Forget Comey: Just Look at the Great Enrichment!

I don’t know what you think about the Comey firing. It’s amazing to me how much people seem to have invested in it. Does it show that Trump is totally undisciplined and flopping around out of control? Or does it show that he’s just unafraid to make decisions? I don’t know.

But I have been hanging out with a young skull full of mush and I thought that I would like to show him the facts on what Deirdre McCloskey calls in her Bourgeois Era books: “The Great Enrichment.” Back in 1800, she writes, per-capita income was $3 per day in today’s dollars. But now, 200 years later, it is over $100 per day in the developed countries. There has never been anything like it, ever.

But wait! I thought. I have all that information on I have real GDP and I have population data. I could call up that data and show my friend what’s what. Well, almost. I have GDP in 2009 prices going back to 1792. And I have U.S. population for every year since ordered the first Census in 1790. But I needed to add a tweak so that I could display numbers as 2009 dollars per capita per day.

Here is what I came up with:

That is okay, but clearly we should look at the data on a log scale, because in our house, we believe that hockey sticks are for the birds. With a log scale, a constant income growth would look like a straight line going steadily upwards from left to right. Like this:

Here is a link so you can produce the chart for yourself and send it to all your liberal friends.

Just as McCloskey says, the numbers start at $3 per person per day in 1800, and right now, in 2017, the income in the U.S. per person per day is $143.

Notice the only really big glitch in the chart? Yep, the Great Depression, when the ruling class screwed up big time. But it is interesting to realize that we recaptured the loss by making tanks and trucks and planes, for us, for the Brits, and the Russkies, in World War II.

But why stop there? What about the Brits over at What does their chart look like? Excuse me while I go downstairs and make the necessary changes to the code and then upload it to the mighty AWS.

Here is the Brit chart of The Great Enrichment, only the data starts in Britain in 1692, after the Dutch invaded Devon with a 500-ship invasion fleet in 1688 and taught the Brits how to take notes.

These data confirm what Deirdre McCloskey argues. Before 1800, she writes, per capita income was flat, and had been flat forever. In fact you can see that per capita income was actually declining slightly in the 18th century in Britain while the Brits fought the Second Hundred Years War with the French. But then, after 1800 and the glorious victory at Waterloo, per-capita income started to rise, from £3 (in 2005 pounds) to £79 in 2017. That would be $4 per day compared to $3 in the U.S. in 1800, and $127 per day compared to $143 in the U.S. in 2017.

I have to say that I am surprised by these charts. I am surprised that the U.S. per-capita growth has been so steady over the decades. That’s not what the historians have told us. We are supposed to have experienced wild and crazy laissez-faire with huge booms and busts and incredible suffering until the advent of kind and compassionate liberal politicians. We are told to believe in misery in the 1830s, a Great Depression in the 1870s, the final failure of unregulated capitalism in the Crash of 1929, and a glorious era of good jobs at good wages in the 1950s. Maybe so, but per-capita income just kept going up, rain or shine. For the Brits, we are supposed to believe in a golden age in the late Victorian era: didn’t happen. Then we are supposed to believe in Britain as the sick man of Europe in the 1950s through the 1970s: didn’t happen. Basically, Britain has experienced strong per-capita income growth ever since it devalued the pound in the aftermath of the crash of 1929.

I like to believe in Deirdre McCloskey’s theory that it was bourgeois dignity and invention and “trade-tested betterment” that powered the Great Enrichment. But looking at the charts I wonder if that is the whole story.

The charts give me hope. Despite two hundred years of government by idiots we still seem to muddle through to ever rising per-capita income. So maybe it doesn’t matter whether President Trump is a genius or a bumbler after all.

Christopher Chantrill @chrischantrill runs the go-to site on US government finances, Also see his American Manifesto and get his Road to the Middle Class.

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