Who is Wealthy?

argues against comparing wealth over time:

The difficulty of measurement of wealth between different periods derives not only because of our lack of data for most of the past but from the inability to meaningfully compare wealth or consumption patterns in the past with those of today. Some economists believe that if people in the past did not have certain amenities that we have today they must have been infinitely poorer. This is what one finds in Nordhaus and DeLong’s view of historical progress as unfolfding through reduced cost of artificial lighting, the approach that Angus Maddison (in “Contours of the World Economy: 1-2030”) termed a “hallucigenic history”.

The logic of such authors is as follows. Take the example of artificial lighting or voice recording. For Julius Caesar to read a book overnight, easily move at night around his palace, or listen to the songs he liked would have required perhaps hundreds of workers (slaves) to hold the torches or sing his favorite arias all night. Even Caesar, if he were to do that night after night, might, after some time, have run out of resources (or might have provoked a rebellion among the singers). But for us the expense for a similar pleasure is very small, even trivial, say $2 per night. Consequently, some people come to the conclusion that Caesar must have had tiny wealth measured in today’s bundle of goods since a repeated small nightly expense of $2 (in today’s prices) would have eventually ruined him. Other people at Caesar’s time had obviously much less: ergo, the world today is incomparably richer than before, and people then must have felt horribly poor and deprived of all pleasurable things. (Even if you cannot feel deprived of the things you do not know exist.)

The logic seems at first reasonable even if somewhat extreme. But it is not reasonable. Let’s extend this logic, now in a different direction, from us today to the next 500 years. Suppose that in 500 years people are able to choose for their vacation between Mars, Venus, Pluto or perhaps even to go further than that. Suppose they can fly around our solar system, go to the bottom of the ocean, zip from one end of the Earth to another in a few minutes, or do lots of fun things that we cannot imagine today, no more than Caesar could have imagined that his singers’ voices could be recorded on a tiny chip and reproduced ad infinitum at almost no cost. And when we then look at Jeff Bezos’ wealth today using the consumption opportunities of the future, that wealth is likely to look to us –from the vantage point of 500 years hence- insignificant. Bezos might be rich in our own terms, but he cannot fly to Mars this weekend, no matter how much he tries.

So should we then absurdly turn around and claim that Jeff Bezos, Bill Gates et al. are poor? Clearly not.

I am baffled by the last two sentences. Bezos and Gates clearly are poor relative to people in the future who can choose to vacation on Mars. It seems absurd to me to think otherwise. Jeff Bezos has four children. Suppose one of them had cancer. If he could, do you think Bezos would hesitate for one minute to spend a billion dollars buying the medicine that will be available to an ordinary American in the year 2050? How much would Bezos pay for an extra 10 years of life? What about an extra 100? How much for a bionic eye, a dozen extra points of IQ, or freedom from Alzheimer’s disease?

Or put it the other way. How much wealthier would you have to be to want to live in 1950, 1900 or 1850? I can come up with numbers for 1950 and 1900 but I think I would prefer my income and lifestyle today to anyone’s income and lifestyle in 1850. Dentist anyone? I’d also prefer it if my wife didn’t die in childbirth.

Branko argues that comparisons of wealth across long time periods are impossible, meaningless, even “hallucinogenic.” I think he has it backwards. It’s quite difficult to compare wealth over fairly short periods. Am I wealthier than my father was at my age (he was also a professor). Maybe. Maybe not. We consume somewhat different bundles. I have Netflix and a nicer car. He had a nicer house. But am I wealthier than my grandfather? Absolutely. On either side.

Comments

"Or put it the other way. How much wealthier would you have to be to want to live in 1950, 1900 or 1850?"

Maybe we should ask Americans who are seeing their communities being swalled whole by drugs epidemics and crime and seeing their country's very existence being threatened by Red China and its freedom being threatened by Senator Sanders. It is hard to imagine a White American in 1950 wanting to change places with his/her 2020 counterpart. We used to be the greatest country in the world. Now we are Russia in 2016.

I mean, 1916.

Hmm it seems like your website ate my first comment (it was
super long) so I guess I'll just sum it up
what I submitted and say, I'm thoroughly enjoying your blog.
I as well am an aspiring blog blogger but I'm still new to everything.

Do you have any points for novice blog writers? I'd certainly appreciate it.

You do realize that a third of Americans in 1950, including most Americans in the South, lacked indoor plumbing right? https://www.census.gov/hhes/www/housing/census/historic/plumbing.html.

It might be okay to have been born in 1930 so that you lived in 1950 with the expectations of someone who only knew that era. If you sent someone who knew of today’s modern conveniences back to 1950 (and they occupied the same percentile on the socioeconomic distribution they do today), I highly doubt they would like it.

+1

These complaints about America’s decline and whole communities being swallowed up etc etc really lack historical perspective.

So you want to live under the Han yoke?

Everyone in the West is wealthy. The mistake is comparing yourself with the super rich. We are all wealthy beyond the dreams of anyone from 100 years ago.

I'd have to be very, very wealthy to live in 1950, 1900, or 1850, so that I could blow it all in the weeks before I died without modern medication.

Also, according to the USDA, most of the United States was a food desert in 1950. How did anyone survive?

-j

It 1900 you could have blown it all on wine, women, and song. Today you'd blow it all on prescription drugs and spurious medical tests.

If you just skipped all the prescription drugs and medical tests, you would still be better off than if you were living in 1900.

Your facts run counter to your argument. Look how cheap and attainable heroine is today compared to the past!

This is not a good thing!

Maybe he is saying our lives are worse because heroin is harder to obtain? It was available with a doctor's prescription up until the 50s here.

Meh, B- Thiago

He trolled one of the more intelligent commentors on this blog. I'd give him an A+ on this one.

