Historical data, such as that presented in visualizations like Figure 1.1, indicates that during the fourteenth century, Italy's average living standards surpassed those of any other country for which comparable data from that era is available. This observation, which can be exemplified by comparing Italy to nations like Britain, India, and Japan of the same period, underscores Italy's prominent economic standing at the time.

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- Comparing pre-1800 data points in Britain, Japan, Italy, China, and India
- Comparing Britain, Japan, Italy, China, and India
- Britain
- Japan
- India and China
- China and Japan

Examples Using GDP to Calculate National Economic Growth 1000-2000CE

Figure 1.1a illustrates GDP per capita, a metric for average annual income, used to compare living standards across various nations. In this figure, the height of each line represents an estimate of average living standards at the specific date indicated on the horizontal axis. Gross Domestic Product (GDP) signifies the total value of goods and services produced within a specific timeframe. The graph highlights significant wealth disparities. By 2018, for instance, the average person in Japan was six times wealthier than their counterpart in India. Japanese wealth in 2018 was comparable to that in Britain, a similarity also observed in the fourteenth century. Furthermore, Americans were wealthier than the Japanese, and Norwegians held the highest average wealth among the groups depicted. The data for this graph, spanning over a millennium, is primarily sourced from the extensive work of Angus Maddison, who devoted his career to uncovering the limited historical data necessary for meaningful comparisons of living standards across more than a thousand years. His efforts, continued by the Maddison Project, along with contributions from Stephen Broadberry and other researchers, form the basis of these estimates. This comprehensive data, including that for Figure 1.1, also draws on the studies of numerous statisticians, historians, computer scientists, and economists. It's highlighted in a related note that this historical data undergoes continuous improvement, and the optimal data for Figure 1.1 now encompasses six countries. Furthermore, an interactive chart provides an alternative data source for a more extensive list of countries. While income disparities were minimal a thousand years ago, they are now substantial globally.

History’s Hockey Stick: GDP Per Capita in Five Countries (1000–2018) and Data Sources

The Moroccan scholar Ibn Battuta, traveling extensively in the fourteenth century, described the Bengal region of the Indian subcontinent as exceptionally abundant in provisions. Three centuries later, French merchant Jean Baptiste Tavernier noted similar richness in Bengal. Despite such accounts of abundance, a fourteenth-century observer would have noted that while some regions like Italy, China, and England were generally more prosperous than places such as India or Japan, the vast disparities in wealth within any given country were considerably more pronounced than the economic differences observed between various regions. In this era, the wealthy and impoverished were often distinguished by social titles like feudal lords and serfs, royalty and subjects, enslavers and enslaved individuals, or merchants and the sailors they employed. Then, much like today, an individual's economic prospects were heavily influenced by their parents' societal standing and their gender. Transitioning to the present, contemporary Indians, while having achieved notable advancements over the past seven centuries in areas like diet, sanitation, and disease control—which have contributed to increased life expectancy—still largely face poverty by current global benchmarks.

Historic Economic Observations: Ibn Battuta and Jean Baptiste Tavernier on Wealth, Poverty, and Social Structure

To cite the ebook, use The CORE Econ Team 2023 The Economy 2.0: Microeconomics Open access e-text https://core-econ.org/the-economy/.

To cite a unit, use The CORE Econ Team 2023 The Economy 2.0: Microeconomics Open access e-text https://core-econ.org/the-economy/ Unit [unit number] (url).

CORE Econ - The Economy 2.0: Microeconomics

Significant improvements in living standards in certain economies, notably including China and India, were often not realized until after they achieved independence from colonial rule or external European interference.

Living Standards Improvements Post-Colonial Independence

For each country the data points shown at the previous step have been joined with straight lines. Before 1800 we can’t see how living standards fluctuated from year to year.

Living Standards Visualization: Pre-1800 Limitations

A compelling video created by statistician Hans Rosling visually demonstrates the historical progression of economic prosperity and health improvements across various nations, highlighting how some countries achieved significant advancements much earlier than others.

