From the perspective of the very long history of social history we know that economic prosperity and lasting economic growth is a very recent achievement of humanity. In this section we will look at this more recent time and will also be able to study the inequality between different regions – both in respect to the unequal levels of prosperity today and the unequal starting points for leaving the poverty of the pre-growth era of the past.
Economic prosperity is measured as the the value of all goods and services produced by a country in one year divided by the country’s population – this is GDP per capita. The change of this from one year to the next is economic growth. This entry shows that the current experience of economic growth is an absolute exception in the very long-run perspective of social history and it shows when – for the first and only time in the very long history of humanity – societies left the abject poverty of the long pre-growth era.
# Empirical View
# GDP per Capita growth around the World Since the Year 1 until Now
There are many reconstructions of GDP per capita over the last centuries; here I will focus on the reconstructions by the british economist Angus Maddison who was working in Groningen (Netherlands) and where after his death in 2010 younger colleagues are advancing his work in the ‘Maddison Project’.1
The following graph shows Maddison’s reconstructions for eight major world regions.
Click on ‘Expanded’ to see the share of the world GDP produced by each world region over time.Full screen view Download Data Download as image
Maddison’s data confirms what he have learned from the very long-run perspective before: Before the onset of modern economic growth every region in the world was very very poor. But there are also important insights gained from Maddison’s data: The starting points of economic growth are very different from region to region. Until the year 1000 everyone was equally poor but we learn that as early as the year 1500 Western Europe had achieved some very limited economic prosperity and until the early 19th century it could slowly increase the economic wealth. But the wealth enjoyed at the time is still incomparably low with the level that Europe enjoys now at the beginning of the 21st century – starting from 772 Int. $ in 1500 it doubled until 1820 but since then it increased more than 12-fold!3
In 1700 the ‘Western Offshoots’ of Australia, New Zealand, Canada, and the US were as poor as any region except Western Europe. But although they started later to leave poverty behind they catched up quickly with Western Europe and have surpassed it by 1900.
It is often the case that progress – because it is not happening equally fast everywhere – creates inequality between regions but if we compare the economic prosperity of every region in 2003 with any earlier time we see that every single region is richer than ever before in its history. Though some regions are more productive than others every region is doing better than ever before – hugely better.
After looking back on more than a million years of world poverty the question the question arises: Why did economic growth happen before? Why were our ancestors kept in poverty for millennia after millennia? To answer this question it is helpful to look at just a single country.
# Over the last Millennia until Now
Data on economic growth is now routinely published by statistical offices but for the past researchers had to reconstruct accounts of the economic productivity. These reconstructions are arguably very uncertain. Nevertheless it is absolutely clear that compared to the prolonged growth of economic productivity in the last centuries the productivity has always been very low before: The difference of prosperity is hugely greater than the uncertainty of the exact values.
I have included one reconstruction of GDP per capita over the very very long run – the last 1.002.000 years. The economist J. Bradford DeLong has constructed the data that I have visualized in this interactive graph.
It is not easy to show more than 1 million years on the x-axis of a single graph when all the action just happened in the very last couple of hundred years. If I would have chosen to give each year the same space on the axis the graph would simply look like this: ˩.
For this reason I reverted to give years very unequal spacing – admittedly a not so nice way of showing this data either.
Average World GDP per Capita 1 Million BCE until Now (in 1990 International Dollars) – Bradford DeLong5
What we learn from this chart is that on average the people of the past were many times poorer than we are today. For all the thousands and thousands of years before 1800 the average GDP per capita was lower than just 200 Dollars (1990 International Dollars).6 Prosperity is a very recent achievement that distinguishes the last 10 or 20 generations from all their ancestors. In 2000 the average GDP was standing at 6539$ – more than 30 times the average of the past.
# The last 2000 Years
From the data that we have discussed before we know that with respect to economic growth all the action really just happened very recently. It is true that in the pre-growth era some people were very well off – but this was a very tiny elite from tribal leaders to the pharaohs to kings and popes. Yet the average person was very much worse off in these unequal societies.
The destitution of the common man only changed with the onset of economic growth and the time when this changed happened is depicted in the following graph – this time again on a regular time axis. From this it becomes clear that economic prosperity was only achieved over the course of the last millennium and really just over the last couple of hundred years or actually the last hundred years. And to be really honest it was mostly achieved over the second half of the last hundred years.
The Last 2,000 Years of Growth in World Income (GDP per Capita) and Population – Visualizing Economics7
# Data Sources
I have collected all data sources on GDP, GDP per capita, incomes at a dedicated entry on GDP Data here on ‘Our World in Data’.