Rethinking Productivity Growth
According to conventional measurements, the world’s population is about 20 times richer than it was during the long Agrarian Age. But conventional measurements underestimate economic progress, because consumer choices now extend far beyond the goods and services that were broadly available back then.
BERKELEY – Today, the world’s population is, on average, about 20 times richer than it was during the long Agrarian Age. Between 7000 BC and AD 1500, resources were scarce, technological progress was slow, and Malthusian pressures kept almost all human populations at a near-subsistence level, with per capita daily income of less than $1.50 in today’s terms.
In 2017, only around 7% of the world’s population is that poor. Consider a scenario in which we took the total monetary value of what we currently produce, and used it to purchase the types of goods and services that people living on $1.50 per day consume. The average daily global-output value would be $30 per person (at current prices).
That is our roughly $80 trillion of annual global income today. And while the fruits of global productivity are not equally distributed by any stretch, our society’s overall wealth today would leave our Agrarian Age predecessors dumbstruck.