living in the Horn of Africa,
who have
since
spread out around the
world,
inter
marrying along the way with other
groups of
homo
sapiens
and groups from other
human species
that we
found
along
the way.
Fortunately for my task, other people I have before not only tried
to count but have been brave and bold enough to put their attempts
4
at counting out there in public. Here we have fi gures from the
wonderful
“Gapminder” project
:
<
http://g
ap
minder.org
>.
G
apm
inder tells us that those of us in the United States today have
an average real income of $64,000 of today’s purchasing power per
capita.
This “international dollar“ is a rather strange measure:
in it,
commodities are
value
d
not at the relative prices in
US
dollars in
the United States today, but rather at statisticians
’
guesses of the
average or typical relative price structure in the world as a whole
.
It
then benchmarks those values so that the value
attributed to
the
United States is in fact the value of United States income per capita
today
using
the United States
’s
relative price structure. The hope is
that this measure removes artifi cial inflation of real income gaps
across the world
that would be
generated by the fact that
the
commodities
that
poorer countries are relatively effi cient at making
happen to have
artifi cially low price
s
in the United States
,
because
the United States is so rich as to be nearly satiated with them.
5
I do think this procedure is the best that we can currently do. But
that is debatable.
Gapminder tells us that India has an average annual real income
level today of $6,800 international dollars
per capita
; had a level
of $1,200 back in 1920, had a value of $1,000 back in 1870, six
years before the proclamation of Victoria I Hanover as
Kaiser-i-
Hind
; and had a level of $1,200—the same as in 1920—back in
1800, three years after a young Irish aristocrat from a fi nancially-
embarrassed family with no visible skills save a not quite
professional-scale virtuosity on the violin, Arthur Wellesley,
arrived in India and turned out to be a military genius.
Gapminder tells us that life expectancy at birth in India was some
25 years in 1800, and is 70 years today.
Gapminder tells us that in the United States average annual real
income
per capita
is $64,000; it was $5,500 back in 1870, and
$2,000 back in 1800.
6
Gapminder tells
us that life expectancy at birth in
the United States
was some
40
years in 1800, and is 7
8
years today.
Gapminder tells us that, on this “real international dollar” measure,
the U.S. is 9 times as rich as India today, was 5 times as rich back
in 1870, and was twice as rich in 1800.
Gapminder tells us that from 1800 to 1920 there was no growth in
average real incomes in India; that from 1920 to 1985 average real
income grew at an average rate of 0.44
%
/year—a doubling time of
1600 years—and that since 1985 average real income has grown at
4.13
%
per year—a doubling time of 16 years. Gapminder tells us
that since 1800 growth in average real incomes in the United States
had been near 1.5
%
/year—a doubling time of 45 years—
consistently since 1800.
7
3. A Wider View
We can take a wider view. We can s
tep back to look at the world as
a whole
—looking at
world averages
, not just India’s and America’s
average. We can step back to
look at
all
human history since
D
eep
T
ime, since
the moment 75000 years ago when the
several
thousand of us who were
the
effective population size of
the gene
pool who are all of our genetic ancestors
began to expand our
population
,
and then begin the radiation that would carry their
genes all over the globe, fi rst in the horn of Africa
,
then to the rest
of Africa
,
and across the Red Sea to Yemen and out to the world.
(P
arenthetically, this is only the fi rst of four radiations that I fi nd
particularly interesting these days: the second is the radiation
of the
gr
ain-
based societies of the agrarian age
out of
the Fertile Crescent
of the
Near East; the third is the radiation of
the languages
spoken
5000 years ago on the Pontic
-
Caspian
Steppe
by the domesticat
ors
of the horse and the inventors of the wagon
—a radiation vast
enough that languages descended from their
Proto
-
Indo
-
European
tongue
are now spoken from Bengal and the Deccan west all the
8
way around the world to Perth and Singapore, a linguist
ic
radiation;
and the
fourth
is what
I hope
will be a durable and
complete
but is now merely an ongoing
global
radiation of
industrial technologies and supporting political and sociological
ideals of
reduced
hierarchy, individual autonomy
,
and diffused
social power.
)
I have written down a table of numbers: average world real income
per capita; estimated human population; total world real income. I
have gone back 75000 years. And I have projected forward—
assuming the world soon attains zero population growth and
continues to deploy better productive technologies at the
proportional rate it has since 1870—to 2100 and 2200.
For today
,
at least, we have numbers
and e
stimates
that
technocratic b
ureaucracies
have calculated,
stand behind
,
and
will
at least semi-justify.
Those are the “$11,600” average annual
income and the “6900 million” estimated population as of 2010.
Going forward to 2100, we have sensible demographic
projections,
and we can project technology and income to get a real projection:
a population of nine billion forecast for 2100, and a world with an
average annual real income level of $54,000—a world average as
high as today’s global-north average. And then we can draw those
lines out for another century, and imagine a world of 2200 with an
average annual real income of $400,000
per capita
. I see us as
unlikely to reach that world, in which the average person is three
times as rich as my family is, with me at my peak earning years,
but it would be very nice to get there.
Going backwards from today,
we have economic historians who
have at least estimated what they regard as reasonable growth rates
over 1870 to 2010.
W
e can use these growth rates to project
levels
of world average real income for 1870
. This introduces error
:
these
9
growth rates are estimated with considerable errors
;
an error in the
estimated growth rates
compounds
as we project back
and
induces
a
n
opposing
-
sign error in the estimate of the
past
level.
And we
have enough censuses to be confi dent of our 1.3 billion population
estimate for the world as of 1870.
4. Estimates to Guesses
Back before 1870, I have written
750, 500,
and
240
million for the
world human population in 1770, 1500, and 800. These are
demographers’
well-informed guesses
. I have written 200, 50, and
15 million for the world human population in 150, -1000, and
-3000. These are guesses. I have written 5, 2, .2, .2, and .005
million for the human population in -6000, and then ten, fi fty,
seventy, and seventy-fi ve thousand years ago. These can barely
even be called “guesses”.
For average income, I have written $1,200/year—$3.50 a day—as
the average real income level ten thousand years and before, back
in the gatherer-hunter age before the invention of agriculture. This
is poverty, but not quite extreme poverty or
dire poverty by the
World Bank’s current measures
. It is not that the typical person is
so hungry most of the time that
they
have a hard time thinking of
much else, and not so poor that the leisure time
they
take
they do
so
only because there is nothing additional that
they
could do that
they
have the strength to carry out.
This is a guess, but this is an
informed guess: it is an inference
based on relatively healthy
gatherer-hunter skeletons
that we have found and analyzed.
For average income, I have written $900/year—$2.50/day—as the
average real income level from eight thousand years up to 500
years ago, back in the agrarian age. This is poverty, close to
10
