Are the Poor Better Off Than King Louis XIV?
Comparing the well-being of the poor today and royalty from centuries ago is irrelevant.
Bloomberg, January 16, 2015, 11:24 AM EST
“Wealth – any income that is at least one hundred dollars more a year than the income of one’s wife’s sister’s husband.”
–H.L. Mencken
On Fridays, I like to wax eloquent and philosophical — about investing, analysis and asset management. Often, there are lessons from other disciplines that are applicable to our own. Sometimes I point out an especially insightful work. But most of the time, I like to highlight misguided, faulty or just plain dumb analysis.
The latter is our subject today: a dishonest and disingenuous argument that is technically correct, but cynical and misleading. It only takes a bit of thinking to realize the absurdity of the claim.
Writing in the Washington Times during last month’s holiday week was this column from Richard Rahn of Cato Institute with the headline, “Common folk live better now than royalty did in earlier times. ”
The entire enterprise is a fatuous and politically inspired attempt to minimize the issue of income inequality, because after all, the poor today live better than kings did centuries ago! There, all problems solved. Here’s Rahn:
“The average low-income American, who makes $25,000 per year, lives in a home that has air conditioning, a color TV and a dishwasher, owns an automobile, and eats more calories than he should from an immense variety of food . . . Louis XIV lived in constant fear of dying from smallpox and many other diseases that are now cured quickly by antibiotics. His palace at Versailles had 700 rooms but no bathrooms (hence he rarely bathed), and no central heating or air conditioning.”
Let’s set about fisking this intellectual detritus:
Progress Is Humanity’s Default Setting: Ever since our ancestors climbed down from trees and began walking upright across the savannah, the human animal has constantly struggled. The gracile humans bested their more-robust cousins thanks to greater intelligence, social cooperation and adaptability to a changing environment.
The net result of this has been a million years or so of progress. Community, development of language, agriculture, technology, the rule of law, a market-based economy, and much more is the result of this never-ending cycle.
It seems to be humanity’s nature to relentlessly seek ways to improve living standards, generation after generation. Consider the gains made during the past 500 years, especially since the Industrial Revolution, and the insane rate of progress during the past decade. The delta of progress is rapidly accelerating.
Of course we are much better off than people who lived centuries ago. But the leap in living standards is nonlinear — meaning it is likely to happen much faster in the future.
All Temporal Arguments Are Two-Sided: Looking at the issue of whether today’s poor are “wealthier” than long-dead royalty is only half of the timeline. The other half is to think about what the poor will enjoy a few centuries from now that even the 0.01 percent lack today.
I doubt the lowest economic strata will be laughing to themselves about the hardships of the wealthiest people today. “Imagine, they died of cancer and heart disease, had to birth their own babies, and even drove their own cars. How primitive can you get!”
No, not really.
That is why none of the poor think to themselves: “Huzzah! I am wealthier than French King Louis XIV!” Nor do any lament, “Alas! I am enjoying less technological advantages than even the poorest schlump to be born in the year 2415. . . woe is me.”
Comparing yourself to kings who lived four centuries ago — or to paupers to be born four centuries from now — is irrelevant.
Wealth Is Relative: Mencken’s quote at the start of this article points out the simple reality of wealth — it is relative to one’s peers. The silliness of the historical argument is that it reflects a fundamental misunderstanding of how people envision their own financial well-being.
Wealth is, and always will be, a relative concept.
That is why Menken, only partially tongue-in-cheek, defines wealth as having $100 more than your brother-in-law. We try to keep up with the Jones because they are our contemporary geographic and social peers.
Bad Ideas, Bad People and Bad Organizations Are What Disrupt Human Progress: One last statement of Rahn’s demands some elucidation:
“The only thing that will stop human progress is bad government.”
There are many things that have disrupted human progress over the eons, and they tend to fall into one of those three categories. Let me remind you of the Dark Ages, the centuries of intellectual and economic regression that came after the collapse of the Roman Empire. It was the Church that wouldn’t allow knowledge to be disseminated, fought scientific inquiry and limited literacy. More recently, political regimes of both the right and the left have also interferred with human progress.
Today, one of the biggest impediments is simple ignorance and slavish devotion to ideologies. Whether it’s irresponsible opponents of childhood vaccination or the global-warming denialists, the single most threatening force to human progress is relentless stupidity.
Unfortunately, that is the one thing that progress hasn’t overcome.
Originally: Are the Poor Better Off Than King Louis XIV?
I agree with the estimable CATO Institute who have been spot on in everything they’ve predicted about the disasterous Obama policies, including how tax cuts for the rich would ruin our economy and way of life…
And in this case. The top one percent are much, much better off too as their heads haven’t been lopped off by the Occupy Movement as it happened in the French Revolution.
So everybody wins in this Bush/Cheney/Boehner/McConnell success story!
Richard Rahm logic fallacy: Red Herring
http://www.informationisbeautiful.net/visualizations/rhetological-fallacies/
From Wiki:
“The red herring falls into a broad class of relevance fallacies.
