A Farewell to Alms, An economic history of the world
Matt Giwer
I just got ahold of it. It touches on a theme that has come up a
couple times here over the years. A quick scan suggests it is basically
sound and not a political invective.
Introduction: The Sixteen-Page Economic History of the World
He may therefore be justly numbered among the benefactors of mankind, who
contracts the great rules of life into short sentences, that may be easily
impressed on the memory, and taught by frequent recollection to recur
habitually to the mind. —Samuel Johnson, Rambler No. 175 (November 19, 1751)
The basic outline of world economic history is surprisingly simple. Indeed
it can be summarized in one diagram: figure 1.1. Before 1800 income per
person —the food, clothing, heat, light, and housing available per
head—varied across societies and epochs. But there was no upward trend. A
simple but powerful mechanism explained in this book, the Malthusian Trap,
ensured that shortterm gains in income through technological advances were
inevitably lost through population growth. Thus the average person in the
world of 1800 was no better off than the average person of 100,000 BC.
Indeed in 1800 the bulk of the world’s population was poorer than their
remote ancestors. The lucky denizens of wealthy societies such as
eighteenth-century England or the Netherlands managed a material lifestyle
equivalent to that of the Stone Age. But the vast swath of humanity in East
and South Asia, particularly in China and Japan, eked out a living under
conditions probably significantly poorer than those of cavemen. The quality
of life also failed to improve on any other observable dimension. Life
expectancy was no higher in 1800 than for hunter-gatherers: thirty to
thirty-five years. Stature, a measure both of the quality of diet and of
children’s exposure to disease, was higher in the Stone Age than in 1800.
And while foragers satisfy their material wants with small amounts of work,
the modest comforts of the English in 1800 were purchased only through a
life of unrelenting drudgery. Nor did the variety of material consumption
improve. The average forager had a diet, and a work life, much more varied
than the typical English worker of 1800, even though the English table by
then included such exotics as tea, pepper, and sugar. And hunter-gatherer
societies are egalitarian. Material consumption varies little across the
members. In contrast, inequality was pervasive in the agrarian economies
that dominated the world in 1800. The riches of a few dwarfed the pinched
allocations of the masses. Jane Austen may have written about refined
conversations over tea served in china cups. But for the majority of the
English as late as 1813 conditions were no better than for their naked
ancestors of the African savannah. The Darcys were few, the poor plentiful.
So, even according to the broadest measures of material life, average
welfare, if anything, declined from the Stone Age to 1800. The poor of 1800,
those who lived by their unskilled labor alone, would have been better off
if transferred to a hunter-gatherer band. The Industrial Revolution, a mere
two hundred years ago, changed forever the possibilities for material
consumption. Incomes per person began to undergo sustained growth in a
favored group of countries. The richest modern economies are now ten to
twenty times wealthier than the 1800 average. Moreover the biggest
beneficiary of the Industrial Revolution has so far been the unskilled.
There have been benefits aplenty for the typically wealthy owners of land or
capital, and for the educated. But industrialized economies saved their best
gifts for the poorest. Prosperity, however, has not come to all societies.
Material consumption in some countries, mainly in sub-Saharan Africa, is now
well below the preindustrial norm. Countries such as Malawi or Tanzania
would be better off in material terms had they never had contact with the
industrialized world and instead continued in their preindustrial state.
Modern medicine, airplanes, gasoline, computers—the whole technological
cornucopia of the past two hundred years—have succeeded there in producing
among the lowest material living standards ever experienced. These African
societies have remained trapped in the Malthusian era, where technological
advances merely produce more people and living standards are driven down to
subsistence. But modern medicine has reduced the material minimum required
for subsistence to a level far below that of the Stone Age. Just as the
Industrial Revolution reduced income inequalities within societies, it has
increased them between societies, in a process recently labeled the Great
Divergence.1 The gap in incomes between countries is of the order of 50:1.
