Gdp Per Capita Quotes

History has shown, of course, that a tenfold increase in global GDP per capita is possible without AI—it’s just that it took 190 years (from 1820 to 2010) to achieve that increase.

It turns out from a number of more recent studies that reported happiness is strongly positively linked with the change or growth in GDP per capita from year to year.

America of the 1920s had the same real per-capita GDP as Turkmenistan does today.

Most obviously, GDP per capita correlates with longevity, health, and nutrition.57 Less obviously, it correlates with higher ethical values like peace, freedom, human rights, and tolerance.58

In the twentieth century per capita GDP was perhaps the supreme yardstick for evaluating national success. From this perspective, Singapore, each of whose citizens produces on average $56,000 worth of goods and services a year, is a more successful country than Costa Rica, whose citizens produce only $14,000 a year. But nowadays thinkers, politicians and even economists are calling to supplement or even replace GDP with GDH – gross domestic happiness. After all, what do people want? They don’t want to produce. They want to be happy. Production is important because it provides the material basis for happiness. But it is only the means, not the end. In one survey after another Costa Ricans report far higher levels of life satisfaction than Singaporeans. Would you rather be a highly productive but dissatisfied Singaporean, or a less productive but satisfied Costa Rican?

How much does it cost to treat leprosy? One $3 dose of antibiotic will cure a mild case; a $20 regimen of three antibiotics will cure a more severe case. The World Health Organization even provides the drugs free, but India‘s health care infrastructure is not good enough to identify the afflicted and get them the medicine they need. So, more than 100,000 people in India are horribly disfigured by a disease that costs $3 to cure. That is what it means to have a per capita GDP of $2,900.

Consider this thought experiment: if Portugal has higher levels of human welfare than the United States with $38,000 less GDP per capita, then we can conclude that $38,000 of America’s per capita income is effectively ‘wasted’. That adds up to $13 trillion per year for the US economy as a whole. That’s $13 trillion worth of extraction and production and consumption each year, and $13 trillion worth of ecological pressure, that adds nothing, in and of itself, to the fundamentals of human welfare. It is damage without gain. This means that the US economy could in theory be scaled down by a staggering 65% from its present size while at the same time improving the lives of ordinary Americans, if income was distributed more fairly and invested in public goods.

One problem with most current governments is that they prioritize economic growth (as mismeasured by GDP per capita) over citizens’ happiness, quality of life, efficiency of trait display, and breadth and depth of social networks. The latter outcomes are not actually any harder to measure than GDP per capita. For example, the UN Human Development Index (HDI) measures overall quality of life fairly well by taking into account life expectancy, literacy, and educational attainment; this index puts Iceland, Norway, Australia, and Canada at the top, and the Democratic Republic of the Congo at the bottom.

Even when expressed in constant (inflation-adjusted) monies, US GDP has increased 10-fold since 1945; and, despite the postwar baby boom, the per capita rate has quadrupled.

The 10 countries with the most people (over 100 million each) are, in descending order of population, China, India, the U.S., Indonesia, Brazil, Pakistan, Russia, Japan, Bangladesh, and Nigeria. The 10 countries with the highest affluence (per-capita real GDP) are, in descending order, Luxembourg, Norway, the U.S., Switzerland, Denmark, Iceland, Austria, Canada, Ireland, and the Netherlands. The only country on both lists is the U.S.

aggregate statistics like GDP per capita and its derivatives such as factor productivity . . . were designed for a steel-and-wheat economy, not one in which information and data are the most dynamic sector. Many of the new goods and services are expensive to design, but once they work, they can be copied at very low or zero costs. That means they tend to contribute little to measured output even if their impact on consumer welfare is very large.

of schooling) with the gross national income per capita—but (not surprisingly) it correlates highly with the average per capita GDP, making the latter variable about as good a measure of the quality of life as the more elaborate index.

Growth in median incomes during this period tracked nearly perfectly with per capita GDP. Three decades later, median household income had increased to about $61,000, an increase of just 22 percent. That growth, however, was driven largely by the entry of women into the workforce. If incomes had moved in lockstep with economic growth—as was the case prior to 1973—the median household would today be earning well in excess of $90,000, over 50 percent more than the $61,000 they do earn.

of the 1 percent saw a bit less than a doubling of real incomes. Those in the 90th through 99th percentiles simply stayed even, with incomes growing at the same rate as per capita GDP, or gross domestic product. And the bottom 90 percent lost relative ground, with their incomes since 1980 growing more slowly than per capita GDP. The result is that the top 1 percent now owns twice as great a share of national wealth as the entire bottom 90 percent. We went from being a world leader in opportunity to being a laggard.