Unlike the strawman, which is premised on a distortion of the other party’s position, the red herring is a seemingly plausible, though ultimately irrelevant, diversionary tactic.”
I would agree that comparing the living standards of the poor today to the living standards of royalty in earlier times is irrelevant.
The fact that a person can survive does not mean that (s)he has gotten a fair share of the pie.
Only if you get an equally large share of the pie as those who worked equally hard – have you gotten a fair share of the pie
Can’t fix stupid.
Forget royals who are a little pase’.
Compare the average, mean, or poorest people today with their equivalents 100-2000 years ago, and i’m sure the Institute is correct.
Oddly, the benefits accruing to contemporary populace is largely the result of inventors, engineers, entrepreneurs who have created the added value.
Air conditioning, cable television, accessible food (food stamps!!!!) , cell phones, automobiles and other transportation. The list goes on.
I disagree with both you and Richard Rahn.
Yes, comparing across totally different times is suspect and the way we feel wealth is completely relative to our contemporaries. [Editor: Then you are agreeing with BR]
However, this analysis does not take into account to huge personal power that Louis XIV had. People waited on him hand and foot and their very lives were very much at his mercy; he was considered a representative of God on Earth. He proclaimed, “I am the State”. The economic valuation of his lack of plumbing or air conditioning or medicine completely ignores his incredible personal power. His court contained thousands of people who would literally do just about anything to appease his whims. That seems like a pretty big deal to just gloss over. [Editor: Again, more agreement]
Outside places like the PRNK, most people command far more personal power than they did 300 years ago and I suspect that they will have even more 300 years from now. What is the value of that? It’s worth more than money; it’s worth blood.
Second, I think you have your own unexamined devotion to an ideology. Yes, the experience of wealth is relative, but you speak of it as if it is moral. Why is inequality in itself wrong? Abuse is wrong, injustice is wrong, and these come hand in hand with inequality often, but I fail to see why it is inherently bad that some people have far better circumstances than others. [Editor: Now you are just making shit up]
Finally, many of the breakthroughs that led to the Renaissance and industrial revolution started in the so-called Dark Ages from algebra and astronomy to the basis of our current legal systems and the concept of measuring time. In Europe, most of the oldest (non-Roman) roads and churches date to the 13th century when the Muslims were pushed out of Europe. [Editor: why ignore the Roman roads?] It was an interesting time economically, the black death made unskilled labor suddenly far more valuable than it has been in most of human history and spawned efficiencies in agriculture that made famine less frequent in Europe, which in turn drove urbanization and the Renaissance. [Editor: Algebra is Arabic in origin — originally “al-jebr” founded by Near East mathematicians as Omar Khayyam (1048-1131)]
I agree that progress is not a constant that we can just rely on, but lots of ideas that define our day-to-day lives right now were conceived during the middle ages. [Editor: You have not really proven this]
Thank you for not censoring me!
In response to your edits, yes, I do mostly agree with BR.
The place I disagree is the section where you say I am ‘just making shit up’. I am asking a question: Is inequality in itself the problem?
A story going around today is that the 1% wealthiest in the world will control over 50% of the assets by next year. This blog (and media in general) often talk about inequality as if it is ‘evil’ or ‘wrong’ in connotation, but I think this framing is detrimental to human progress.
The real problem, the central problem of economics, is what resource-holders do with their resources. If the 1% did things that benefit the other 99%, one can imagine a world where power and liberty were widely available despite most assets being in control of a smallish set of wonky technocrats. A fundamental problem in the world today is that the wealthy waste their resources and pursue strategies that leave everyone worse off, often including themselves. Constantly attacking inequality protects these deeper structural issues by derailing more nuanced approaches.
I understand that the ‘Us vs Them’ set up offered by inequality plays very well in most places, because it makes a clear distinction. I just hope that the thinkers who read intelligent pieces like this realize that inequality in wealth is something of a red herring in terms of the problems humanity faces today. It is a generalization of a number of real problems that would be better addressed head on like classism, nepotism, racism, and sexism for starters.
The Dark Ages stuff is just an annoyance of mine and I don’t want to spend more time on it, since it distracts from my main point. It’s the go to ‘anti-progress’ period in most educated Western minds, but that period shaped our current Western institutions even more than the Classical period and humanity is not Europe.
So no one addressed the disparity in hours of bone numbing work that a poor person must endure or even a two earner middle class family in order to secure the luxury of Louis XIV compared to the toil the king endured for the same.
‘We all start out ignorant, it takes “effort” to remain that stupid.’ Paraphrasing Ben Franklin.
Among the worst humbug factories expending a lot of “effort”; printed in the bleakest agitprop rag.
In that air coditioned hovel is most likley food insecurity, no access to health, no educational future, and the best chance to be Horatio Alger is through a buying a megamillions ticket.
If the hovel has a degreed techie, the job creators are using humbug factory wirters to make up job descriptions that can only be filled by an H1B at twice the salary.
Thank you for weeding out most of the blither!