There walk the earth now both the richest people who ever lived and the
poorest. Thus world economic history poses three interconnected problems:
Why did the Malthusian Trap persist for so long? Why did the initial escape
from that trap in the Industrial Revolution occur on one tiny island,
England, in 1800? Why was there the consequent Great Divergence? This book
proposes answers to all three of these puzzles—answers that point up the
connections among them. The explanation for both the timing and the nature
of the Industrial Revolution, and at least in part for the Great Divergence,
lies in processes that began thousands of years ago, deep in the Malthusian
era. The dead hand of the past still exerts a powerful grip on the economies
of the present. The focus on material conditions in this history will strike
some as too narrow, too incidental to vast social changes over the
millennia. Surely our material riches reflect but a tiny fraction of what
makes industrialized societies modern? On the contrary, there is ample
evidence that wealth—and wealth alone— is the crucial determinant of
lifestyles, both within and between societies. Income growth changes
consumption and lifestyles in highly predictable ways.
--
What is the point of worshiping a god that cannot be seen when its
performance is no better than a statue of Apollo?
-- The Iron Webmaster, 4193
http://www.giwersworld.org/bible/sewer-bible.phtml a15
Wed Nov 4 04:58:03 EST 2009
JTEM
Matt Giwer <matt@localhost> wrote:
> Thus the average person in the world of 1800 was
> no better off than the average person of 100,000 BC.
It's long been stated that lifespans dropped with the
advent of civilization, and didn't really rise again until
the 19th century.
> Indeed in 1800 the bulk of the world’s population
> was poorer than their remote ancestors.
Rather subjective.
> The lucky denizens of wealthy societies such as
> eighteenth-century England or the Netherlands managed
> a material lifestyle equivalent to that of the Stone Age.
He's talking about the poor, right? Or at least Joe-Average.
Well, what do you expect? 100 thousand years ago they
didn't have a class-based society like we do today. You
had people working for themselves, their tribe or (vastly more
likely) the family, while today if your labor doesn't benefit an
overlord -- or benefit them enough -- they'll ship your job to
China.
> In contrast, inequality was pervasive in the agrarian economies
> that dominated the world in 1800. The riches of a few dwarfed
> the pinched allocations of the masses.
Let me put it in a way that even a Larry Swain can grasp:
http://news.bbc.co.uk/2/hi/uk_news/8124022.stm
The royal family in the U.K. costs the government over 41
million POUNDS (not Dollars, not Euros) each year. Now, this
is import, so don't fuck up:
Forget about "Per capita" or even "Per Taxpayer." Add up all
the money that your average working-class Joe pays in taxes
each year, and I do mean ALL of it. Next, given how much in
taxes your average working-class Joe pays each year, figure
out how many working class people it takes to pay for the
royal family.
If, say, a working-class man pays an average of 5 thousand
pounds in taxes, that would require something like 8 thousand
people just to support the royal family... without them
contributing a single penny to any government services, nor to
the military. Nothing. Well, nothing, that is, besides the royal
family.
Of course, this is rather deceptive. Because although it might
cost [blah-blah] in police protection for the Queen to go somewhere,
piles of cash had to have already been spent training and
equipping those police, not to mention every other expense from
their vacation time to their retirement benefits. If you wanted a
true accounting of the cost of police protection for the the royal
family, you have to factor in their share of these expenses and
not simply their "Hourly rate."
You want worse? Check out Bush's-turned-Obama's give-away,
the Bucks-for-Billionaires program where a trillion dollars (that's
one million, million) was taken from the working class and given
to the rich.
We are rapidly returning to the 18th century.
Martin Edwards
quite a bit of the money is going round in the economy. I hate to break
it to you, but in the modern world a redundant footman is not going to
go to Stoke and make Jasper Ware: the factory is closing. Also,
notionally, the whole country belongs to the Queen. As a freeholder I
do not, strictly speaking, own my house and garden, as in the States. I
hold it from the Queen, unlike some people in Birmingham who may own the
house but still pay ground rent to, eg, the Calthorpe Estate. Income
from the royal demesne goes to the government and it allots a certain
amount to the upkeep of the royal family. Price Charles does not cost
the /taxpayer/ strictly speaking, anything. His income comes from the
Duchy of Cornwall, which was set up in the reign of Edward III precisely
to provide income for the king's eldest son. What the corporate
oligarchy is costing Americans, British and a lot of other people even
worse off is, of course, another story.
--
As through this world I've rambled, I've met plenty of funny men,
Some rob you with a sixgun, some with a fountain pen.
Woody Guthrie
JTEM
Martin Edwards <big_mart...@Yahoo.com> wrote:
> Also, notionally, the whole country belongs to the Queen.
Only because the people have yet to wake up & toss out the
royals.
