Reason.com

Free Minds & Free Markets

The Most Important Graph in the World

There has been a massive increase in wealth throughout the world in the last two centuries.

Jonathan Haidt, the well-known psychologist from New York University, started as a "typical" liberal intellectual, but came to appreciate the awesome ability of free markets to improve the lives of the poor. Earlier this year, he penned an essay in which he pointed to what he called "the most important graph in the world." The graph reflected Angus Maddison's data showing a massive increase in wealth throughout the world over the last two centuries and which is reproduced, courtesy of Human Progress, below.

The "great enrichment" (Deirdre McCloskey's phrase) elicits different responses in different parts of the world, Haidt noted. "When I show this graph in Asia," Haidt writes, "the audiences love it, and seem to take it as an aspirational road map… But when I show this graph in Europe and North America, I often receive more ambivalent reactions. 'We can't just keep growing forever!' some say. 'We'll destroy the planet!' say others. These objections seem to come entirely from the political left, which has a history, stretching back centuries, of ambivalence or outright hostility to capitalism."

Haidt's experience mirrors my own. When giving talks about the benefits of free markets, audiences in Europe and America invariably note the supposedly finite nature of growth and express worry about the environmental state of the planet. Why? In Haidt's view, capitalist prosperity changes human conscience. In pre-industrial societies, people care about survival. "As societies get wealthier, life generally gets safer, not just due to reductions in disease, starvation, and vulnerability to natural disasters, but also due to reductions in political brutalization. People get rights."

This more prosperous generation, then, starts caring about such things as women's rights, animal rights, gay rights, human rights, and environmental degradation. "They start expecting more out of life than their parents did." All that is fine, of course, so long as the pampered youth in the West and newly empowered youth in the Far East remember that roughly 800 million people in the world, many of them in Africa, still live in absolute poverty and experience the kinds of existential challenges that only free markets can solve. Denying dirt-poor people access to cheap fossil fuel energy, for example, can mean a death sentence to a newborn child on life support in an electric-powered incubator in rural Africa.

Let me conclude with two final thoughts. First, there is no obvious reason why growth should not continue indefinitely—although future growth will likely be more dependent on technological change than in the past. In the West, for example, we cannot replicate the growth boost that resulted from the entry of large number of women (50 percent of the population) into the labor force. Second, let's not fall into the trap of thinking that, because the initial stage of industrialization was bad for the environment, pre-industrial society saw man and nature coexist in harmony. Part of the reason why the Industrial Revolution started in England was that the country had to switch from almost depleted wood to coal as a source of energy. Industrialization, and subsequent enrichment, saved European forests, and it can do so in Africa as well.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Fist of Etiquette||

    'We can't just keep growing forever!' some say. 'We'll destroy the planet!' say others.

    Why, the pie will spill over and burn the oven!

  • Brian||

    Before it vanishes, and we all die of starvation.

    They can't make up their minds between themselves.

  • Radioactive||

    is that a hockey stick?

  • some guy||

    Hopefully this one won't have a decline that needs hiding.

  • Swiss Servator||

    *applause*

  • BakedPenguin||

    Anyone who doubts free markets should have to explain how Hong Kong, a rock in the Pacific Ocean utterly without natural resources, obtained one of the highest living standards in the world.

  • LynchPin1477||

    Exploitation, duh.

  • Princess Trigger||

    Colonialism?

  • Cloudbuster||

    Actually, yes to Colonialism. If the British hadn't colonized it, it would be just another Chinese city. Colonialism of ideas -- Western free market ideas.

  • BakedPenguin||

    They were very lucky to get a governor who still believed in free markets during a time when socialism was ascendant.

  • some guy||

    Or just look at mainland China over the last few decades. The moment they starting allowing some property rights and markets to develop millions of people immediately started lifting themselves out of abject poverty. It's really been an amazing thing to behold.

  • Sevo||

    There are millions of non-starving Chinese who appreciate this.

