The Greatest Story Ever Told
My notes on a Steven Landsburg talk on Cato:
- From the time humans first appeared on earth until the Industrial Revolution (about 200 years ago), almost everyone was living on the subsistence level. There was virtually no change in the standard of living for 100,000 years.
- In money terms, people lived on little more than a $1 a day. Their annual income was $400 or $600 or if they were really lucky — in a few times and places — $1,000.
- All that changed, beginning about 200 years ago, when incomes started growing. Since 1960 in the U.S., real per capita income has increased by 2.3% per year.
- Suppose you earn an average income of, say, $50,000 a year. If the current trend continues, your children will earn $89,000. Your grandchildren will earn $158,000.
- In 400 years, your descendants will earn $1 million — a day!
Unless inflation is held in check of course.
Thats kind of neat..
Im assuming this is adjusted for inflation, and he is talking about “real” dollar amounts?
In 400 years, your descendants will earn $1 million — a day!
Maybe I will have myself frozen so I thaw out in 400 years!
I find this type of analysis very interesting. As a society, we come to expect rapid change. The phone that I was so proud of owning 20 years (Motorola 8000M; aka, The Brick) seems so utterly outdated now – although it was the latest thing in 1992. The televisions we watched as kids were so small and fuzzy. We hear stories from our grandparents about growing up when life was more difficult; when kids shared not only a bedroom, but the same bed. Kids shared a bicycle if they were lucky. Families had one car – if they had a car at all. Within our memory or at least the memories of our parents and grandparents, we hear about a time when heart disease and hypertension routinely killed people in their 50’s and 60’s. Grandparents were often deceased before the grandkids reached adulthood.
Yet, for most of human history, life did not change at all for generation to generation. For someone born hundreds of years ago, you may well have lived in the same house your great, great grandfather lived in. You may never travel farther than the village up the road. In most places, people probably lived in one-room shelters alongside their livestock. Work was torturous, but barely yielded enough calories to survive. Depending on the country where you lived, you may not be allowed the mobility of a free labor market. After the Black Plague, labor became in short supply. The lords who were used to having worker bees till their land for little remuneration moved swiftly to restrict their low-paid labor from migrating elsewhere for higher wages.
I attribute this the amazing innovation that capitalism encourages; as productivity increases so does standard of living.
“In 400 years, your descendants will earn $1 million — a day!” This sounds terrific right now…but, realistically speaking, in 400 years, $1 million will not be worth nearly as much as what it’s worth today.
To continue your phone call, please insert an additional $100,000
@Robert, Hah.