Big difference between warning people against killing the goose that laid the golden egg --- the liberal democratic capitalist system that is responsible for our prosperity --- and denying that such prosperity exists in the first place. It may well be that people in 1950 were more appreciative of liberal democratic capitalism than people today --- I have no idea whether that's true. And, it is true that we owe our prosperity today to those in the past that were good stewards of the liberal democratic system and preserved that system for us. But, denying the prosperity that such past good stewardship produced actually cuts against your point about the threat posed by Red China, Bernie Sanders, et al.

My point, is sizeable sections of America's populace are desperate enough to consider communism and maybe even Chinese conquest as an improvement. Yapping about how Caesar did not have Youtube will not help anyone. It is a rime for bold action to prevent the worst.

"Maybe we should ask Americans who are seeing their communities being swalled whole by drugs epidemics and crime and seeing their country's very existence being threatened by Red China and its freedom being threatened by Senator Sanders. "

1. Communities being swallowed whole by the violence and repression that comes along with prohibition, you mean? Because these drugs have been around for a lot longer than the 1950's. In fact, the repressive international regime dedicated to stamping out drugs is directly responsible for both the violence of the black market and the ever-increasing flood of ever-more-pure junk coming in.

2. Crime has been on a downswing in this country since the 1990's (at least).

3. Do you mean our existence is being threatened because some people are willing to work cheaper? Or do you mean our global hegemon is being threatened by a rising superpower?

4. Sanders is less of a threat to the country than any of the 'moderate' Progressives he's running against. Sander, if elected (and he won't be), will basically be unable to accomplish anything because the Democratic Machine hates his guts for spoiling *two* carefully crafted election plays. And the Republicans won't work with him just because.

You know who could destroy the country? Buttgieg. A guy who's willing to 'go along to get along'.

I think you forgot to write “/s” at the end to indicate your post was sarcasm.

P.S. When I go back to 1950, do I get to be a white guy? Or am I black? Or a woman? Do I have a wheelchair? What’s my heart situation? Am I going some place where polio is no longer a concern? Oh, and is the crime rate magically lower in this version of 1950 or is it the real 1950’s where crime was higher than today? Oh yeah, and are there going to be price controls at some points when I get older, like when Nixon is president, who also might have helped China rise or do Trump supporters like Nixon? I get mixed up whether he’s on the good team or bad team.

Seems to me a lot of unnecessary words and complicated language. Simply stated, there is a difference between wealth measured objectively and subjectively. Neither version is "wrong", but what seems to matter most to people, particularly in the political arena, is the latter. How do I stack up with my peers in time and space? In other words, the Joneses and the Bezos(es?). Perhaps some day we will have backwards time travel and we can all feel "wealthy" by visiting Mr. Caesar.

there is a difference between wealth measured objectively and subjectively

This is a great point though "absolutely vs relatively" is probably the more correct term but "objectively and subjectively" sounds more natural.

Probably an improvement. Thanks.

This is correct, the original author equivocates between these two meanings of "wealth," and this is the cause of their confusion or their disbelief in the conclusion of the argument they sketch out.

I would define "absolute" wealth in terms of the outcomes you have access to, perhaps, as Alex compares outcomes like protection against death by childbirth and the original author describes travelling to Mars.

And "relative" wealth might be defined as the share of your society's productive activity that you can command?

You could, then, compare Bezos and Ceasar in terms of relative wealth and see who could command a larger share of production and was therefore wealthier for their time.

You could also compare the average American today to Ceasar in terms of what outcomes are accessible to them and say which was wealthier in an absolute or eternal or time-indifferent sense.

I would say it’s wealth vs. power (like in my main comment below) rather than objective vs. subjective. The reason people want more wealth than others is not for consuming the wealth itself, but for power or at least status. If you had some kind of wealth that was consumed privately such that it conveyed no power or status (perhaps a medicine or a tool used for a hobby for example), I think people would consider objectively how it is more than how it stacks up with what their peers have.

No, when Alex claims that he would prefer to live during a period when his wife was unlikely to die in childbirth, it's not because he forgot to consider that he might like it as long as everyone else's wife was also likely to die during childbirth. It's actually the opposite: those that claim that they would prefer to live in the distant past as long as they were relatively less poor compared to their peers, forget to consider that such relative status improvement would come at the cost of things like losing their wife during childbirth. In other words, they take for granted all of our modern conveniences.

That's why, for example, people from poor countries want to migrate to rich countries even if it means lowering their relative wealth compared to their neighbors. Believing that people prefer being equally poor to unequally rich is one of the few good examples of 21st Century First World privilege.

This. I would use the word 'perceived'. Caesar perceived himself as wealthy, his whims within his imagination were attainable.

My grandfather died at 49 from a heart attack. When I hit 42 I had heart problems, but happened to be born in a time where the medical profession is really good at diagnosing and treating this stuff, so I'm alive and active. Am I wealthier than my grandfather? What he needed didn't exist at the time; it wasn't a matter of resources, or him not being able to afford a doctor that could keep him alive. So the question of wealth is the wrong question.

But the wealth of my grandfather's generation paid for the scientific advancements that led to me being able to get treatment that wasn't available when he needed it. It is the wealth of my generation that has taken those hard earned understandings and made them accessible.

There is also the hard reality that the treatment available to me isn't available to lots of people, because I live in a wealthy country that can afford this stuff. Likely in the intervening decades since I got that treatment, populations have become wealthy enough to afford them, all the while the technologies and techniques have become less costly.

Another comment. Why use music? Maybe Caesar chose his women by how much they sang? I'm surrounded by 70's soft rock piped into the commercial spaces I encounter. Which would bring more value? How could it be measured?