P. J. O’Rourke: “North Korea has a 99% literacy rate, a disciplined, hardworking society, and a $900 per capita GDP. Morocco has a 43.7% literacy rate, a society that spends all day drinking coffee and pestering tourists to buy rugs, and a $3,260 per capita GDP.”1

Upper-middle income and high-income nations – countries over the threshold of $10,000 per capita – could in theory deliver flourishing lives for all, achieving real progress in human development, without needing any additional growth in order to do so. We know exactly what works: reduce inequality, invest in universal public goods, and distribute income and opportunity more fairly.

Economists comparing the economic growth of various countries have found a strong positive correlation between GDP growth and measured social trust. The effect even seems to apply when comparing different states in the U.S., with one study finding that a ten percent increase in trust translated to about a half percent increase in per capita income growth and even a positive effect on employment rates.

On 10 September 2008, Raghuram Rajan, noted economist and honorary advisor to Prime Minister Manmohan Singh, delivered a speech at the Bombay Chamber of Commerce where he spoke about how most of India's billionaires did not derive their wealth from IT or software but from land, natural resources, and government contracts or licences. He spoke of India being second only to Russia in terms of wealth concentration (the number of billionaires per trillion dollars of GDP). To show how extraordinary this number was he quoted the case of Brazil which had only 18 billionaires despite a greater GDP than India. Or Germany, which had three times India's GDP and a per capita income 40 times India's but had the same number of billionaires. 'If Russia is an oligarchy, how long can we resist calling India one?' he wondered.

Though it’s easy to sneer at national income as a shallow and materialistic measure, it correlates with every indicator of human flourishing, as we will repeatedly see in the chapters to come. Most obviously, GDP per capita correlates with longevity, health, and nutrition.57 Less obviously, it correlates with higher ethical values like peace, freedom, human rights, and tolerance.58 Richer countries, on average, fight fewer wars with each other (chapter 11), are less likely to be riven by civil wars (chapter 11), are more likely to become and stay democratic (chapter 14), and have greater respect for human rights (chapter 14—on average, that is; Arab oil states are rich but repressive). The citizens of richer countries have greater respect for “emancipative” or liberal values such as women’s equality, free speech, gay rights, participatory democracy, and protection of the environment (chapters 10 and 15). Not surprisingly, as countries get richer they get happier (chapter 18); more

In the twentieth century per capita GDP was perhaps the supreme yardstick for evaluating national success. From this perspective, Singapore, each of whose citizens produces on average $56,000 worth of goods and services a year, is a more successful country than Costa Rica, whose citizens produce only $14,000 a year. But nowadays thinkers, politicians and even economists are calling to supplement or even replace GDP with GDH – gross domestic happiness. After all, what do people want? They don’t want to produce. They want to be happy.

Two decades after its first democratic election, South Africa ranks as the most unequal country on Earth.1 A host of policy tools could patch each of South Africa’s ills in piecemeal fashion, yet one force would unquestionably improve them all: economic growth.2 Diminished growth lowers living standards. With 5 percent annual growth, it takes just fourteen years to double a country’s GDP; with 3 percent growth, it takes twenty-four years. In general, emerging economies with a low asset base need to grow faster and accumulate a stock of assets more quickly than more developed economies in which basic living standards are already largely met. Meaningfully increasing per capita income is a critical way to lift people’s living standards and take them out of poverty, thereby truly changing the developmental trajectory of the country. South Africa has managed to push growth above a mere 3 percent only four times since the transition from apartheid, and it has remained all but stalled under 5 percent since 2008. And the forecast for growth in years to come hovers around a paltry 1 percent. Because South Africa’s population has been growing around 1.5 percent per year since 2008, the country’s per capita income has been stagnant over the period.