  • mtrueman||

    Because dying of chronic respiratory disease is so much more preferable.

  • BigW||

    Well, I know you're being snarky, but yes, dying after years of chronic respiratory disease is much more preferable to quickly starving to death..... Its still bad, but you aren't going to get a chronic disease if you've already starved to death....

  • mtrueman||

    chronic respiratory disease it is then! It's the peoples' choice.

  • Sevo||

    mtrueman|12.13.16 @ 6:40PM|#
    "chronic respiratory disease it is then! It's the peoples' choice."

    So our recurring lying PoS has only this to offer? Why should anyone be surprised at your stupidity and dishonesty?

  • mtrueman||

    "So our recurring lying PoS has only this to offer?"

    No, I was about to sing the praises of a communist regime where millions of people die of preventable diseases, but others have beaten me too it.

  • some guy||

    No, I was about to sing the praises of a communist regime where millions of people die of preventable diseases, but others have beaten me too it.

    Did anyone here ever say modern China was perfect? No, we're saying that modern China is better than Mao's China because modern China allows for some property rights and markets. We're not singing the praises of China. We're singing the praises of property rights and markets. Stop being mendacious and maybe people will start taking you seriously.

  • mtrueman||

    "Did anyone here ever say modern China was perfect? "

    They are saying China today is amazing. Because they haven't experienced the filth of the place. Just nice clean graphs.

  • some guy||

    They are saying China today is amazing.

    Who's this they? Anyone we know? I said it's amazing to watch hundreds of millions of people being lifted out of abject poverty. I never said China was an amazing place. Though, I'll say it now. China is an amazing place (for reasons not yet discussed here).

  • Sevo||

    mtrueman|12.13.16 @ 3:19PM|#
    "Because dying of chronic respiratory disease is so much more preferable."

    Yes, it is.
    But I know shitheads like you much prefer mass starvation, since you're a fucking idiot.

  • mtrueman||

    "Or just look at mainland China over the last few decades. "

    But you've never actually been there, have you? Especially spent any time in her cities.

  • mplspolitics||

    Did you just assume China's gender?

  • mplspolitics||

    Did you just assume China's gender?

  • Sevo||

    "But you've never actually been there, have you? Especially spent any time in her cities"

    I have, and oh cite-less one, go ahead and tell us about it. I'll be more than happy to call you on your constant stream of bullshit.

  • mtrueman||

    The cities are dirty. Industrialization has made the air less breathable. But people prefer it that way.

  • Sevo||

    mtrueman|12.13.16 @ 6:42PM|#
    "The cities are dirty. Industrialization has made the air less breathable. But people prefer it that way."

    You slimy asshole, people prefer it that way because they are not now DYING OF STARVATION!
    Is that a mystery to you? How fucking stupid are you?
    Go try to find a place where you can pull your head out of your ass and not be shown to be an embarrassment to humanity.
    Like your pathetic blog.

  • mtrueman||

    "You slimy asshole, people prefer it that way because they are not now DYING OF STARVATION!"

    You think it's a choice of one or the other? What commie bastard told you that?

  • Bill||

    They are now trying to fix this, as we did in the 1970's. They are moving to cleaner
    coal plants and building a lot more nuclear plants.

  • some guy||

    You think it's a choice of one or the other?

    You do remember that we were originally talking about the value of personal property rights and markets, right? You're the one who decided it was either abject poverty or chronic respiratory disease. (@ 3:19PM on 12/13)

  • mtrueman||

    "You do remember that we were originally talking about the value of personal property rights and markets, right?"

    Someone said that China was an amazing place and I noted that chronic respiratory diseases were causing millions to suffer unnecessarily. What have property rights done to alleviate this? They've done wonders for starvation, but I don't see how they've put an end to air pollution. It's really dreadful, I assure you.

  • some guy||

    I noted that chronic respiratory diseases were causing millions to suffer unnecessarily.

