Amazingly he was right about some things and wrong about the big one

You’d think that a national newspaper – even one staffed almost entirely with arts graduates – like The Guardian would have cottoned on to this idea of inflation. But sadly not, here’s the opening to one of their pieces:

The most desirable career of the 21st century, with numerous advantages over other fast-growing occupations such as hospice carer and rickshaw driver, is being a billionaire. Prior to the incorporation of US Steel in 1901, the world didn’t have a single billion-dollar company, much less a billion-dollar individual. Today, more people than ever are becoming billionaires – 2,000 and counting have made the great leap upward, according to the “global wealth team” at Forbes.

We’re meant to be horrified and shocked of course. Just look at how the 1% are sucking up all the wealth!

Well, yes, except:

If you want to compare the value of a $1,000,000,000.00 Income or Wealth , in 1906 there are four choices. In 2017 the relative:
historic standard of living value of that income or wealth is $28,100,000,000.00
labor earnings of that commodity is $119,000,000,000.00 (using the unskilled wage) or $199,000,000,000.00 (using production worker compensation)
economic status value of that income or wealth is $162,000,000,000.00
economic power value of that income or wealth is $619,000,000,000.00

There’s no one out there with $162 billion as an individual (Bezos is around $100 billion), is there? And looking at the economic power measure, that’s about the same as the size of the largest companies today.

We’re presented with numbers which are meant to show us how Marx was right, there’s been that concentration of capital blah, blah. Adding in inflation shows we ain’t got it. So, The Guardian presents the numbers without correcting for inflation.

Well done there, well done.

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  1. A recurring Guardian theme, and an article of faith among its readers, is that the billionaire got his wealth by unfairly and involuntarily taking it from someone else; that there is a fixed amount of money and happiness on earth, and everything that Bezos has is something that could/should have been mine. In fact, their billions are a blessing; I don’t agree with Bill Gates’ worldview, but his billions enable him to create a high-powered charity by the snap of his fingers. His works, and George Soros’ innumerable front groups, are countered by the Koch Brothers, and ultimately, we voters get to decide.

    Of course, what has happened since 1901 is not primarily a concentration of riches nor even our vast increase in general wealth and lifespan, but that the definition of the dollar has totally changed. The promise (gradually adjusted downward over the years) to redeem it for 1/35 of an ounce of gold was repudiated by Nixon and ignored by his successors.

  2. Interesting that she focuses on more rich people.
    I wonder what she would think if she ever found out that the average man is vastly richer now than was his equivalent in 1901. Which is very much the case with inflation taken into account. Ignore inflation and the average guy is hundreds of times better off.

  3. What we should do is appropriate the wealth of the 1% and distribute it evenly to the 99%. If we’re lucky we should each end up with about £56 – nobody will be any better off in a meaningful sense, but at least we will have a more fair and equitable society.