That's a good point. Caesar is an apt example since he famously said he'd rather be the first man in some wretched village than the second man in Rome. The distinction between relative and absolute is useful but also misleading. Even objective forms of wealth (who has more food) has no fixed, objective value relative to other forms of wealth. We all keep score a little differently, and that's without going back in time, when the score keeping becomes incomprehensible even to historians who try. I know I could not live in Caesar's world and I suspect he'd prefer death by torture to the daily indignities modern life imposes on us all.

I suspect he wouldn't. I was stuck in traffic for five minutes a little earlier today; I would have preferred it if I had discovered that my client had paid their bill when I checked my mailbox, but they didn't; and I would have appreciated it if someone had cooked my breakfast for me instead of doing it myself. That's a pretty small list of "daily indignities," and death by torture sounds a bit worse, if you ask me.

I mean, seriously?

Campaigning in Britain was tough and he almost drowned beating a hasty retreat on the first try, Roman landing craft sucked.

Vivian is correct. How we compare to our contemporaries is what matters, for at least two different reasons. One has to do with our innate sensitivity to hierarchies and status and the other with the power wealthy have to impact the lives of the less fortunate. We tend to hyper focus on the upper 1%, but I am much more concerned about the upper 20%. These are the folks that gentrify previously middle class neighborhoods and drive lower income people away from the areas with the most economic activity, like Silicon Valley. The upper 20% is good at protecting their intergenerational prosperity at the expense of everyone else via high local taxes, building restrictions, locally funded schools, and using their connections to benefit their children. The lower classes are shut out.

There's a line here just like in whether money buys happiness or not: up to a certain point, our absolute wealth matters more than our relative. For example, if I'm living in abject poverty, I wouldn't care whether I'm richer than a fellow citizen. However, as I get richer and richer, I'll begin caring more about how my wealth fares up to others--I'll start caring about my relative wealth or my power.

Therefore, wealth is both subjective and objective. What matters is your starting position and your current position.

They are shutting the lower classes out by funding their local communities and giving their children the best education money can buy? Sounds like crab mentality to me.

I'm pretty sure that Bezos has far more (both in terms of quality/quantity) sexual access than your average Mars-tourist in the future. So there's that. So did Caesar.

Perhaps. But also you’d have a far greater chance of getting STDs if you were Caesar, and you’d be limited to meeting a relatively narrow range of women. And in a future where we have Mars tourism available to the average Joe, we could also have sex robots or other simulations that give vastly more variety and pleasure than what is available to any man today.

Actually,a lot of STD's weren't around in Caesar's day--e.g., syphilis, AIDS.

I may on the sex robots--that's incel-talk not real life.

I meant "ixnay" not "I may"

Sure.

Based on today’s sex robots, yes. But in a world where we have good Mars travel, presumably we’d probably also have very good sex robots that non-incels would use. It’s like how video games were a nerdy activity in 1990 but now are mainstream because they’ve also gotten a lot better.

STDs were not a major problem prior to Columbus bringing them back from the New World. Caesar had access to a dizzying variety woman from the slave markets in North Africa and Arabia. Those women would have come from a far wider cultural and linguistic spectrum than exists today. He also had access to plenty of young boys. My guess is that Caesar probably would not want to live in a world where his preferred sexual practices are considered perverse and disgusting, and we probably would not want him living with us.

What STDs were around in Caesar's day? Not HIV, for sure. And syphillis was 1500 years away.

I'm pretty sure that Bezos has far more (both in terms of quality/quantity) sexual access than your average Mars-tourist in the future.

Does he? Bezos's new lady friend would suggest that as a famous person under a great deal of scrutiny, perhaps his choices are not so unconstrained. It probably doesn't help to get to a point where you're universally recognizable and strangers everywhere note, remember, record and report anything they happen to see you do. I would suggest that modestly wealthy, non-famous people probably have better luck in that regard (if that is what they want).

And isn't it likely that 500 years into the future either A) some combination of genetic engineering, pharmaceuticals, and plastic surgery will render everybody as attractive as today's Hollywood stars and/or B) There will exist indistinguishable-from-human sexbots?

Even now, average attractiveness surely has improved pretty dramatically compared to past centuries (with good health, nutrition, sanitation, medical care, dentistry, etc) no?

Depends on your preferences regarding obesity

People nostalgic for the past may be conflating wealth and power. It might have been nice to be Caesar or some other past king or emperor because they had power over other humans in a way you can’t today. A past king or emperor could have slaves and kill people they didn’t like without consequences, which no amount of wealth lets you do today (and that’s a good thing). But power and wealth are different because power over other humans is inherently zero sum whereas wealth can be expanded (and wealth also gives one power over nature). We can’t give everyone more power over others, though we could perhaps create better and better simulations such as video games where one has power over others (which I would class as a form of wealth rather than power over other humans).

Ultimately, though, we will have a better world when people learn to seek wealth (including power over nature) rather than power over other humans.

"ergo, the world today is incomparably richer than before, and people then must have felt horribly poor and deprived of all pleasurable things"

This is a straw man. Nobody is arguing that everyone consciously felt horribly poor and deprived of all pleasure.

Denial by the mainstream media of the obviously trying situation most Americans are going through explaying why large sectors of America's people have been successfully radicalized. Never send to know for whom the Bernie tolls; it tolls for thee.

Don't forget how much hotter women are today. In 1850, there was no sanitation, no way to have sex with a woman without them getting pregnant, there was no shaving, there was no real understanding of the sort of things that aged you, no real nutritional understanding, women blossomed in their teens and early twenties, and then were faded. How much do you think Queen Victoria would have paid to look like an average 50-year-old woman today when she was 50?