    Define unnecessarily. I suppose if you were God Emperor of the world you could dictate a cleaner path from poverty to wealth for China. But alas, they are stuck with compromises between mere mortals.

  • mtrueman||

    "Define unnecessarily."

    Check your dictionary. Communists thought the starvation of millions was necessary. They also think that millions suffering from respiratory was necessary. All in the name of progress.

  • generalisimo14||

    The same point can be made about working conditions and child labor in the west a century ago, that they were deplorable. Yes they were deplorable to modern standards, but were preferred to the slow starvation and depredation of a life of abject poverty and subsistence in the countryside. People prefer their lives in the smog to one of toil in the dirt, don't forget alternatives when decrying the evils of capitalism. Perhaps another Great Leap Forward would be better? But this time with the right top men at the helm?

  • College Sex Police||

    I actually currently live in the Mainland, and have been for a few years. The amount of pollution is staggering, especially in the winter. Having said that, I've been out in some of the less developed rural areas, and there is some cray-cray abject poverty. The Chinese want a higher standard of living, and they are working hard on getting it, and I hope that they do, but the pollution is baaaaad, and they think so to. The question is wether or not their government will either change the way they get most of the power (coal right now) or open up markets for more clean energy.

  • Sevo||

    College Sex Police|12.14.16 @ 12:14AM|#
    "I actually currently live in the Mainland, and have been for a few years. The amount of pollution is staggering, especially in the winter."

    No doubt and no doubt some is caused by power generation, etc.
    But you're on the east end of a 20,000Km land mass, on the receiving end of everything anyone tossed into the air over that distance, not to mention the loess oil particulate lifted into the air by the westerlies.
    Don't know where you are, but Xian, for instance, suffers from environmental problems far more than those caused by development. Topologically, it's the opposite of the LA basin, but gets all the crap headed east and dropping right into that bowl.
    I'd bet Qin Shi Huang griped about the pollution, even as he had the warriors buried.

  • Sevo||

    Make that: "loess *soil* particulate"

  • some guy||

    Good to see opinions from others who have actually been to China and know actual Chinese people. I take it mtrueman is a known troll?

  • mtrueman||

    " open up markets for more clean energy."

    No need to open markets. Nuclear programs in communist countries like China and North Korea are doing fine without them. Basically, they're the only places in the world where nuclear is thriving.

  • some guy||

    But you've never actually been there, have you? Especially spent any time in her cities.

    I've been to China 5 times, including Hong Kong, Beijing and Shanghai. In fact, I was in Beijing on one of the worst AQI days they've ever had. It peaked near 500 that day IIRC. And yeah, it sucked. You could barely see across the street. But that wasn't the norm. The average AQI over the year is under 200 (which is "only" moderately polluted). And Beijing has shown it has the ability to drop the AQI below 100 (good/excellent) as they do occasionally during major parades and events. They just don't keep it down there because the people in the city have, themselves, decided that productivity has a bigger impact on their total quality of life than pristine air would. They know that as they get wealthier they will be better able to fight pollution without sacrificing other qualities of life. That's how it went in the West. Western industrial areas used to be just as polluted as Beijing, if not more so. Now we're so wealthy that you can't swing a dead cat without having to do an environmental impact assessment.

    Also, I know people who grew up in mainland China in the 50's and 60's. They are adamant about how things are much better now than they were back then. And these aren't anti-Communist hardliners I'm talking about. They're just normal people trying to live normal lives.

  • mtrueman||

    "Also, I know people who grew up in mainland China in the 50's and 60's. They are adamant about how things are much better now than they were back then."

    The air in the cities was not cleaner back then. These chronic respiratory diseases are a recent thing. They are not an improvement.

  • some guy||

    The air in the cities was not cleaner back then.

    Yes it was. It was Western cities that had terrible air back then.

    These chronic respiratory diseases are a recent thing.

    True... because the air is dirtier now than it was then.

    They are not an improvement.

