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01 / 05
Rural Life in the past Was a Battle for Survival

Blog Post | Economic Growth

Rural Life in the past Was a Battle for Survival

People in pre-industrial Europe generally lived a miserable, hand-to-mouth existence which would be foolish to romanticize.

In my last two pieces for CapX, I sketched out the miserable existence of our ancestors in the pre-industrial era. My focus was on life in the city, a task made easier by the fact that urban folk, thanks to higher literacy rates, have left us more detailed accounts of their lives.

This week I want to look at rural life, for that is where most people lived. At least theoretically, country folk could have enjoyed a better standard of living due to their “access to abundant commons – land, water, forests, livestock and robust systems of sharing and reciprocity,” which the anthropologist Jason Hickel praised in a recent article in The Guardian. In fact, the life of a peasant was, in some important aspects, worse than that of a city dweller.

Before industrialisation, European society was bifurcated between a small minority of the very rich and the vast majority of the very poor. Sébastien Le Prestre de Vauban, a military engineer during the reign of Louis XIV, estimated that the French population consisted of 10 per cent rich, 50 per cent very poor (fort malaise), 30 per cent near beggars and 10 per cent beggars. Likewise, Francesco Guicciardini, an Italian historian and friend of Niccolò Machiavelli, wrote that “except for a few Grandees of the Kingdom [of Spain] who live with great sumptuousness, one gathers that the others live in great poverty”.

Indeed, a census taken in the Alencon area of the Alsace region in France at the end of the 17th century found that of the 410,000 inhabitants, 48,051 were beggars. That amounts to about 12 per cent of the population. “In Brittany, of a population of 1,655,000, there were 149,325 beggars, or about 9 per cent.” Out of the English population of 5.5 million at the time of Henry VIII, 1.3 million (i.e., nearly a quarter) were described as “cottagers and paupers”. By implication, rural cottagers and urban paupers were deemed to have shared similar standard of living. The vast majority of these wretches lived in the countryside.

That was during “normal” times. As Carlo Cipolla observed in Before the Industrial Revolution: European Society and Economy 1000-1700, “in the cities the number of poor soared in the years of famine because starving peasants fled the depleted countryside and swarmed to the urban centres, where charity was more easily available and hopefully the houses of the wealthy had food in storage. Dr Tadino reported that in Milan (Italy) during the famine of 1629 in a few months the number of beggars grew from 3,554 to 9,715.” So much then for the vaunted benefits of “access to abundant commons”.

An account of rural life in 16th century Lombardy found that “the peasants live on wheat … and it seems to us that we can disregard their other expenses because it is the shortage of wheat that induces the labourers to raise their claims; their expenses for clothing and other needs are practically non-existent”. In 15th century England, 80 per cent of private expenditure went on food. Of that amount, 20 per cent was spent on bread alone.

By comparison, by 2013 only 10 per cent of private expenditure in the United States was spent on food, a figure which is itself inflated by the amount Americans spend in restaurants. For health reasons, many Americans today eschew eating bread altogether.

What about food derived from water, forests and livestock? “In pre-industrial England,” Cipolla notes, “people were convinced that vegetables ‘ingender ylle humours and be oftetymes the cause of putrid fevers,’ melancholy and flatulence. As a consequence of these ideas there was little demand for fruit and vegetables and the population lived in a prescorbutic state”. For cultural reasons, most people also avoided fresh cow’s milk, which is an excellent source of protein. Instead, the well-off preferred to pay wet nurses to suckle milk directly from their breasts.

The diet on the continent was somewhat more varied, though peasants’ standard of living was, if anything, lower than that in England. According to a 17th century account of rural living in France: “As for the poore paisant, he fareth very hardly and feedeth most upon bread and fruits, but yet he may comfort himselfe with this, and though his fare be nothing so good as the ploughmans and poore artificers in England, yet it is much better than that of the villano [peasant] in Italy.”

