The United Nations has just released a new report on international development, titled “Development for Everyone”. It focuses on equality, distinguishing between absolute inequality and relative inequality. It points out that in terms of the Gini coefficient, a statistical measure used to gauge a country’s income inequality, one kind of inequality is rising while the other is falling:
“Rising incomes around the world have been accompanied by widening inequality … Although income inequality … has narrowed across the world as a whole because the incomes of developing and developed regions have been converging. Relative global inequality has declined steadily over the past few decades … This happened despite an increasing trend towards inequality within countries.
By contrast, absolute inequality, measured by the absolute Gini coefficient, has increased dramatically. [For example, in] 2000 one person in a country earns $1 a day and another person $10 a day. With economic growth, in 2016 the first person earns $8 a day, and the second person $80 a day. The relative difference between the two remains the same (the second person has 10 times more than the first person), but the absolute difference has gone up from $7 to $72.”
(Source: United Nations, 2016 Human Development Report: Development for Everyone)
Even though the difference between absolute and relative inequality is increasing, the key thing to take away is that the tremendous growth in developing countries has decreased relative inequality between states and diminished poverty. And, arguably, reducing deprivation and raising living standards are more important than lessening income inequality.
So why the focus on money? In many other vital areas inequality is declining across the globe. Here are five charts which pin-point where.
Life expectancy is one of the best measures of the overall standard of living. Even for Africa, the poorest continent, the life expectancy gap with North America has narrowed. North American life expectancies were about 29 years longer than Africans’ in 1960, but only 18 years longer in 2015. This progress occurred despite the catastrophic AIDS epidemic that slowed Africa’s life expectancy significantly. Asia and South America have gone even farther towards closing the life expectancy gap with North America, narrowing it to roughly 6 and 5 years, respectively.
Life expectancy gains are partly due to falling rates of infant mortality—another area in which poor countries are catching up with rich ones. In 1960, 144 out of 1,000 African children died before their first birthday, compared to 26 out of 1,000 North American children. In other words, 118 more African children than North American children died as infants out of every 1,000. By 2015, that number had shrunk to 43.
Better nourishment is also to thank for longer lives. In 1991, close to 30 per cent of Africa’s population was undernourished, compared with “5 per cent or less” of North America’s population. By 2015, fewer than 20 per cent of Africans were undernourished. The absolute inequality between the poorer areas of the globe and the richer ones shrank considerably, even as undernourishment became rarer worldwide.
The education gap between rich and poor countries has diminished as well. In 1950, Americans spent nearly seven more years learning than Chinese students on average, and nearly eight more years leaning than Indians. By 2015, average years of schooling in the United States exceeded the Chinese average by only five years and the Indian average by about six years.
Internet use tells a similar story. China, in particular, has rapidly narrowed the gap. In 2000, a little under 2 per cent of Chinese used the internet, compared to 43 per cent of Americans. That means a gap of 41 per cent. By 2015, that gap had shrunk to 24 per cent.
As these charts show, poor countries are actually making faster progress than rich ones in many areas. In some cases, this is simply because richer countries have “reached the finish line” it’s impractical to school children past a certain number of years, for example, or levels of malnutrition might already be at zero.
In other cases, the rapid adoption of technologies and growth-friendly policies from a standing start is giving poorer countries a boost that enables them to progress at breakneck speed. Even bearing this in mind, why do some places develop more quickly than others? What explains the incredible pace of change in China, for example? The UN report nails it with this sentence:
In China and India, opening up the economy to the world accelerated growth, which in turn helped address human development challenges — reducing poverty, improving health outcomes and extending access to basic social services.
So rather than rush to complain about the increase in absolute inequality, we should stop and consider how globalisation and free exchange, though unpopular among those who think they only benefit the rich, are to thank for shrinking relative inequality and plummeting poverty across the world.
The Earth was 509.4 percent more abundant in 2023 than it was in 1980.
Marian L. Tupy, Gale Pooley —
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)
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)
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
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
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 bookSuperabundance: 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
Appendix B: The Basic 50 Commodities Analysis: 1980–2023
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].
“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.”
“57% of [US] workers are making more money now — after adjusting for inflation — than they were a year ago. 41% of us have seen a real wage increase of more than 5%.”
1,000 Bits of Good News You May Have Missed in 2023
A necessary balance to the torrent of negativity.
Malcolm Cochran —
Reading the news can leave you depressed and misinformed. It’s partisan, shallow, and, above all, hopelessly negative. As Steven Pinker from Harvard University quipped, “The news is a nonrandom sample of the worst events happening on the planet on a given day.”
So, why does Human Progress feature so many news items? And why did I compile them in this giant list? Here are a few reasons:
Statistics are vital to a proper understanding of the world, but many find anecdotes more compelling.
Many people acknowledge humanity’s progress compared to the past but remain unreasonably pessimistic about the present—not to mention the future. Positive news can help improve their state of mind.
We have agency to make the world better. It is appropriate to recognize and be grateful for those who do.
Below is a nonrandom sample (n = ~1000) of positive news we collected this year, separated by topic area. Please scroll, skim, and click. Or—to be even more enlightened—read this blog post and then look through our collection of long-term trends and datasets.