    The life expectancy in China in 1960 was less than 44 years. Now it's over 75. And quality of life is much better now than back then too. Most people agree that its better to die of cancer at 75 than of starvation or communicable disease at 44.

  • mtrueman||

    "Most people agree that its better to die of cancer at 75 than of starvation or communicable disease at 44."

    If you insist. My point is that the dirty air in China is responsible for a lot of unnecessary suffering. This was not the case in 1960.

  • mtrueman||

    "They know that as they get wealthier they will be better able to fight pollution without sacrificing other qualities of life."

    I'm surprised nobody has disputed this. How does one fight anything with making sacrifices? I believe many here dispute Climate Change essentially on the grounds that the sacrifices required for addressing it are too high.

  • Bill||

    As the country gets wealthier and they have enough
    energy, they can afford more expensive nuclear and
    clean coal. It's actually pretty simple.

  • some guy||

    I'm surprised nobody has disputed this. How does one fight anything with making sacrifices? I believe many here dispute Climate Change essentially on the grounds that the sacrifices required for addressing it are too high.

    Is there a typo in there somewhere? Because these sentences don't make sense. Are you suggesting that its possible to have the best of all worlds simultaneously? That no one should ever prioritize goals?

    And yes, I believe that the cost of stopping climate change would be much greater than the cost of not stopping climate change.

  • mtrueman||

    "the cost of not stopping climate change"

    And what is the cost of not stopping climate change and how did you arrive at the figure?

  • mtrueman||

    You must have some figure in mind. Why not share it with us?

  • College Sex Police||

    I've been to Hong Kong. Hong Kong is awesome. The Hong Kongers are great. The Mainlanders are well on the way to strangling Hong Kong.

  • Hank Phillips||

    Hong Kong was the entrepost for dumping addictive opiates into China. It would he a neat exercise to work out how much of the West's comfort was siphoned off that way before 1912.

  • some guy||

    In the West, for example, we cannot replicate the growth boost that resulted from the entry of large number of women (50 percent of the population) into the labor force.

    Never say never. Over the next few generations automation is going to cause a growth boost that will blow that one away. Income inequality will soar, but most people won't care because all the stuff necessary for a happy, healthy and fulfilling life will be damn near free. By the end of this century (human) labor costs will have effectively vanished, and this will have a drastic impact on our society, but it will be a good thing.

  • LynchPin1477||

    most people won't care

    I hope you are right, but citation needed. It seems to me like a fair fraction of people define wealth and comfort in relative terms after crossing some basic threshold. I fear envy is baked in.

  • Radioactive||

    we bake fear into all our products, it's an essential ingredient of the new age, along with angst (which tastes like shit to be honest)

  • some guy||

    Sure, people bitch and moan about the Jones' all the time, but half the country doesn't even bother to vote, much less be actually politically active. That's because pretty much everyone, even at the bottom of the income inequality scale, has a comfortable life. If you make that life even more comfortable (and even less equal), they'll care even less. If all of you do is complain about inequality on Facebook then you don't really care about inequality.

  • Brian||

    Just you wait and see when our factory orphanages can come out of the shadows of the black market.

  • some guy||

    Automation is going to make orphan labor obsolete. You better start divesting now if you want to stay ahead of things.

  • BestUsedCarSales||

    I've already started breeding leaner, meaner orphans who require little food and no hugs whatsoever.

  • Animal||

    Wait, you were hugging your orphans? What the hell! They'll all start expecting it now.

  • Pat (PM)||

    You better hope drug legalization happens before then, because somewhere around 16% of the population has an IQ under 85. That's 51 million people in the US of A. Even with a welfare stipend sufficient to eat all the fast food they can stuff down their gullet in front of a 95" flat screen TV streaming porn and sitcoms from all corners of the universe, the result of having that many people idle and unproductive is probably not going to be pleasant in the short run.

