Friday, June 22, 2012

The economic history of the last 2,000 years in one graph

That's what The Atlantic calls this graph:

That headline is a big promise. But here it is: The economic history of the world going back to Year 1 showing the major powers' share of world GDP, from a research letter written by Michael Cembalest, chairman of market and investment strategy at JP Morgan. 

...Before the Industrial Revolution, there wasn't really any such thing as lasting income growth from productivity. In the thousands of years before the Industrial Revolution, civilization was stuck in the Malthusian Trap. If lots of people died, incomes tended to go up, as fewer workers benefited from a stable supply of crops. If lots of people were born, however, incomes would fall, which often led to more deaths. That explains the "trap," and it also explains why populations so closely approximated GDP around the world...

Which is why the chart is interesting, but misleading. A better illustration would use multiple logarithmic scales to depict the size of aggregate GDP.

The Industrial Revolution and the technological advances in the West during the 19th and 20th centuries transformed global GDP and permitted the United States, especially, to scale productivity at a record-setting clip.

Of course, that was when the U.S. had a true, unfettered free market system and not a federal government that intrudes on every aspect of human activity -- be it the size of your toilet tank, the kind of light bulbs you're allowed to buy, and how much you should pay for your health care.

Funny. I didn't see any of those powers enumerated in the Constitution.


Anonymous said...

I call BS. Britain , Russia, France, Germany, etc. did not exist in 1 AD, yet they make up over 10% of this graph

Reliapundit said...

exactly right, doug:

the graph presumes that gdp is static and nations fight over a share.

the left believes/presuppposes this - and applies it to classes within nations, too.

the truth is that gdp is not static and is highly variable from quarter to quarter.

and the truth is that there is already an entirely just and fair way of "distributing" gdp between nations and between people within a nation:


each nation and each person is ENTITLED to what they earn - or trade in to each other.

when third parties insert themselves between what a nation or person EARNS and what they get it is INJUSTICE.


as walt williams has pointed out, there is no such thing as a "trade deficit". when walmart buys stiff in china, walmart trades a dollar asset for a goods asset - in an proportion that is agreed to and considered a fair even-steven trade by the parties involved. there is no deficit between walmart and china - or the usa and china - as a result of this trade anymore than you have a deficit with the supermarket when you buy groceries.

so, when politicians and bureaucrats try to insert themselves into international trade they are being every bit as invasive as when they insert themselves between people trading with each other within their own nation.

our constitution specifically limited out governments power to interfere in these trades.

alas, we have strayed a great great deal from that ideal.

to get back to where we belong, we need to open the eyes of a great many people - most of them in the "middle" and on the left.

exposing their false presuppositions is how.

as exposing the falsehoods embedded in this graph does.