The pursuit of sufficient calories to survive preoccupied the crushing majority of our ancestors, including, of course, women and children. In addition to employment as domestic servants, women produced marketable commodities, such as bread, pasta, woollen garments and socks. Miniatures going back to the 14th century show women employed in agriculture as well. As late as the 18th century, an Austrian physician wrote, “In many villages [of the Austrian Empire] the dung has to be carried on human backs up high mountains and the soil has to be scraped in a crouching position; this is the reason why most of the young people [men and women] are deformed and misshapen.”

As Johan Norberg noted in Progress: Ten Reasons to Look Forward to the Future, it was common for “children to start working from seven years of age”. Their working conditions varied, but one 16th century ordnance in Lombardy found that supervisors of work in rice fields “bring together a large number of children and adolescents, against whom they practice barbarous cruelties.… [They] do not provide these poor creatures with the necessary food, and make them labour as slaves by beating them and treating them more harshly than galley slaves, so that many of the children … die miserably in the farms and neighbouring fields.”

The idealised imagery of rural life portrayed by Romantic painters, philosophers and poets provides the modern reader with a highly skewed sense of reality. “We do know,” Cipolla writes, “that the mass [of the population] lived in a state of undernourishment. This gave rise, among other things, to serious forms of avitaminosis. Widespread filth was also the cause of troublesome and painful skin diseases. To this must be added in certain areas the endemic presence of malaria, or the deleterious effects of a restricted matrimonial selection, which gave rise to cretinism.”

This piece concludes a series of articles in which I have shown how contemporaneous evidence from town and country alike shows clearly that whatever their “access to abundant commons”, people in pre-industrial Europe generally lived a miserable, hand-to-mouth existence which it would be foolish to romanticize in any way.

This first appeared in CapX. 

Wall Street Journal | Household Income

US Incomes Climbed Last Year, Census Bureau Says

“Household incomes rose last year for the first time since the Covid-19 pandemic began, reflecting the effects of easing inflation and a strong job market.

The new data from the U.S. Census Bureau on Tuesday signaled an improvement in 2023 after inflation that spiked to a 40-year-high the prior year swallowed up household income gains.

Inflation-adjusted median household income was $80,610 in 2023, up 4% from the 2022 estimate of $77,540, the bureau said in its annual report card on households’ financial well-being. This move returned incomes to about where they were in 2019, the peak that was hit just before the pandemic.”

From Wall Street Journal.

Wall Street Journal | Wealth & Poverty

The Dramatic Turnaround in Millennials’ Finances

“The median household net worth of older millennials, born in the 1980s, rose to $130,000 in 2022 from $60,000 in 2019, according to inflation-adjusted data from the Federal Reserve Bank of St. Louis. Median wealth more than quadrupled to $41,000 for Americans born in the 1990s, which includes the generation’s youngest members, born in 1996. 

The turnaround has been so dramatic that millennials—mocked at times for being perpetually behind in building wealth, buying homes, getting married and having children—now find themselves ahead.

In early 2024, millennials and older members of Gen Z had, on average and adjusting for inflation, about 25% more wealth than Gen Xers and baby boomers did at a similar age, according to a St. Louis Fed analysis.”

From Wall Street Journal.

Blog Post | Energy & Natural Resources

The Simon Abundance Index 2024

The Earth was 509.4 percent more abundant in 2023 than it was in 1980.

The Simon Abundance Index (SAI) quantifies and measures the relationship between resources and population. The SAI converts the relative abundance of 50 basic commodities and the global population into a single value. The index started in 1980 with a base value of 100. In 2023, the SAI stood at 609.4, indicating that resources have become 509.4 percent more abundant over the past 43 years. All 50 commodities were more abundant in 2023 than in 1980.

Figure 1: The Simon Abundance Index: 1980–2023 (1980 = 100)

Graph highlighting the increase in the SAI over time, as resources have become 509.4 percent more abundant.

The SAI is based on the ideas of University of Maryland economist and Cato Institute senior fellow Julian Simon, who pioneered research on and analysis of the relationship between population growth and resource abundance. If resources are finite, Simon’s opponents argued, then an increase in population should lead to higher prices and scarcity. Yet Simon discovered through exhaustive research over many years that the opposite was true. As the global population increased, virtually all resources became more abundant. How is that possible?