  • some guy||

    But they will literally spend all day sitting in front of a flat screen stuffing fast food down their gullets. What's to worry about? Getting into trouble is far too much effort when you've got a full belly and broadband internet access.

    Seriously, though, MJ is well on its way to decriminalization and I expect the other drugs to follow along eventually.

  • Swiss Servator||

    Land of the Lotus Eaters?

  • College Sex Police||

    Good god, 16%? I was until moments ago pleasantly unaware of the actual percentage. This wreaks vaguely of Brave New World. The problem is that I don't think that you're wrong.

  • Bill||

    Child and infant labor.

  • ||

    Let's not forget that government spending counts as GDP, too. It would be really nice if there were two DP figures: one for non-government DP, and one for government "production".

  • some guy||

    It's all government spending multipliers, right? All of it.

  • UnCivilServant||

    I'd love to see the sources that have the Roman GDP at the same value as the GDP of the Dark Ages. And why is that first graph in absolute dollars when most of the timeline predates the introduction of the thaler? I know you're trying to make a point but you're combining sparce, incomperable data to obsessive compulsive record keeping in two entirely different currency sets. They have trouble agreeing on how many people were on the planet in most of that timeline, let alone the agregate value of economic activity.

    I'm sorry, but you lost me at the cartoonish mishandling of data in that first graph.

  • LynchPin1477||

    Are any of those things likely to matter beyond a factor of a few?

  • UnCivilServant||

    Actually I'd just love to see the economic data for the Roman Empire and middle ages.

    But the paucity of data points before obsessive data collection (probably for the purposes of taxation) makes that hard to do.

  • Radioactive||

    heh, heh...you said hard, heh heh heh...

  • Sevo||

    "Actually I'd just love to see the economic data for the Roman Empire and middle ages.
    But the paucity of data points before obsessive data collection (probably for the purposes of taxation) makes that hard to do."

    "Helenistic Economies": "This is the typical ration we find in many of the administrative texts of all periods from Babylonia...
    [...]
    ...we can consider the figure of 1.25liters per person per day as a barley-equivalent representing all food stuffs, and this works at about 450 liters per person per year.
    What is the significance of this figure? When multiplied by population, it gives us an idea of what the total agricultural output of Mesopotamia may have been..."
    Estimates and extrapolations, but based on some real data and certainly within a decimal place.

  • mtrueman||

    "But the paucity of data points before obsessive data collection (probably for the purposes of taxation) makes that hard to do."

    These are economists we're talking about here. What you're describing here is a piece of cake.

  • some guy||

    I see your point, but I'm also comfortable with the assumption that pretty much everyone was living in abject poverty before the 1800's, especially by today's standards. Except maybe the Atlantans.

  • Tejicano||

    I also often reflect on how much better life is for the average person in today's first world. I would bet that many kings of old, if they knew how much better things would be, would gladly give up his position to be an average American in the 21st century. He would no longer have to worry that he might die of an abscessed tooth or of any number of diseases common to his age, the wide variety of foods we have, the ability to be transported by car, the abundance of knowledge, to have your biggest decision of the day very often just which manner of thousands of choices of entertainment you will pursue in the evening.

  • Scarecrow & WoodChipper Repair||

    I don't think you have to go even that far back. Didn't President Harding's son die from an infected blister he got playing tennis?

    How many people would want to be a king or robber baron (I know they weren't) in 1900 compared to any ordinary joe today? Only control freaks. But I bet John D. Rockefeller would rather grow up today than in the mid-late 1800s -- except for the ridiculous regulations which make it so much harder to innovate your way to wealth.

    Even life 50 years ago would be intolerable to most people today -- medicine was on the upward slope but still pretty primitive, there was no internet, no personal computers, TV was a great wasteland, air travel was expensive, phone calls were expensive. Weather forecasts sucked. Moral censorship sucked.

  • Bill||

    Silent Cal Coolidge's teenage son.