Queen Victoria would have paid nothing? Mass media driven consumer culture concepts of attractiveness seem to have not attracted her in the least.

Conclusion:

Prior, who was fired from a no-work job at GMU, has a 60 year old and physically revolting romantic partner.

His frustration manifests itself in passive aggressive illogical posts on an economics blog, as an outlet of his impotent rage at the world.

Imagine a failure at life, middle aged who earns 50k euros or less, clawing desperately at reality.

Gross. Disgusting. Failure at the fundamental definition of manhood.

Take advantage of the mental health system? I hear the Netherlands does euthanasia ..

People did shave in 1850. And depilatory creams existed for women

Alexander the Great was poor because, despite conquering most of the world, he died young (age 32) of a "fever" in 323 BCE. Wealthy people don't die of a "fever". Of course, this is nonsense.

Who has the greater obsession with wealth: the wealthy or the not wealthy? I'd say it's the wealthy, for they fear someone (the not wealthy) or some thing (death) taking it away from them. The not wealthy's obsession is assumed to be the result of jealousy. That's a fine explanation for the wealthy and their agents. But my observation is that the obsession is the result of the bad things that happen when the wealthy control our politics and, worse, control our economy. As for the latter, my issue with the wealthy is when the wealthy own such a large share of the income and the wealth that it adversely affects the economy. Of course, that's a problem that the wealthy and their agents deny even exists. No, I don't support a wealth tax, but I don't hope for the Austrians' solution to the concentration of wealth either. Do you? It's assumed that the central bank will always act in times of a crisis to preserve the wealth of the wealthy. Even Piketty assumes it. I wouldn't. Not when right-wing populists show up with pitchforks and torches at the offices of the Board of Governors. Then the wealthy have good reason for their obsession.

While more wealth in 2020 means a greater consumption choice set now, but for across-time comparisons, I think that it is important to know what goods a person actually wants. And that means deciding on whether that person knows his/her whole life arc, or just a know odds of things happening. For example, Bezos may not have a child with cancer or be afraid of flying, in which case the cancer cure or the space flight opportunities are not valuable additions to consumption. Similarly, a generation back Alex's father likely didn't have one of the many treatable now cancers, or Alex would not say that their lifestyles are comparable. So, knowing that his father didn't need recent medical technology makes that comparison easier and different than Bezos not knowing whether or not he will need the future cancer cures, etc.

Wow. I am sorry that my comment is so riddled with proofreading problems.

Bach only heard his St Matthew's passion three times in his life, I understand.

I don't think I would like living in the past.

But if it were all you knew, i.e. it was your present not your past, you'd feel differently.

Who is Wealthy?

yeah, let's take a very subjective adjective and pontificate about it ... to no practical purpose. ?

one is "wealthy" if one doesn't need to work to maintain a comfortable, contemporary standard of living.

And when pondering the standatd of living of the ultra wealthy people of past enturies -- think Dentistry & Health-Care.

White man 50 years ago was a lot happier than today's white man but today's white man has IPhones and Netflix so they need to shut the hell up and stop complaining about diversity.

Most blog commenters think wealth and well-being are about sex (maybe this is what unites a lot of low-quality posters). Well-being is probably about personal fulfilment. Wealth for Bezos etc. is about speculative guesses of the future income streams of their property, and inheritance / taxation laws, but to a great extent they can access their wealth and make it well-being, save people's lives in the thought experiment, etc.

In comparing himself to his grandfather Alex makes a pretty good argument for a wealth tax

In comparing himself to his grandfather Alex makes a pretty good argument for a wealth tax

Only if you prefer a future where Alex's grandchildren (and ours) are NOT wealthier (and healthier) than we are now because economic growth and dynamism have been destroyed by left-wing economic policies.

In Alex’s grandfather’s day they actually had inheritance taxes with teeth. So, what you are supporting is lower thresholds and higher taxes.

Bring back the good old days of high inheritance taxes, and even the old higher marginal rates, because Alex and Slocum have shown us what made America Great.

No thanks.

Feel free to give your assets away though instead of passing them on.

Back in the olden days people just paid accountants to figure out creative ways to shield the estate from the tax burden.

Ultimately it is pretty odd to me that places like Canada, Sweden, Norway, New Zealand, and Australia.

Taxes with teeth is really just another way to say job security for tax accountants.

There's no mystery why Australia doesn't have inheritance taxes. At the state level they disappeared as states competed for wealthy residents and at the federal level old people and wealthy people weren't fond of them. It also makes for an easy campaign issue since there are no poor people in Australia, just temporarily embarrassed hundred thousandaires.

I think there's no right or wrong answer to this question. Maybe we should see it from the point of view of happiness/utility:
- Caesar didn't miss voice recording because he didn't know he could have accessed to it. I don't miss vacations on Mars for the same reasons. And it takes time to feel that we need things. None of my grand-parents born in the 1910's-1920's ever connected to Internet although they could have had easily access to it.
- Losing a child or a spouse is tragic but in societies where it happens more frequently , people are better equipped to deal with it because these are things that happen (lord give me strength to accept the things i cannot change...)
-There are a lot of other good things associated with great wealth : access to sex, lower stress (although maybe Caesar is not the best example here), no need to work etc.
- Humans derive some utility from being high in the social hierarchy. Lots of us prefer to be the big fish in the small pond.

I don't miss vacations on Mars for the same reasons.

Are you seriously arguing that people cannot and do not imagine future pleasures (space travel, cures for cancer and other fatal diseases, extended lifespans, completely immersive virtual reality) that they'll never experience themselves? I think you might need to read or watch some science fiction.

Lots of us prefer to be the big fish in the small pond.

Apparently not enough to prevent the inexorable migration of people from the small ponds of small rural towns to the big ponds of major metro areas.

