David R. Henderson  

The Top 1 Percent Includes You

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But if you take a wider and longer view, you reach a striking conclusion: virtually every American who has heard John Kerry or Al Gore speeches is in the top one percent. This includes the middle-class family from Indiana, the barber in Florida, the K-mart clerk in Oregon, and the Virginia junkyard worker.

Here's why. Carl Haub, senior demographer at the Population Reference Bureau in Washington, D.C., has estimated that 106 billion humans have been born since Homo sapiens appeared about 50,000 years ago. That means that the richest one percent in history includes 1.06 billion people. There are currently 6.2 billion humans alive, leaving approximately 100 billion who have died. Who among the dead was rich by today's standards? Not many. Royalty, popes, presidents, dictators, large landholders, and the occasional wealthy industrialist, such as Andrew Carnegie and Leland Stanford, were certainly rich. All told, it is difficult to imagine more than 20 million of these people since ancient Egyptian times. This leaves 1.04 billion wealthy alive today, or 17% of the world's population.


This is from David R. Henderson and Charles L. Hooper, "The Top One Percent Includes You," TCS Daily, May 20, 2004.

We go on to say:

The poor in the United States, by contrast, live on up to $23.50 a day. Except for the few hundred thousand who are homeless, the Americans whom the U.S. government defines as poor live exceptionally rich lives. In most ways, their lives are better than those of kings and queens just 200 years ago. Consider the quality and quantity of our food, clothing, refrigerators, televisions, washing machines, stereo systems, and automobiles. King Louis XIV of France had a greenhouse so he could eat oranges. The poor in this country can eat an orange every day, regardless of season. King Edward III of England could summon the royal musicians to play music. The poor in this country have a wide variety of music at their command, 24 hours a day, played note-perfect every time. Edward III lived in a dark, smelly, cold castle. Even the worst houses in this country are more comfortable and have electric lights, too. Care to live without showers and flush toilets? The kings of England and France had to. Next time you see a Shakespeare play in which kings and princes cavort, remember that royalty in Shakespeare's day had rotten teeth, terrible breath, and body odor that would make you keel over.


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COMMENTS (28 to date)
Matt writes:

This shifting of the argument is objectionable on broader grounds, but I can't resist picking one sort of obvious factual nit: only 20 million dead people had living standards comparable to the top 17% of humanity today?

We can include, I don't know, Louis XIV and Caligula in that list. But we can also reasonably include Steve Jobs. Something like 2.5 million Americans die per year. If you make the crude but reasonable assumption that at least 80% of Americans who have died since 2000 had living standards comparable to the bottom of the top 17% of currently living humans, then that fills up your 20 million right there, with no room for Caligula or Tutankhamen or any dead 21st century Europeans or Canadians or Japanese.

The basic point is probably correct, although also sort of insane and irrelevant, but "top 1%" is pushing it.

Chris writes:

But I'm so poor compared to next century's middle class!

David R. Henderson writes:

@Chris,
I think--and hope--that you’re right.

Adam writes:

If only my brain were properly grateful for its easy living. Stupid hedonic baseline.

David R. Henderson writes:

@Adam,
I’m pretty sure you’re making fun of me, but I’ll make a serious point: I think you can work on your brain and start practicing gratitude. I think you’l be amazed at how much joy you can get from appreciating simple things like flush toilets, unspoiled meat, and antibiotics.

Tom Crispin writes:

I had an R&R in Da Nang in 1968 and spent more than a few minutes appreciating the flush toilets.

Tracy W writes:

The advantage of going hiking - you get all the pleasure of some amazing views, and all the pleasure of encountering luxuries again. I remember once on the 4th afternoon coming to the hut we were staying that night, and it had a sink! No running water, but still it was an actual sink! What luxury to be able to wash up the dishes without having to do it in the billy you just cooked dinner in!
And then two days later I was back in the world of hot showers and flush loos.

Frank in midtown writes:

Are you really sure that this argument doesn't make the folks in the top 1% look even worse? I appreciate your point about the progress of human effort, but in this time of incredible luxury doesn't the need to capture the lion share make the top 1% look even greedier?