Simon recognized that raw materials without the knowledge of how to use them have no economic value. It is knowledge that transforms raw materials into resources, and new knowledge is potentially limitless. Simon also understood that it is only human beings who discover and create knowledge. Therefore, resources can grow infinitely and indefinitely. In fact, human beings are the ultimate resource.

Visualizing the Change

Resource abundance can be measured at both the personal level and the population level. We can use a pizza analogy to understand how that works. Personal-level abundance measures the size of an individual pizza slice. Population-level abundance measures the size of the entire pizza pie. The pizza pie can get larger in two ways: the slices can get larger, or the number of slices can increase. Both can happen at the same time.

Growth in resource abundance can be illustrated by comparing two box charts. Create the first chart, representing the population on the horizontal axis and personal resource abundance on the vertical axis. Draw a yellow square to represent the start year of 1980. Index both population and personal resource abundance to a value of one. Then draw a second chart for the end year of 2023. Use blue to distinguish this second chart. Scale it horizontally for the growth in population and vertically for the growth in personal resource abundance from 1980. Finally, overlay the yellow start-year chart on the blue end-year chart to see the difference in resource abundance between 1980 and 2023.

Figure 2: Visualization of the Relationship between Global Population Growth and Personal Resource Abundance of the 50 Basic Commodities (1980–2023)

The figure shows a growth in the population and population level-resource abundance since 1980.

Between 1980 and 2023, the average time price of the 50 basic commodities fell by 70.4 percent. For the time required to earn the money to buy one unit of this commodity basket in 1980, you would get 3.38 units in 2023. Consequently, the height of the vertical personal resource abundance axis in the blue box has risen to 3.38. Moreover, during this 43-year period, the world’s population grew by 3.6 billion, from 4.4 billion to over 8 billion, indicating an 80.2 percent increase. As such, the width of the blue box on the horizontal axis has expanded to 1.802. The size of the blue box, therefore, has grown to 3.38 by 1.802, or 6.094 (see the middle box in Figure 2).

As the box on the right shows, personal resource abundance grew by 238 percent; the population grew by 80.2 percent. The yellow start box has a size of 1.0, while the blue end box has a size of 6.094. That represents a 509.4 percent increase in population-level resource abundance. Population-level resource abundance grew at a compound annual rate of 4.3 percent over this 43-year period. Also note that every 1-percentage-point increase in population corresponded to a 6.35-percentage-point increase in population-level resource abundance (509.4 ÷ 80.2 = 6.35).

Individual Commodity Changes: 1980–2023

As noted, the average time price of the 50 basic commodities fell by 70.4 percent between 1980 and 2023. As such, the 50 commodities became 238.1 percent more abundant (on average). Lamb grew most abundant (675.1 percent), while the abundance of coal grew the least (30.7 percent).

Figure 3: Individual Commodities, Percentage Change in Time Price and Percentage Change in Abundance: 1980–2023

Graph of the 50 basic commodities and there percentage change in time price vs abundance, where abundance has increased significantly as time price falls.

Individual Commodity Changes: 2022–2023

The SAI increased from a value of 520.1 in 2022 to 609.4 in 2023, indicating a 17.1 percent increase. Over those 12 months, 37 of the 50 commodities in the data set increased in abundance, while 13 decreased in abundance. Abundance ranged from a 220.8 percent increase for natural gas in Europe to a 38.9 percent decrease for oranges.

Figure 4: Individual Commodities, Percentage Change in Abundance: 2022–2023

Graph of the percentage change in abundance of the 50 commodities.

Conclusion

After a sharp downturn between 2021 and 2022, which was caused by the COVID-19 pandemic, government lockdowns and accompanying monetary expansion, and the Russian invasion of Ukraine, the SAI is making a strong recovery. As noted, since 1980 resource abundance has been increasing at a much faster rate than population. We call that relationship superabundance. We explore this topic in our book Superabundance: The Story of Population Growth, Innovation, and Human Flourishing on an Infinitely Bountiful Planet.