I can imagine some of cool new stuff that will happen in the next few decades (cure for cancer, much better VR maybe) but there are so many things that will happen that I can't imagine. I think Internet was hard to imagine for most people a century ago.

For me, this discussion highlights the disconnect between wealth and happiness. People who seek extrinsic happiness and need various levels of income, or consumption, or social status, or sex, or reinforcement from the political sphere, or etc., in order to be happy are destined to be miserable. They can’t seem to see that they’re making themselves miserable.

I was happy when my income was a third of what it is now. I’m happier now, but that’s mainly thanks to my kids. The higher income is great, I won’t lie, but it hasn’t made a huge difference to my every-day happiness. People who have a loving family and food on the table don’t generally realize how wealthy they are.

I think the right way to normalize is not with luxuries like music and Mars vacations, but with much simpler things.

I propose:

1) Free time

2) Freedom from worry.

Some people managed both in Roman times, some still don't manage them today. The reasons they do or don't intersect with economics, but are not purely economic questions. Sociology, psychology, human biology enter into it as well.

And I think we should be more concerned with increasing the ranks of the contented today, rather than arguing that the Mars trips make the question moot.

(I believe that hunter gatherers, especially in rich environments, spend a fair amount of their time chilling out and joking around. This makes idle contentment as a measure of wealth something that works from the dawn of man to whatever you're doing on Mars. Be that emperor or slave.)

anonymous’ Inverted Manslow Pyramid:

Heroin addict in the tenderloin at the top

Successful businessman with family at the bottom

In which the troll angrily agrees with me?

But you really are in his head

I think you are right about "free time". A lot of landowners in ancient Rome or Greece spent their time sitting and joking with friends, drinking wine, eating fresh food prepared for them by slaves and watching the sunset over the Aegean. People in the modern world have to pay top dollar for that kind of experience, and post it on Instagram with a caption about "paradise".

They were paying top dollar too (slaves were not free for example, nor fresh food and wine). Whenever you play these 'would I rather live back in xxxx' games, if you don't posit that you are wealthy back then, you definitely don't want to be there.

What on earth is this guy doing that playing music costs him $2 per night? This seems incredibly expensive to me. My streaming service costs significantly less than a dollar per day, internet and power would be in the pennies for the amount uses, and there's always the radio for an even cheaper option.

repeated actions can function as formal rules. What's so wrong with anonymous "as usual," ???

Take the example of artificial lighting

It's unlikely that Caesar had any idea that electricity might be conducted through wires to light bulbs which would then illuminate books that didn't exist at that time. Yet he was probably as happy as any megalomaniacal sociopath could be.

It's interesting that travel vacations to other planets are dwelt upon. Vacations of any kind are a relatively new invention. It shows how fantastically wealthy even the lowest members of contemporary society are when they can dispense with the daily grind of putting food on the table and haul the kids off to Disneyland. Most travel in bygone times was done to seek opportunity of one sort or another. Is being able to fritter money away on a trip to a culturally significant amusement park a sign of wealth or distorted values?

If you've tried to buy someone a Christmas or birthday present you soon realize that you can't buy them anything they need or maybe anything that they want. That's why money and gift cards have become so popular as presents. Since this is the case, the exotic travel idea being forwarded as wealth really ties to the exhaustion of material desires and the now popular wish for "experience". This experience is, however, strictly as an observer for all but the most adventurous, not the cruise line passenger and guided tour customer. Most, wealthy or not, want experience without discomfort or risk. So the wish isn't for a genuine experience.

Sorry, seeing the art of Florence or having a bowl of spaghetti in a remote mountain village is a genuine experience, even if it doesn't involve any risk or discomfort. If you want to criticize, find something worthy of criticism.

Foolish it may be to engage with the high-school silliness debate tactic of arguing generalities from specifics. But Caesar, and most people like him, must have feared a violent death every day.

If you are a billionaire who complains all the time, you have defeated yourself. You are not wealthy.

And that raises a question. Why are so many billionaires so unhappy with the society that created them?

I suspect it is psychological. It was dissatisfaction that drove their achievement, but tragically that achievement did not cure the dissatisfaction.

And so they look for new outlets for their dissatisfaction.

I agree that the passage you quote does a bad job of making the argument that Bill Gates is wealthy. But the frame here is all wrong. You’re arguing about a word that you haven’t defined.

Conventionally, “wealthy” is a descriptor applied to someone within a social context, and so within a temporal context. Bill Gates is extremely “wealthy” because of the resources he commands relative to his contemporaries, which allow him to mobilize a vast proportion of his fellow humans and vast portions of his environment relative to other people in his society. Its conventional meaning (ie its meaning) is very close to that of its cousin “powerful”.

If a peon of the Jetsons future can travel to Mars and wear fabulous space pants unavailable to Bill Gates but commands no influence over his fellow man and is confined to a cubicle 24 hours a day he is much less wealthy than Bill Gates and for that matter much less wealthy than a Paleolithic hunter who has stewardship of an entire forest and whose word commands respect within his clan.

The same point about semantics more succinctly illustrated: a man with no legs but a billion dollars is less “wealthy” than an able bodied beggar by Tabarrok’s definition. That is a highly figurative and poetic meaning of “wealthy”, but not the conventional literal definition that 100 percent of English speakers would identify, which would say that the billionaire is more wealthy even if he is less happy or in a worse position or whatever.

Famously, the Buddha gave up his wealth and power ..

Bring a highly sought after motivational speaker, venerated by many, and envied by even sages for his meditation prowess was ... acquiring some different powers.

So if Bernie and AOC redistributed all the wealth then everyone is still wealthy because they have Netflix and Julius Caesar never did. Do I have this right?