Eric Morey writes:

"I think you can work on your brain and start practicing gratitude."

Is it possible for a professional athlete to be grateful for their job and resentful of those getting paid more (or even making league minimum) because of cheating (use of HGH or other band substances). Should one be resentful of a league (system) that implicitly promotes such cheating? Or should one simply recognize that athletes in the past never enjoyed so much luxury and keep quiet about any perceived inequities or injustice?

vlad writes:

There are currently 6.8 billion people.
(Not that this changes your conclusions.)

Dain writes:

The argument in brief: It could be worse.

Duh.

N. writes:

Yeah... I don't think I've ever won any hearts or minds by employing this argument (with which I am in complete agreement). My experience is that the vast majority for whom the notion of inequality is a problem are sublimely disinterested in how things were; they are only interested in how things are, which is, in a word, unequal.

Also, the way I choose to answer Eric Morey's question above is this: there is always incentive to cheat, and often cheaters do prosper. By cheating, however, they take on themselves risks that I, myself, am not comfortable with (in baseball I think what is at risk is particularly steep: health, status, relationships, possible prosecution, etc.).

If it is truly the case that one cannot participate in pro baseball without doping, despite doping being illegal, that may simply be the market telling you to find something else to do besides pro baseball. You are not, after all, entitled to a pro baseball job. Inasmuch as you can have one, and not need to dope, then yes, I do think that gratitude is the right emotion to feel.

Case in point: 11 years for Raj Rajaratnam.


Paavo Ojala writes:

"I think you can work on your brain and start practicing gratitude. I think you’l be amazed at how much joy you can get from appreciating simple things like flush toilets, unspoiled meat, and antibiotics."

But even in your post there is nothing about gratitude about absolute levels of well being, you're just comparing to some other group that has(had) it even worse.

It is still always comparing. It is always relative. Talking about some historical figures won't relieve the status anxiety and pain of poor people. Give them, instead, reality TV with people even worse of than they are. Or heroin. you'll be amazed how much joy you can get from just shortcutting through the difficult exercise of imagining how well of you are compared to this and that (for all intents and purposes of the poor people) imaginary french king, and just giving the brain the candy it craves.

Daublin writes:

In other words, don't pee in the punch bowl. I couldn't agree more.

Eric, in my world, athletes like you describe are habitually ridiculed. They make millions of dollars a year and then complain how they deserve more.


Eric Morey writes:

"yes, I do think that gratitude is the right emotion to feel."

Only Gratitude, singularly, at all times? People are more complex than that. It is understandable that many if not most people would feel both gratitude and resentment in varying proportions depending on the events of the day.

"Eric, in my world, athletes like you describe are habitually ridiculed. They make millions of dollars a year and then complain how they deserve more."

Reggie White was ridiculed (habitually even) for being outspoken about performance enhancing drugs?

Nox Ninox writes:

Shorter Henderson:

All you 21st century debt slaves should be thanking your lucky stars you're not building pyramids.

Cryptomys writes:

So what about the 999 plan? Will one of you please weigh in on the 999 plan?

Shayne Cook writes:

To Cryptomys:

The 9,9,9 Plan will rapidly become the 29,29,29 Plan in order to save us all from the latest "crisis", "Armageddon", "catastrophe", "nuclear meltdown", dah, dah, dah (pick your own superlative).

Dr. Henderson explains why in his original post.

Oliver writes:

Isn't it wrong to compare populations across different historical periods? Following the same logic, you could've been a speech writer for Marie Antoinette telling the 99%: "But you shouldn't compare yourselves with Marie here. You must compare how much better off you are relative to the people of medieval europe."

Adam writes:

@David:
I was just making fun of the brain in general, actually. The progress humanity has made is indeed great; so much so that it's a shame we can't always appreciate it as if it were new.

davboz l writes:

GOOD. I thought that was the flavor of Adam's earlier comment. That's how I took it.

Matthew C. writes:

So this is why the bottom 99% of Americans should't care that they are getting ripped off by the financial-government and credentio-government complexes and having their savings destroyed by money printing shouldn't complain?

Just wondering. . .