Hans Rosling's Video on Disparate Global Economic and Health Development

The significant economic acceleration, or 'kink' in the hockey stick pattern, for China and India occurred much later than in Western Europe, specifically in the latter half of the twentieth century.

Late Economic Takeoff in China and India

During the period when Western European countries began experiencing significant economic growth, living standards in China and India, contrary to the global trend, saw a decline.

Decline of Living Standards in China and India During Western European Economic Takeoff

Since the historical period of Ibn Battuta, there has been a substantial overall improvement in living standards globally. This progress, however, has been markedly inconsistent, with different nations experiencing vastly different degrees of advancement.

Dramatic and Uneven Rise in Global Living Standards Since Ibn Battuta's Era

GDP per capita is a measure of a country's economic output per person. It is calculated by dividing the total GDP of a country by its population. This measure is often used to compare living standards across countries, as it takes into account both the size of a country's economy and the size of its population. A high GDP per capita generally indicates a higher standard of living, as individuals have access to more goods and services on average. However, it is important to note that GDP per capita is not a perfect measure of a country's living standards, as it does not account for factors such as income inequality or differences in the cost of living.

GDP Per Capita

This node represents Figure 1.1, a graph titled 'History’s Hockey Stick,' which illustrates gross domestic product per capita from 1000 to 2018. Acknowledging ongoing data refinements, an accompanying note clarifies that the best available historical data for Figure 1.1 now covers six countries. The associated image provides a visual representation of this data, offering a key example of the 'hockey stick' growth pattern in economic history. Additionally, for broader comparisons, an interactive chart is available as an alternative data source for many more countries.

History’s Hockey Stick Graph (Figure 1.1)

During the fourteenth century, contemporaneous with Ibn Battuta's extensive travels and his visit to Bengal, Europe was severely impacted by the bubonic plague. This epidemic resulted in the deaths of a quarter or more of the population in many European cities.

Demographic Impact of the Bubonic Plague in 14th Century Europe

In eras like Ibn Battuta's, understanding global conditions relied heavily on the reports of explorers. An accompanying illustration, relevant to this theme, depicts a figure, likely a historical explorer, situated in a desert environment. This individual is characterized by a beard, traditional Middle Eastern or North African attire including a turban and a long robe, and a confident posture with one hand on their waist. The backdrop includes ancient ruins and sculptures that evoke a historic civilization. This visual representation is designed to capture the spirit of historical exploration and the adventurous pursuit of global knowledge.

Historical Global Knowledge Acquisition

Economist Angus Deaton, an expert in poverty analysis, suggests that upon the conclusion of 300 years of British rule in 1947, the childhood deprivation experienced by Indians might have been among the most severe in history. In the final years of British governance, a child born in India had a life expectancy of 27 years. Half a century later, this figure increased to 65 years, largely due to improvements in access to better diets, sanitation, and control of infectious diseases. Despite these advancements, by current global standards, most Indians are still considered poor.

Post-Colonial India Progress

The substantial increase in living standards seen in the countries was not experienced under Spanish colonial rule or during the post-independence period of most Latin American nations in the early 19th century.

Latin American Growth

China was once wealthier than Britain, but by the mid-20th century, its GDP per capita had fallen to just one-fourteenth of Britain's.

China's Economic Decline

In his 1676 work, 'Travels in India,' Jean Baptiste Tavernier documented the remarkable abundance of various foodstuffs available even in the smallest villages of India. He noted that items such as rice, flour, butter, milk, beans, other vegetables, sugar, and sweetmeats (both dry and liquid) could be easily procured.

Jean Baptiste Tavernier's Observation of Abundant Foodstuffs in 17th Century Indian Villages

Ibn Battuta's 14th-century observations, made during extensive travels that included Bengal while Europe was concurrently experiencing the devastating bubonic plague, suggested a world with relatively modest income variations between countries. His perspective indicated that India, for instance, was neither significantly richer nor considerably poorer than other global regions at the time. This contributed to the understanding of a relatively 'flat' global economy in that era. A key aspect of this economic 'flatness' was that, compared to the present day, the part of the world in which an individual was born played a much less decisive role in their economic prospects. Economically speaking, the world was considered flat in Ibn Battuta’s day.

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