Nope. The point is that in an environment of radical wealth confiscation and redistribution, Netflix would never have been created and might not even be sustainable. Even the much-milder-than-Bernie's economic policies of the EU seem to have prevented the home-grown creation of anything like Netflix (or Apple, Microsoft, Amazon, Facebook, Uber, AirBnB, etc)

So what? Today's Europeans are still richer than Caesar so everything is fine.

I am not a communist, and I would not go down this road, but Soviets did actually invent stuff. Probably because there are creative people who want to create, independent of reward.

Also note that this ties to the idea that people today *should* suffer more, to create more, for future generations. How much suffering are we talking about, eh? Do you just want me to drive a Prius to the research park, or do I have to walk to the salt mines?

"I am baffled by the last two sentences. Bezos and Gates clearly are poor relative to people in the future who can choose to vacation on Mars. It seems absurd to me to think otherwise."

I completely agree with this sentiment, we are much poorer than the people of the future. It's why I want to prioritize sustainable growth and environmental protection for our descendants. Even though our inequality of wealth and income with them is unimaginable, it doesn't actually matter. People live in the present and acclimate to it very nicely. Very few people recognize just how amazing a life they have now compared to those in the past. Few remember polio, some don't even know it existed, how can they appreciate the vaccines for it? Similarly, when people are upset about inequality, they are upset about it now. No one is jealous or upset that someone who hasn't been born yet will accumulate $1 trillion dollars(adjusted for 2019 USD) in 2200 with his/her/zir's speed of light transportation device. Maybe that's because Bernie doesn't have a time machine to tax people in the future, he can only tax those we see around us today. Maybe it's because the future really is unimaginable, you can't know what existing new products and job opportunities will exist. You cant sit around and be miserable about things you can't conceive. This kind of super long-run economic view of human living standards is not how normal people think.

"...we are much poorer than the people of the future"

That's assuming that things continue along the path of the last couple of centuries and we don't screw it all up. Which *can* be done. The people in Europe got much worse off for a long time after the collapse of the western Roman Empire. For the vast majority of human history, living standards barely changed through countless generations, and there have been periods of decline as well.

"This kind of super long-run economic view of human living standards is not how normal people think."

Especially when encouraged not to do so by those promoting a short-term oriented politics of jealousy and envy.

“Also note that this ties to the idea that people today *should* suffer more, to create more, for future generations.”

This is an absolute non-sequitur.

Try again

Should you really say that right after Luka got it?

" but Soviets did actually invent stuff"

Very thin pickings compared to the west especially when you consider how many were non-military inventions that were turned into affordable consumer products that made ordinary lives better.

Naturally I, the fan of market democracies agree.

But the innovation for wages, zero intellectual property, system did work as a less aggressive model.

redistributed wealth to whom, exactly? how does the money translate? I'd much prefer they ration social security the way Barack Obama did.

What is best in life? Opinions differ. Some would go with this:

“To crush your enemies, see them driven before you, and to hear the lamentation of their women!”

And some think having an iPhone and Netflix is more important.

People differ in how they’re wired.

I agree that the question tells you more about the values of those doing the asking than about any specific historic or speculative future person's life. Most of the discussion also appears to assume unending upward progress, but there are historic periods where that hasn't been true. The Rome of 800 AD couldn't support any of the luxuries of Augustus' time. Maybe it will smooth out over a long enough timeline to appear historically continuous. That seems to be the case for the last few millennia, but still cold comfort for the victims of the dips. At the very least, social progress as an unending outcome is an optimistic starting point.

Can we ignore all this electronic gadgetry piffle? How good was the food and wine available to Caesar?

I see little point comparing my life to my father's. He had to go and kill Germans while seeing his friends killed. He saw Belsen.

It was lousy. The meat was gamey, the wine was sour, and the variety was small.

It's nonsense arguments like this that globalists use to try to shut the rank and file up: "shut up, 1000 years ago you would have been the richest person in the planet. You have an 850 foot apartment with a TV and internet, and a cell phone, and antibiotics. Now shut up and consume."

So...what do you want?

Wealth: the ornamental mask in which poverty makes all its starring roles.

Too many imponderables. A New Yorker lin the 1920's would have had the chance to hear Gershwin perform. to see Babe Ruth play, to go fishing for Atlantic salmon with a much greater rate of success than a contemporary New Yorkers. Can one put a price on those things?

Good post. I've thought about this topic many times and it isn't discussed enough. You couldn't pay me anything to live in 1950. The second-hand smoke alone would kill me. Getting drafted sounds bad.
Having to get married at 19 in order to have a sex life, which is then all over by 30? No thank you.

To say nothing of the 70 years of technology and prosperity that would vanish.

Well worth noting, though -- you are foolish to think that things will always, inevitably improve, and that your grandchildren will have lives you would envy. I think it would only take eight years of socialism to derail the US train. Stop acting like Venezuela can't happen here.

Long term Intertemporal happiness and utility comparisons are pretty silly.

Live in the moment.

Go tour Graceland to see how someone with lots of money lived back then. Go to the Smithsonian to see how a top TV personality's kitchen in the 70's. Go to the Museum of Flight to see how JFK flew Boeing 707).

In all cases, you will be underwhelmed. Elvis's kitchen had nasty linoleum countertops. Julia Child's cabinets were hand-painted, lacking self-closing drawers, with crap stacked everywhere and none of conveniences or organization of or grace of modern kitchens. Her oven lacked convection settings, timers, tight temperature control. The first Air Force One was small and unimpressive.

I'd rather be middle class today than top 1% in the 60's.

