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September 16, 2007

This Capitalism Thing

An interesting little number from Robert Fogel:

What we currently call the poverty line is so high that only the top 6 percent or 7 percent of the people who were alive in 1900 would be above it.

One century, to move 86% of the population from below the poverty line to above it. Pretty good record really, ain't it?

September 16, 2007 in Economics | Permalink


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Not a relative figure in any way, Tim?

Posted by: jameshigham | Sep 16, 2007 3:34:14 PM

A request to Dear Timmy Elsewhere.

Can you produce a comprehensive guide to everyone who thinks that the "income gap" is somehow important (see recent subscriber Menzies Campbell in todays BBC report).

Explain that doubling everyone's wages would increase the gap in an absolute sense, but make the lower earners significantly better off in a practical and realistic sense, than the top earners (as per your conclusion here).

And, if the "income gap" _is_ so important, explain that if you cannot then demonstrate that the gap is caused by the top earners sucking money from the bottom earners, then don't assume that is the case.

And, explain, that if the top earners got into their lofty position through either luck, calculated risk, inheritance, hard work or innovation, why these concepts need to be curtailed ?

Please, Timmy E, you have a mine of information on this subject, I'd love to get a nice little statement I can refer people to.

Posted by: IanCroydon | Sep 16, 2007 3:40:35 PM

"One century, to move 86% of the population from below the poverty line to above it. Pretty good record really, ain't it?"

In the U.S., the income tax became law in about 1913. Taxes have been used ever since to improve the lot of the poor. So not only did taxation make the U.S. rich, it reduced poverty. More taxes will further increase such beneficial results. It is nothing short of moral failure to call for lower taxes. No doubt about it.

Posted by: John Fembup | Sep 16, 2007 5:37:41 PM

But surely the poverty line you believe in would have been set by whatever amount of dollars kept you alive in 1776? So already by 1900 I imagine 86% were above it.

Posted by: Matthew | Sep 16, 2007 6:11:02 PM

1900 is a better base than 1776, because by 1900 they had had to stop stealing land from the Injuns.

Posted by: dearieme | Sep 17, 2007 2:56:52 PM