Sunday, July 5, 2009

Worldwide per capita income, 1000 BC - present

This chart, taken from the book A Farewell to Alms, has been making the rounds:

It depicts world income, per capita, since 1000 BC. Pretty neat (although how they managed to piece together per capita income for people living 3000 years ago is beyond me). You can see at the industrial revolution that "incomes rose sharply in many countries after 1800 but declined in others".

It'd be interesting to know what percentage of people are in the "haves" part of the post-1800 chart versus the "have-nots" part. I'm guessing an overwhelming majority are in the have-nots part.

Krugman explains the "Malthusian trap":

The two figures actually illustrate slightly different points. What the figure above shows is that over a roughly 3000 year period, during which there was obviously quite a lot of technological progress — iron plows, horse collars, mastering the cultivation of rice, the importation of potatoes into Europe, etc. — living standards basically went nowhere. Why? Because population growth always ate up the gains, pushing living standards back to roughly subsistence.

...

This homeostasis only broke down when very rapid technological change finally outstripped population pressure for an extended period.

I wonder how the have-nots line will change as China and India continue to industrialize.

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