Really? Top 1% in the sixties has a crappy kitchen but it's located on some beautiful land, or in an excellent neighborhood. Top 1% in the sixties can have as many children as they want, and can send those children to excellent private schools, followed by Ivy League without debt. Top 1% in the sixties never fears a bill and comfortable early retirement is easy. Top 1% in the sixties has the time and means to learn to cook some meals in that crappy kitchen that put today's middle class microwaved dinner to shame.

I largely agree with you, except for "Top 1% in the sixties has the time and means to learn to cook some meals in that crappy kitchen that put today's middle class microwaved dinner to shame." Today, a middle class person could have the choice of a microwaved dinner, or a more exotic dinner than a 1960s 1%er could dream of. Things are available today that you'd have to fly across the world for.

> Top 1% in the sixties has a crappy kitchen but it's located on some beautiful land, or in an excellent neighborhood.

You can still get that today with a median income, just move away from the city.

You'd rather go back to the 1960's and be the 1%, where a heart attack was treated with "You need to rest, there's nothing else we can do" or when your spouse got cancer that was it?

You'd rather go back to the 1960's where "down time" meant watching one of 3 channels or reading a magazine that would go out of business the second the internet appeared?

You'd rather go back to the 1960's where calling a friend or family in another state was so expensive you'd only do it once a year?

Cars that absolutely sucked in every metric you could imagine? Houses in hot climes without AC? Average life expectancy of 10 years less? Stores that had a staggering lack of choices compared to today. No computers. Information via libraries only.

Yes, I'd rather be middle class today than the top 1% in 1960. This is true if I KNEW what I'd be missing out on and if I didn't.

At some level, we know that being rich corresponds with being high status relative to other human beings. So while billionaires may lack certain technologies that future generations may have, we cannot meaningfully call them poor in the sense most people understand. The markers of high status change over time. What is important is that some people have them and others can't, not what specific things they may be. A trip to Mars isn't something we suffer from missing out on--until out neighbor can go on one and we can't. Increasing absolute wealth does very little to bring status indicators within reach, as we are still competing with the same pool of peers whose wealth increases comparably alongside ours. Current high status indicators: a house in a desirable neighborhood, admission to an elite university, marriage to another high status individual, a job where one is not in a subservient position relative to peers. Billionaires can get these markers easily if they want them.

If your against interpersonal utility comparisons across space, shouldn't you be against interpersonal utility comparisons across time as well?

In other words, if we should avoid comparing the utility of a person living today to that of someone else living today, shouldn't we also avoid comparing it to that of someone else living in the past or future?

Yeah.

What one could do, as a Gedankenexperiment, is ask how a single person, with an unalterable utility function, achieves utility over time.

Let's take Julius C and assume a budget constraint. Julius was rich then, so lets let him be rich now. What could he buy? Not all the goods that Julius would buy today were available around his time. Thus he's worse off in his own day. Relative prices have changed, of course. Have they changed enough to overcompensate the loss for the non-existence of some goods? No way: Foreign conquest, in which Julius had a comparative advantage, has become more expensive. Women, important to Julius according to a commenter, have become more expensive, too. :-)

With women it really depends. Then as now, some men attract women easily. Caesar was one of them if ancient gossip is correct.

bionic eye - hit the nail on the head - andhe mein kana raja

Status and power is highly desirable. Caesar may not have Spotify or Netflix, but he could order armies, and spend in evening with 10 concubines.

I think many people would trade places to live as Caesar, even with the risk of bacterial infection.

Being at the top of social hierarchies is extremely valuable. Respect from other men and unlimited mating opportunities with women is essentially the most valuable good for most apes. Wealth is relative.

Write this down as a utility function: All the stuff others have is bad for you. That would change demand curves not one iota!

Wishing to trade places with Caesar just means "I wish I had a higher income". "Desirability", as the word is used, describes a state of mind, nothing more.

". . . and people then must have felt horribly poor and deprived of all pleasurable things. "

You were doing good up to this point. No one says this and the logic doesn't follow.

Sure, you can say that to have something we consider as trivial would have taken an impossible expense and we shouldn't value that modern thing at the same price as that impossibly expensive workaround to get an ancient equivalent.

But that doesn't mean that that modern thing isn't extremely valuable in old-world terms just because *we* consider it trivial.

Would you rather be Caesar with no .mp3 or would you rather be Tyler with?

Anyone who isn't just looking for more power at any expense would choose the latter, without hesitation. And that tells you how much better off we are today than the past.

Rather, Milankovic was doing well. Definitely need to spend more time proofing before I hit send.

Exactly. That is the baffling sentence. One could surely say that Caesar was poorer than many people today, even if he did not realise it. This would be still more obvious if the comparison was carried out on healthcare.

This misunderstanding is quite common in popular accounts of the 'happiness' literature, when people note (as if it is a surprising and meaningful observation) that reported happiness does not increase over time, despite economic growth. What do they expect - that someone in the 1950s would make sure they don't report higher than a 6 on a 10 point scale, because they know better times are coming? Doesn't makes sense - and nor, therefore, do the conclusions drawn from flattish self-reported happiness.

The hardest thing is to compare the relative importance for rich people of control over people. Crassus was rich enough that he could literally buy 10's of thousands of people and field armies that could destroy or support most nations. But he didn't have modern toiletries or cars or penicillin. Would he have traded his life for that of a low level office worker in Mexico City for an iphone, air conditioning, television and access to automobiles? I doubt it.

Put Crassus today not as a low level office worker, but make him "the richest man in Europe" today.
Better to be Crassus today! :-)

Actually, this can be simplified: Better to be rich and healthy than poor and sick. :-)

Most rich people aren't Crassus. They are people who built a business and sold it, or excelled in a profession. They do not get any utility out of controlling people. They want to live fulfilling lives.

