Comment by rayiner
11 hours ago
Victorian England was the richest country in the world by GDP per capita. But the world was just very poor before the industrial revolution: a per-capita GDP around $900. By 1800 England was more than double that. Today almost every country is richer than England was in 1800: https://www.broadstreet.blog/p/how-the-world-became-rich-par...
I think something modern times should emphasize more than ever is that what matters is the lifestyle of the people. Here's [1] a fun graph I just threw together. That's real GDP/capita and real wages graphed alongside each other, both indexed (at 100) to the start date when real median earnings began being measured by by the Fed, which is 1979. Since 1979 real GDP/capita is up 117% while real wages are up 12%.
And if you consider that modern times has far more necessary expenses that often involve rent (internet, computing devices, etc) then it's quite likely that real median wages are down since 1979 in terms of how much money the average person has left to themselves at the end of each month. Even without these adjustments it's likely that real wages today are lower in absolute terms than they were in the 50s as by 1979 inflation had already started getting out of control.
The point of this all is that I don't think the numbers mean much of anything. And that's assuming you could even reliably measure them - you cannot. Go back into reconstructing 19th century data and earlier and you're going to rely on assumptions where the degree of uncertainty is much higher than the differences over time you're trying to assess. So I think far more informative than numbers are personal accounts. How did people live? Of course there's a literacy bias there, but even such accounts will shed light on the illiterate.
[1] - https://fred.stlouisfed.org/graph/?g=1QHEN
Your graph is rather misleading: you adjust for inflation in two different ways to get 'real' data. One series uses CPI, the other uses the implicit price deflator for gross domestic product.
You can avoid this problem, by plotting nominal values and looking at their ratios. The price level will naturally cancel out.
https://fred.stlouisfed.org/graph/?g=1QI7c is a graph of the ratio of your two deflators (arbitrarily normalised to 1980 Jan 1 equal 100.)
As you can see, it trends up over time. Meaning that CPI grows faster than the GDP price deflator.
> I think something modern times should emphasize more than ever is that what matters
A while ago the Economist pointed out that one of the Rothschilds died of an illness that would today be easily curable with antibiotics, but at that time the cure could not be bought at any price.
I was curious and I assume you're referring to Nathan Mayer Rothschild, who died in 1836* from an abscess. These need to be drained, antibiotics are not enough to guarantee treatment outcome. And humans have been treating abscesses successfully since at least the iron age.
No offense intended but The Economist is very low-quality.
*edited year of death
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We have more necessary expenses, but the cost of computers, phones, and phone plans is so low. The expensive stuff is rent, transportation, food, childcare, and healthcare.
If a historian is going to uncover personal accounts from 2026, then they’ll be full of people who are struggling to make ends meet but are still drowning in a sea of inexpensive consumer electronics.
The expenses you're mentioning were also present in the past. Their cost or percent of revenue cost may have increased but this is covered ostensibly by inflation measurements. But the introduction of entirely new defacto necessities is not covered.
Of course inflation measurements are also flawed but that once again gets back into the broad point about how the reality of people is so much more relevant than any given number, especially once those numbers become seen as a goal to maximize, at any cost.
Wow, being that deceptive implies your argument is false.
You imply there some something different around that date, but only show data prior to that date for one of those lines. WTF.
Dig a little deeper and the median wage is calculated by literally asking people roughly what they make and changing the methodology in 1994. Health insurance alone is a big difference in the ratio of people’s nominal wages and their actual incomes between those dates.
1979 is when the Fed began collecting median wage data. Here [1] is inflation data since 1947. You can see that 1979 was well into the funny money inflation era. The reason this is relevant is that it's impractical to literally lower wages - that's going to turn your labor force hostile like nothing else. But with inflation this is suddenly very easy to do - just give people a 2% 'raise' and they're content enough. Some might even be happy, even though that's generally a direct pay cut, thanks to inflation.
Real wages started becoming grossly detached from other metrics in society once inflation started going wild, and I don't think it's just a coincidence. In any case this is why it's very reasonable to think that real wages were even higher prior to 1979.
[1] - https://fred.stlouisfed.org/series/CPIAUCSL
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>Victorian England was the richest country in the world by GDP per capita
It was extremely unevenly distributed though.
How many vacuum cleaners is a hansom cab?