Anyhow, I love youtube...
http://www.youtube.com/watch?v=Zp6Cuaf-ZlA
P.S. There are far, *Far* more efficient means for creating
employment than pampering a family.
Martin Edwards
Matt Giwer
> Matt Giwer <matt@localhost> wrote:
>> Thus the average person in the world of 1800 was no better off than the
>> average person of 100,000 BC.
> It's long been stated that lifespans dropped with the advent of
> civilization, and didn't really rise again until the 19th century.
>> Indeed in 1800 the bulk of the world’s population was poorer than their
>> remote ancestors.
> Rather subjective.
The value of this book is that the author is an economist and does
in fact recite what economists have developed as measures. You may not like
the measures chosen and you are certainly invited to develop your own, but
not liking those used does not mean they are wrong.
What the book does, now that I have my nose out of it, is to use
consistent measures over centuries. Granted there are always problems with
records and these are acknowledged. However the data is amazingly consistent
even with the simplest measures.
Thus if you should get into the book the observation you describe as
subjective you will find is based upon these measures.
>> The lucky denizens of wealthy societies such as eighteenth-century
>> England or the Netherlands managed a material lifestyle equivalent to
>> that of the Stone Age.
> He's talking about the poor, right? Or at least Joe-Average.
Joe Average is 90% of the population. There are always outliers.
> Well, what do you expect? 100 thousand years ago they didn't have a
> class-based society like we do today. You had people working for
> themselves, their tribe or (vastly more likely) the family, while today if
> your labor doesn't benefit an overlord -- or benefit them enough --
> they'll ship your job to China.
The bottom line of all of the material progress of the Industrial
Revolution is that the lowest level of society has benefitted the most. The
greater the ratio of highest to lowest income the better the lowest income
people live. That is the most surprising fact of all. And the fact is based
upon using the same measures going back nearly a thousand years.
Forget the politics. The richer the people at the top the better the
people at the bottom live. This is not trickle down or any political crap.
It simply happens. The income of the people at the bottom does not have to
change. The people at the top get richer by making "things" cost less. Same
income more things and better things for the same income.
I am not going to argue the book. I am simply recommending it.
A thing of particular interest to us here is that all progress prior
to the Industrial Revolution was that all improvements lead to an increase
in population which eliminated the value of the improvement. He calls it the
Malthusian trap.
The problem is the big question is why the IR caused the changes it
did are unanswered. He simply demolishes the many political explanations and
popular guesses.
>> In contrast, inequality was pervasive in the agrarian economies that
>> dominated the world in 1800. The riches of a few dwarfed the pinched
>> allocations of the masses.
> Let me put it in a way that even a Larry Swain can grasp:
> http://news.bbc.co.uk/2/hi/uk_news/8124022.stm
> The royal family in the U.K. costs the government over 41 million POUNDS
> (not Dollars, not Euros) each year. Now, this is import, so don't fuck up:
> Forget about "Per capita" or even "Per Taxpayer." Add up all the money
> that your average working-class Joe pays in taxes each year, and I do mean
> ALL of it. Next, given how much in taxes your average working-class Joe
> pays each year, figure out how many working class people it takes to pay
> for the royal family.
One point very well established is that taxes were much lower,
incredibly lower, in pre-industrial times. High tax rates only appear after
the IR arrived. Forget the sheriff of Nottingham talk. Think about the
incredibly tiny tax motivating the Boston Tea Party. If anything high taxes
and a high standard of living go together.
And the poorest pay the least taxes even though benefitting the most
from the rich getting richer.
This is not something I am arguing. It is something I have seen in
the data presented.
> If, say, a working-class man pays an average of 5 thousand pounds in
> taxes, that would require something like 8 thousand people just to support
> the royal family... without them contributing a single penny to any
> government services, nor to the military. Nothing. Well, nothing, that is,
> besides the royal family.
> Of course, this is rather deceptive. Because although it might cost
> [blah-blah] in police protection for the Queen to go somewhere, piles of
> cash had to have already been spent training and equipping those police,
> not to mention every other expense from their vacation time to their
> retirement benefits. If you wanted a true accounting of the cost of police
> protection for the the royal family, you have to factor in their share of
> these expenses and not simply their "Hourly rate."
Lets see. The best police are assigned for the protection and get
the highest pay. The best workmen do the maintenance on the castles for
similarly high pay. All those best workmen buy more fast food prepared by
the lowest rung workers who therefore have a better income.