Better to be the low level office worker in Mexico City who can have an iPhone, use air conditioning, drive a car, take penicillin when she is sick, and dance in a salsa club which is mostly what she wants to do anyway. Controlling people is for sociopaths.

The second paragraph would mean 'tis better to be poor now than rich in Julius' time. That may well be true, but only each individual can answer that for him or herself. There is no general answer.

It is an interessting comparison. However, comparing the past with the presence helps people which are not interessted in reducing inequality to argue "look you are so rich ...". This is not very helpful.

The article there is confusion between absolute and relative poverty. What is of great political importance is not the distribution of (average) poverty over very long and very far apart periods but the time but the distribution of poverty at a given time. The latter can severely limit not only the ability of people to consume, but the capability to enjoy their basic human rights. Think about someone who (i) is not able to use information technology, (ii) does not have a car and lives in a place where there is no public transport, (iii) lives in a place that is a so-called food-desert. Any of these people will not be able to enjoy what at the time of measurement are their basic needs. Such needs evolve of long periods of time by incorporating new manmade wants. What has a political importance is to compare relative poverty at a given time because it can indicate the need to compensate the poorest citizens to enable them to enjoy their basic human rights. The comparison over long periods can only indicate the average progress made.

What is the obsession with comparing wealth? Seriously- what's the motivation? I can't see any motivations other than greed and jealousy to care how much money someone else has or whether or not I'm "wealthier" or "poorer" than someone else. And that's a more telling commentary on the ones perpetuating this so-called "problem" than is my lack of interest in it.

Alex has internalized the first great lesson of history — the past was bad — without internalizing the second — people in the past were different. As far as I know Caesar never expressed a desire for internal lighting or to be able to trade his wrath in order for Julia to live ten more years. He certainly doesn’t seem to have been motivated by creature comforts or paternal affection. He did want to rule much of Europe, amass dignitas, and invade and ethnically cleanse France, though, and at least two of those things are much more expensive now.

Abstracting this, people in the past and present likely have very different utility functions but it is impossible for them to reveal their relative preferences by participating together in a market. As a result it is truly impossible to know if Caesar wants our many cheaper goods or his cheaper (and less free) labor or the future’s mars missions. Comparing past and present wealth is a chump’s game.

Comparing your situation to Caesars is silly. The primary effect of relative-wealth, psychologically, is feeling better or worse than your peers. Nobody except an economics or history geek regularly compares their circumstances to the past or future. We constantly check our position vs. our peers. And our position vs. our peers has a big effect on our happiness.

"I am baffled by the last two sentences. Bezos and Gates clearly are poor relative to people in the future who can choose to vacation on Mars."

It's relative, not objective. Bezos and Gates don't discount the price of their vacations in the present because in the future billionaires will go to Mars.

I think Alex is mixing up wealth and prices here.

Caesar's wealth varied wildly during his life -- at various times he was penniless and on the run, millions of sestercii in debt, and the richest man in Rome. Also, Republican Rome placed huge emphasis on frugal and simple living, so that even very rich Senators would not necessarily live like oriental potentates, even if they had enough resources to do it.

But c'mon. The man put on gladitorial games where all the combatants wore solid silver armor! Try buying one set of solid silver armor and see how much it costs you -- much less hiring a gladiator to fight to the death in it.

He had a huge house on the Palatine hill. Here's a list of luxury *apartments* on the *Aventine*

https://www.christiesrealestate.com/sales/rm-ita/list-view

Tiny square footage, wrong hill -- but Christie's doesn't even list the price.

He conquered most of modern day France and had first choice of the loot.

His girlfriend was Cleopatra -- yes, that Cleopatra. She owned, well, Egypt, basically.

By any standard, Caesar commanded resources far in excess of anyone living today.

Alex is getting the wrong answer because he thinks of wealth as the ability to purchase a small basket of modern goods which were not available in Caesar's time. He therefore sets the price as infinity (rather than undetermined) and determines that Caesar's wealth was zero.

A better way would be to price Caesar's basket of goods in the modern marketplace. As I have alluded to above, this value would be incomprehensibly large.

Put it this way -- Caesar transported to the modern world would not already own an iPhone. But he could rent out a couple of rooms in his house on the Palatine hill and buy all the iPhones he wanted.

Basic idea: Humans really, really care about status. It is probably the single most important thing we get to buy with money. Bezos and Gates have way, way more status than the average immortal person able to fly to Mars whenever they want in 2500. Perhaps you would prefer to be the average citizen in 2500 to being Bezos, but the value of all of that status in terms of stuff in 2500 leaves Bezos richer.

Which do you choose: being born in the US in 1940 or in India now in 2020? For me, India all the way: life expectancy is 4 years longer, infant mortality is lower, GDP per capita is growing 3-4 times faster.

By the way, in the early 2nd century AD during the peak of Roman power the wealthiest Roman senators had net worths of between 200 million and 400 million denarii. From prices in Pompeii you could buy 16 loafs of wheat bread with that, which is 25 dollars today. So the richest Romans had in bread purchasing power about 5 to 10 billion dollars. Not far off from the richest people in a country like Italy or Canada.

It's true that there are many goods that we can buy today that Romans couldn't. However, to be fair the Romans could enjoy some services that are not feasible today: rich people who had slaves could legally torture, rape and kill their slaves. Even average Romans could watch slaves kill each other on the amphitheaters, a form of entertainment that we do not have access today.

By the way, it's weird people use the Romans as example of how much we advanced over the last couple thousand years. In many ways the difference between the Romans and their contemporaries such as the Celts was as large as the difference between developed countries today and the Romans: the typical Roman house had orders of magnitude more material possessions than a Celtic hut.

And the Romans, ignorant of the existence of bacteria, washed their nether regions after defecating, rather than wiping them with a piece of paper.

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