Thursday, August 03, 2017

Richest Person in the World Inflection Point

This is a non-gaming post.

There are several libertarian-ish economists on the internet who argue against focusing on inequality. One common argument I've seen is that it is better to be a poor person (in America) in 2017, than to be the richest man a century or two ago. That poor people today have a better life than oil barons like J.D. Rockefeller. Thus rather than focus on relative inequality, we should pursue rising standards for everybody, even if it increases inequality.

As far as arguments go, it's not a bad one, especially if we focus on non-status, or more material elements. But that's not what I want to discuss today. Let's just take that argument as a given, and put ourselves in the same mindset as these economists.

So then we have the following sequence of logic:

  1. The richest person in 1870 had a worse standard of living than a poor person in 2017.
  2. The richest person in 2017 has a better standard of living than a poor person in 2017.
  3. Therefore, in some year between 1870 and 2017, the richest person in the world had a standard of living roughly equal to a poor person in 2017.
What year do you think that was? What's the point in time where you would choose to be the richest man in the world rather than a poor person in 2017? What is the missing invention or innovation which makes all the difference?

I think the best candidate is 1955, when Jonas Salk invents the polio vaccine. I think that removes the last major scourge of childhood illnesses (which strike rich and poor alike). After that point, I think the richest person in the world can approximate most innovations that a poor person in 2017 has access to, or can live without those innovations. As awesome as computer games are, I don't think they make up for millions of dollars.

What's your candidate for this inflection point?


  1. 1994, the publishing of Netscape Navigator, making internet practically available. Since then a middle class man has more access to knowledge than someone working at the Library of Congress had a few years before.

    Knowledge separates men from beasts. Living without internet in a yacht full of lingerie models is worse than living with it in mom's basement.

    1. But the richest person in the world would have the equivalent of the internet if he desired. He could own and support libraries, universities, and a research staff. Pretty much anything he wanted to know, he could find out.

      The richest person in the world always had access to the sum total of human knowledge, regardless of the time period. The internet can be said to have brought that knowledge to the masses.

  2. Hmmm. It all depends on what one considers to be a standard of living. Is it having electricity, TV, health, or entertainment?

    If it's about work conditions, then the premise is not true. There are certainly people in the US today who endure harsher working conditions than the rich of 1870.

    Even health may not conform to that premise. While medical care has improved astronomically over that of 1870 for everyone in 2017, in 1870 the wealthy could afford the best treatments while in 2017 there are people who struggle to afford even basic healthcare.

    What about housing? It would be interesting to see the statistics regarding homelessness. How many people were unable to have a roof over their heads in 1870 compared to 2017? Are the homeless of 2017 better off than the homeless of 1870?

    1. Well, I think the idea is to use as a poor person someone who is unemployed, but can and do take advantage of all government/charity programs. They're not mentally ill, or have other situations which prevent them from getting government support. So they would probably live in small government-provided apartment, be on welfare, use food stamps, use medicare, etc.

      For medical treatment, they probably can't afford the best treatment. But they and their children will be vaccinated against the common diseases. Wives and children are unlikely to die in childbirth. And penicillin is only discovered in 1928. For example, the son of the American president died of blood poisoning from a blister in 1924.

  3. I just happen to be reading "The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War," which studies the change in the standard of living and its effect on economic growth between 1870 and 1970, after which growth tapered off. I'm less than half way through, but I'll throw in.

    I would put the point somewhere around 1940, at which time the automobile was in wide spread use, food quality was good, electricity was in most homes, the radio was inexpensive and a source of both new and entertainment, education to high school level was common, and clean water was widely available which solved more medical issues that plagued people than modern medicine has.

    1. I think you're making the same mistake as Gevlon above. Those innovations would spread to the masses then, but the wealthy would have had decent food, clean water, electricity, and automobiles a decade or two earlier.

      So if those are your criteria for "good enough", then the point is probably around 1920 or so.

    2. Well, your question was about an inflection point, which would be when things were most equal. Around 1940 the non-rich have access to about all of the things the rich do. By 1940 even most farms have electricity. The rich have nicer things, but they don't have anything that the poorer classes do not have. Even medical care is about on par.

    3. No, the point is to compare rich people across time, using the 2017 poor person standard of living as a marker.

      For example, maybe a rich person in 1935 is worse off than a poor person in 2017. But a rich person in 1940 is better off than a poor person in 2017. So what changed from 1935 to 1940? What was the new element that put the 1940 rich person over the marker line?

      For the purpose of this question, the poor in 1935/1940 don't matter.

      My choice of 1955 says that a rich person in 1950 is worse off than a poor person in 2017 because the rich person doesn't have a polio vaccine, and I think that's enough to lower his standard of living below the 2017 poor person marker.


    At no point would you during the last 100 years would you have taken being poor instead of rich.

    In 1920 the difference in life expectancy between richest and poorest was 15 years. This more than any other point is a measure of access to everything one expects in modern society - food, health care, leisure, work, technology. I'd take being Rockefeller and living to be 98 and having everything society (at that time) had to offer over being poor in 2017 (living in the projects) and only surviving to an average of 73.

    1. That's an interesting article/graph. One thing, though, is that they use life expectancy at age 50 to generate their numbers. That introduces massive survivor bias, and means they exclude infant mortality, childhood diseases, and preventable deaths of prime age people to things like infection.

      It's arguable that the lion's share of our medical advances over the last century have gone to reducing or eliminating those factors. I think that if you took the same graph, but used Life Expectancy at Birth, you might see a very different picture.

      But that's an interesting method to use. The inflection point is the point where the Life Expectancy of the top 10% matches the Life Expectancy of the bottom 10% in 2017.

  5. 1948ish. That's when you could actually get air conditioning for residential homes.

    1. Air conditioning is an interesting choice, especially if we expand it to central heating.

      Now that I think about it, I've never actually lived in a house with air conditioning (not a big deal since I'm Canadian), but I can't imagine a house without central heating.