But even in the old days, if the taxes were raised the living
standards went down for a while until excess deaths returned the income per
family back to where it was. Cold blooded of course.
But reduce taxes or invent the horse collar and wealth increases for
a while until population increases and takes it back where it was before.
> You want worse? Check out Bush's-turned-Obama's give-away, the
> Bucks-for-Billionaires program where a trillion dollars (that's one
> million, million) was taken from the working class and given to the rich.
> We are rapidly returning to the 18th century.
Between about 1860 and WWI there was a golden age of
internationalization and economic stability. EVERYONE benefitted and the
poorest most of all. WWI through the Depression destroyed that and countries
started diverging, mainly the backward countries went downhill after
advancing in lockstep with western countries. Bretton Woods tried to
establish the economic stability but it failed mainly due to machnations of
the Cold War.
After the Cold War the internationalization started getting back to
what is was a century before. There was a big glitch last year. Is it worth
rescuing? Can we get back to it? Was a century ago a fluke?
Bottom line is it may be trillions but we can inflate our way out of
it and so many countries have so many dollars they cannot afford to dump
them all quickly else bankrupt themselves so they ride it out with us.
This all goes very far off-topic very quickly so I have no interest
in arguing it. I merely suggest the book.
--
The Holocaust is no worse then Iran having an atom bomb.
Israel says so.
-- The Iron Webmaster, 4191
http://www.giwersworld.org/bible/sewer-bible.phtml a15
Sun Nov 8 05:19:36 EST 2009
Matt Giwer
> Martin Edwards <big_mart...@Yahoo.com> wrote:
>> Also, notionally, the whole country belongs to the Queen.
> Only because the people have yet to wake up & toss out the royals.
While I agree with the sentiment there is also the important maxim,
if it ain't broke, don't fix it.
Consider Brits do pay rent for the land on which their house is
built. They do not pay property taxes on the land. Is the amount different?
If not, what matters the fiction on the title?
--
Happiness is simple. Do not compare yourself to others.
-- The Iron Webmaster, 4205
http://www.giwersworld.org/antisem/GAZA-pics/ a13
Sun Nov 8 06:08:42 EST 2009
Whiskers
I don't know what this has to do with the science of archaeology or with
ancient history, but <http://news.bbc.co.uk/1/hi/uk/7477222.stm> £0.66 per
person seems pretty tolerable to me. The quieter and more frugal royals in
the Netherlands cost their subjects "Two big Macs" each
<http://gal.darkervision.com/2008/07/12/dutch-royal-family-cost-114-million
-euro-a-year-thats-nothing-compared-to-the-375-million-the-dutch-state-make
s-from-the-taxation-of-soft-drugs/>.
--
-- ^^^^^^^^^^
-- Whiskers
-- ~~~~~~~~~~
JTEM
Whiskers <catwhee...@operamail.com> wrote:
> I don't know what this has to do with the science
> of archaeology or with ancient history,
then either take it up with Giwer, or don't reply. But you
can't have it both ways. If it's "Wrong" to discuss it here
then you're doing something wrong. Period.
> but <http://news.bbc.co.uk/1/hi/uk/7477222.stm> £0.66 per
> person seems pretty tolerable to me.
If that's reasonable, have the U.K. pay me, oh, a third of
that. In return, I'll create more jobs than the British Mafia.
Martin Edwards
Matt Giwer
> by Gregory Clark
> I just got ahold of it. It touches on a theme that has come up a
> couple times here over the years. A quick scan suggests it is basically
> sound and not a political invective.
>
> Introduction: The Sixteen-Page Economic History of the World
>
> He may therefore be justly numbered among the benefactors of mankind, who
> contracts the great rules of life into short sentences, that may be easily
> impressed on the memory, and taught by frequent recollection to recur
> habitually to the mind. —Samuel Johnson, Rambler No. 175 (November 19,
> 1751)
The point of this post is not modern times. Rather it does describe
the economics of ancient times. It shows there measures can be developed and
used across centuries which are agreed to be nebulous in ancient times but
some can be found and used to good result. It is nothing to rush to the
library to read but should you get access to it is it worth a read.
--
The Holocaust is no worse then Iran having an atom bomb.
Israel says so.
-- The Iron Webmaster, 4191
http://www.giwersworld.org/israel/is-seg.phtml a14
Tue Nov 10 01:28:13 EST 2009