  • Scarecrow & WoodChipper Repair||

    Comparing Romans and Medieval peasants is like comparing bees and wasps -- there may be differences, but they are so meaningless when both are compared to, say, peasants in 1800.

  • Hank Phillips||

    Good points. I like graphs for which I can get hands on the raw data.

  • Longtobefree||

    That first graph was plagiarized from the climate guys, so I stopped reading.
    But everyone has to post, so I will say great massive increases in wealth just give leftists more to confiscate.
    Sooner or later, they will prevent welfare recipients from driving to the store to use their benefits, and Uber will have to start a delivery service.

  • Holger da Dane||

    The total amount of wealth is not important, even when the lowest standard of living is higher than ever. The only important thing is how that wealth is distributed. We simply can't have some people being rich, and some people merely being comfortable, everyone needs to be equalthe same for there to be any kind of justice.

  • Mindyourbusiness||

    Yeah, Holger, that's true. Socialism gives everybody the right to be equally poor, miserable and ignorant...except the elites.

  • Holger da Dane||

    Well, the elites is taking on the ultimate sin of wealth so they may better guide us through our misery. For the greater good comrade!

  • Nunya||

    So we should have killed the guy that invented the wheel. Smug bastard dared to upset the equality we all had. And the guy that created the atlatl. And that guys that continue to improve the arrow. Ooh. And those that improved the sling, because they were incorrectly proportioning rocks to other people.

  • Azathoth!!||

    This more prosperous generation, then, starts caring about such things as women's rights, animal rights, gay rights, human rights, and environmental degradation. "
    This more prosperous generation, then, starts thinking they're the only generation to ever care about anything besides literally themselves "


    FTFY
  • BestUsedCarSales||

    I wonder if unbounded growth is possible. We could be in the middle of a sigmoid, one of the most common functions in nature.

    Though, there is so much poverty in the world still that I expect their industrialization and improved standards will keep up on the fast uptick for a while now.

  • n6532l||

    I find it amusing that increased trade is used as a justification of eliminating tariffs. Do the people making this argument not realize that the reason for having tariffs is to curtail trade. Tariff mean the the people collecting wages for making the products consumed are your fellow citizens not foreigners.

  • DonW||

    I just assume if I see a hockey stick shape graph someone is pulling my leg or something.

  • Roger Sharp||

    "First, there is no obvious reason why growth should not continue indefinitely."

    ..... apart from the absolute fact that nothing in nature behaves like this. Boom - bust. You can't enjoy the benefits that science brings, but ignore the parts you don't like. Science isn't left or right - it's science. An attempt to understand the facts.

    You also forget that our current economic system is only 12,000 years old - from when we started farming, having run out of food. Before this, we lived in groups of up to 150, and actually had a better time than you might imagine.

    Socrates said: "The only thing I know is that I know nothing", and right down the ages, scientists have believed in this principle. To say otherwise would be stupid. A trivial example: When was Jesus born? The answer is 4-6 BC. When did you think it was?

    I'll give you a fact. Nothing is certain, but on current trends, the human extinction point is within 300 years. This is the private view of 26 of the world's top experts when allowed to report their opinion anonymously.

    Here's another: It's already far too late to stop global warming. How many climate change scientists have you seen on the telly recently? Very, very few. Why could that be?

  • Hank Phillips||

    Um... Because the data freely available at realclimatescience.com shows that their predictions have always been wrong, and their current data is as fake as a three-dollar bill? Seen the 97% of Climate Cassandra scientists listed anywhere? But way over 31000 real scientists back the Petition Project.

  • Hank Phillips||

    I mistook it for a population graph at first glance. Indeed, the 200,000 people added to the population so far today are the sort of thing nobody likes to mention. But animal studies--the kind politicians use for passing laws to ban plants and coerce humans--indicate that aggression increases with population density. If applicable, forcing people to reproduce unwillingly is not the sort of policies that are going to do an anti-coercion party any kind of good in the near-term.

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online