How do we compare #wealth
over time? I came across one #fun
recently about the #highest-paid
of all time. The first names that come to your mind might be #TigerWoods
, or #CamNewton
. However, according to this source
, the title belongs to Gaius Appuleius Diocles, a #chariot
of ancient #Rome
By comparing his prize #money
to the pay of Roman soldiers and extrapolating based on the pay of modern soldiers, the author arrives at the dubious modern equivalent of $15 billion dollars. For the sake of argument, let’s accept his calculation.
If this comparison is a fair one, Diocles would be richer than #ElonMusk
, or #RalphLauren
Diocles Was Dirt Poor by Modern Standards
But it’s not a fair comparison. Nominal dollar figures are no good when it comes to comparing wealth over time, and the comparison becomes worse the larger the time difference. The reason is because #wealth
is not simply the money in your bank account, but what you can buy with your money.
Compare the wealth of a man stranded on a desert island with trillions of dollars and the wealth of a man with $100 in his pocket standing in a Walmart. Obviously the man who can spend his money on the goods he desires is the wealthier man.
Diocles is like the man stranded on the island. He had no #air-conditioning
, or #rock
. He had no Big Macs, Coca-Cola, #StarWars
movies, or Colgate. By modern standards, Diocles was dirt #poor
Likewise, by ancient standards, many below the poverty line today are incredibly wealthy.
What Causes Prosperity?
I do not say this to minimize the importance of getting people out of #poverty
, however it is defined. I would like for everyone to be able to not only survive but enjoy their lives as much as possible. However, in discussions about #income
and how they have changed over #time
, understanding the #difference
wealth gives some perspective.
Somebody with little more than a small rented apartment with central air and heat, running water, and electricity to power a small TV and various appliances is wealthier than even the #kings
Therefore, the important question we should be asking is not “how do we eliminate wealth and income disparities today?”, but “what caused the dramatic increase in standards of living for populations as a whole over the past few centuries?”
The answer is #capital
, international #trade
, and unleashed #entrepreneurship
. Unfortunately these mechanisms of economic #growth
are often accused of “causing poverty” and creating the nominal income inequality we see today.
A Side Note on Income Inequality
Strictly defined, income and wealth inequality are …https://mises.org/blog/wealth-isnt-just-measured-money-%E2%80%94-its-measured-choices
How do we compare wealth over time? I came across one fun fact recently about the highest-paid athlete of all time. The first names that come to your mind might be Tiger Woods, Michael Jordan, or Cam Newton.