Appendix A: Alternative Figure 1 with a Regression Line, Equation, R-Square, and Population

Graph showing that even with population growth, the resource abundance shown by SAI has increased significantly.

Appendix B: The Basic 50 Commodities Analysis: 1980–2023

The figure shows the nominal price, time price, and resource abundance for various commodities from 1980 to 2023.

Appendix C: Why Time Is Better Than Money for Measuring Resource Abundance

To better understand changes in our standard of living, we must move from thinking in quantities to thinking in prices. While the quantities of a resource are important, economists think in prices. This is because prices contain more information than quantities. Prices indicate if a product is becoming more or less abundant.

But prices can be distorted by inflation. Economists attempt to adjust for inflation by converting a current or nominal price into a real or constant price. This process can be subjective and contentious, however. To overcome such problems, we use time prices. What is most important to consider is how much time it takes to earn the money to buy a product. A time price is simply the nominal money price divided by the nominal hourly income. Money prices are expressed in dollars and cents, while time prices are expressed in hours and minutes. There are six reasons time is a better way than money to measure prices.

First, time prices contain more information than money prices do. Since innovation lowers prices and increases wages, time prices more fully capture the benefits of valuable new knowledge and the growth in human capital. To just look at prices without also looking at wages tells only half the story. Time prices make it easier to see the whole picture.

Second, time prices transcend the complications associated with converting nominal prices to real prices. Time prices avoid subjective and disputed adjustments such as the Consumer Price Index (CPI), the GDP Deflator or Implicit Price Deflator (IPD), the Personal Consumption Expenditures price index (PCE), and the Purchasing Power Parity (PPP). Time prices use the nominal price and the nominal hourly income at each point in time, so inflation adjustments are not necessary.

Third, time prices can be calculated on any product with any currency at any time and in any place. This means you can compare the time price of bread in France in 1850 to the time price of bread in New York in 2023. Analysts are also free to select from a variety of hourly income rates to use as the denominator when calculating time prices.

Fourth, time is an objective and universal constant. As the American economist George Gilder has noted, the International System of Units (SI) has established seven key metrics, of which six are bounded in one way or another by the passage of time. As the only irreversible element in the universe, with directionality imparted by thermodynamic entropy, time is the ultimate frame of reference for almost all measured values.

Fifth, time cannot be inflated or counterfeited. It is both fixed and continuous.

Sixth, we have perfect equality of time with exactly 24 hours in a day. As such, we should be comparing time inequality, not income inequality. When we measure differences in time inequality instead of income inequality, we get an even more positive view of the global standards of living.

These six reasons make using time prices superior to using money prices for measuring resource abundance. Time prices are elegant, intuitive, and simple. They are the true prices we pay for the things we buy.

The World Bank and the International Monetary Fund (IMF) track and report nominal prices on a wide variety of basic commodities. Analysts can use any hourly wage rate series as the denominator to calculate the time price. For the SAI, we created a proxy for global hourly income by using data from the World Bank and the Conference Board to calculate nominal GDP per hour worked.

With this data, we calculated the time prices for all 50 of the basic commodities for each year and then compared the change in time prices over time. If time prices are decreasing, personal resource abundance is increasing. For example, if a resource’s time price decreases by 50 percent, then for the same amount of time you get twice as much, or 100 percent more. The abundance of that resource has doubled. Or, to use the pizza analogy, an individual slice is twice as large. If the population increases by 25 percent over the same period, there will be 25 percent more slices. The pizza pie will thus be 150 percent larger [(2.0 x 1.25) – 1].

Board of Governors of the Federal Reserve System | Economic Growth

Income Growth Over Five Generations of Americans

“We find that each of the past four generations of Americans was better off than the previous one, using a post-tax, post-transfer income measure constructed annually from 1963-2022 based on the Current Population Survey Annual Social and Economic Supplement.”

From Board of Governors of the Federal Reserve System.