After you celebrate that the average level of income has increased radically in the last 200 years, ponder how that happened.
- Economic world history:
- 1800 Poor & equal
- 1970 Unequal
- 2000 Much richer & more equal again.
(Cross-post from my other blog, Outrun Change.)
Click here to see the very cool graph. Keep in mind it is on a logarithm scale, roughly meaning that each marked increment on the horizontal axis is an increase of 50% or 100%.
The graph is expressed in International dollars, which
is a currency that would buy a comparable amount of goods and services a U.S. dollar would buy in the United States in 1990. Therefore incomes are comparable across countries and across time.
Graph shows a narrow bell curve in 1820 with a small number of people stretching out to the right side, meaning higher differences in income. Peak is about $500 with most in range of about 200 to 1,000. Most people were really poor with some people not as poor.
Graph in 1970 shows bipolar peak with one at about $700 and the other at $6,000. Higher dispersal means higher divergence in income.
Graph in 2000 shows wider bell curve meaning more dispersion of income. Peak is about 3,000.
Again the conclusion: In the last 200 years, everyone has gotten richer, including the poor.
The unequal dispersion of income has decreased. People at the peak of the curve in 2000 would have been filthy rich in 1820 with an income five times the peak of 1820.
Just eyeballing the graph, I’ll guess that half of the world’s population today are richer than a small fraction of the top 1% in 1820.