Josh writes:

The hedonic baseline comment is pretty insightful, because it touches on some of the tensions within economic growth and in a lot of ways capitalism itself. The fact that people want more, are unsatisfied with new things, seems to me to be the *primary* driver of competition and therefore economic growth, not a love of economic growth and progress per se.

That is to say that if people were as grateful as David suggests, if people did not compete within their own circles because they wanted to be better than the person right next door, then economic growth would not be as great as it is now. I'm not trying to make a straw-man, here; I'm simply pointing out that the desire for greater wealth and the inability to be satisfied with what one currently has is likely a very large part of economic competition (if not the majority). You can see evidence of this in societies with strong taboos against inequality or "flashiness"; they don't develop as fast as economies with large rewards for great wealth. You can also see it in the market for essentially useless luxury goods (like golden umbrella stands). There's a difficult tension, here.

David R. Henderson writes:

Matthew C. writes:
So this is why the bottom 99% of Americans should't care that they are getting ripped off by the financial-government and credentio-government complexes and having their savings destroyed by money printing shouldn't complain?
No, everyone who gets ripped off should complain. And the majority of the people in the top 1% are getting ripped off the most. As for savings getting destroyed by money printing, the evidence goes against you: the inflation rate is quite low.

Left Outside writes:

Hmm, not entirely convinced. Don't you think that maybe poverty required the use of a little local knowledge? Shameless link to self.

Matthew C. writes:

David,

The majority of the people in the top 1% are there because the system is rigged, many of them active participants in the rigging. What do you think the salary of a doctor would be in the absence of the medical licensing cartel and government-sponsored health insurance distortions? What do you think the salary of university professors would be in the absence of Federal student loans? What do you think the folks on Wall Street would do in the absence of Fed money printing funneled into their hands?

BTW There is no such thing as "inflation". There are many different inflations, depending on where exactly all the rivers of fiat money and credit printed up by the Fed end up. When it ends up chasing asset prices up we feel happy, call it a "bull market", and dance the happy jig (until the market crashes, of course). When it chases housing prices up we all feel the "wealth effect" and far to many go on a home equity withdrawal binge. When it goes overseas to a central bank we believe that they will endlessly accept our ponzi paper promises in exchange for valuable raw and manufactured goods. When it bids up oil and food prices, we see revolutions begin in Tahrir Square and Zucotti Park.

But the laughable statistic they call "inflation" (always designed to show the lowest number possible) is simply the lowest conceivable rate at which the government printing press is stealing from you. Right now, that is 4.6% y/y according to the government, which means that everyone is getting a negative real interest rate. I suppose that is low to some, but it is more than my salary increases (and many people have not gotten any salary increases, or even had their salary cut). I expect that is why they are marching and holding signs -- because they see Wall Street fraudsters who produced mortgage backed garbage and lied about the quality of what they were selling got bailed out and paid themselves record bonuses out of dubiously calculated profits. I think they are mad and sick and tired of this grotesque politico-financial crony system misleadingly called "capitalism".

Adrienne C. writes:

The comparison of the poor of today and the rich of yesterday doesn't illustrate the point properly. What you would have to look at would be the poor of today relative to the rich of today and the poor of yesterday relative to the rich of yesterday. The concept is the same now as it was then,the poor suffer worse conditions than the rich. It is true that the poor people of our time have a far better existence than the commoners in the middle ages but they do not have a better existence than the rich in our time. It is the desire of people to have better conditions and easier lives that has caused the advances we see today. If people were just content with the conditions in which they live societies and economies would become stagnant. I think it is important for people to see the way the 1% lives and the alternative so that they have some idea of what they can achieve if they strive for it.

cansell09 writes:

I agree with Adrienne, The comparison that the poor now have it better than the the kings and queens of 100's of years ago doesn't really illustrate the point. Although I would gladly except the lifestyle of a poor person today rather than a person as little as 50 years ago. But as we compare the rich and the poor today we do suffer worse conditions but its not as if these conditions are unbearable. We are just jealous of what we don't have. Everybody has the same opportunities to become a 1% you just have to be willing to work for it if that's what you want, as they did. But I don't believe that money always determines your worth to society, or your success.

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