In North America, there is no nostalgia for the postwar period, quite simply because the Trente Glorieuses never existed there: per capita output grew at roughly the same rate of 1.5–2 percent per year throughout the period 1820–2012. To be sure, growth slowed a bit between 1930 and 1950 to just over 1.5 percent, then increased again to just over 2 percent between 1950 and 1970, and then slowed to less than 1.5 percent between 1990 and 2012. In Western Europe, which suffered much more from the two world wars, the variations are considerably greater: per capita output stagnated between 1913 and 1950 (with a growth rate of just over 0.5 percent) and then leapt ahead to more than 4 percent from 1950 to 1970, before falling sharply to just slightly above US levels (a little more than 2 percent) in the period 1970–1990 and to barely 1.5 percent between 1990 and 2012. Western Europe experienced a golden age of growth between 1950 and 1970, only to see its growth rate diminish to one-half or even one-third of its peak level during the decades that followed. [...] If we looked only at continental Europe, we would find an average per capita output growth rate of 5 percent between 1950 and 1970—a level well beyond that achieved in other advanced countries over the past two centuries. These very different collective experiences of growth in the twentieth century largely explain why public opinion in different countries varies so widely in regard to commercial and financial globalization and indeed to capitalism in general. In continental Europe and especially France, people quite naturally continue to look on the first three postwar decades—a period of strong state intervention in the economy—as a period blessed with rapid growth, and many regard the liberalization of the economy that began around 1980 as the cause of a slowdown. In Great Britain and the United States, postwar history is interpreted quite differently. Between 1950 and 1980, the gap between the English-speaking countries and the countries that had lost the war closed rapidly. By the late 1970s, US magazine covers often denounced the decline of the United States and the success of German and Japanese industry. In Britain, GDP per capita fell below the level of Germany, France, Japan, and even Italy. It may even be the case that this sense of being rivaled (or even overtaken in the case of Britain) played an important part in the “conservative revolution.” Margaret Thatcher in Britain and Ronald Reagan in the United States promised to “roll back the welfare state” that had allegedly sapped the animal spirits of Anglo-Saxon entrepreneurs and thus to return to pure nineteenth-century capitalism, which would allow the United States and Britain to regain the upper hand. Even today, many people in both countries believe that the conservative revolution was remarkably successful, because their growth rates once again matched continental European and Japanese levels. In fact, neither the economic liberalization that began around 1980 nor the state interventionism that began in 1945 deserves such praise or blame. France, Germany, and Japan would very likely have caught up with Britain and the United States following their collapse of 1914–1945 regardless of what policies they had adopted (I say this with only slight exaggeration). The most one can say is that state intervention did no harm. Similarly, once these countries had attained the global technological frontier, it is hardly surprising that they ceased to grow more rapidly than Britain and the United States or that growth rates in all of these wealthy countries more or less equalized [...] Broadly speaking, the US and British policies of economic liberalization appear to have had little effect on this simple reality, since they neither increased growth nor decreased it.

Most countries that make great economic and social progress are not democracies. South Korea moved from Level 1 to Level 3 faster than any country had ever done (without finding oil), all the time as a military dictatorship. Of the ten countries with the fastest economic growth in 2016, nine of them score low on democracy. Anyone who claims that democracy is a necessity for economic growth and health improvements will risk getting contradicted by reality. It’s better to argue for democracy as a goal in itself instead of as a superior means to other goals we like. There is no single measure—not GDP per capita, not child mortality (as in Cuba), not individual freedom (as in the United States), not even democracy—whose improvement will guarantee improvements in all the others. There is no single indicator through which we can measure the progress of a nation. Reality is just more complicated than that. The world cannot be understood without numbers, nor through numbers alone. A country cannot function without a government, but the government cannot solve every problem. Neither the public sector nor the private sector is always the answer. No single measure of a good society can drive every other aspect of its development. It’s not either/or. It’s both and it’s case-by-case. Factfulness Factfulness is … recognizing that a single perspective can limit your imagination, and remembering that it is better to look at problems from many angles to get a more accurate understanding and find practical solutions. To control the single perspective instinct, get a toolbox, not a hammer.

By the end of the 1970s, a clear majority of the employed population of Britain, Germany, France, the Benelux countries, Scandinavia and the Alpine countries worked in the service sector—communications, transport, banking, public administration and the like. Italy, Spain and Ireland were very close behind. In Communist Eastern Europe, by contrast, the overwhelming majority of former peasants were directed into labour-intensive and technologically retarded mining and industrial manufacture; in Czechoslovakia, employment in the tertiary, service sector actually declined during the course of the 1950s. Just as the output of coal and iron-ore was tailing off in mid-1950s Belgium, France, West Germany and the UK, so it continued to increase in Poland, Czechoslovakia and the GDR. The Communists’ dogmatic emphasis on raw material extraction and primary goods production did generate rapid initial growth in gross output and per capita GDP. In the short run the industrial emphasis of the Communist command economies thus appeared impressive (not least to many Western observers). But it boded ill for the region’s future.

Here are the main facts:1 Between 1980 and 2016, average national income per adult, expressed in 2016 euros, rose from 25,000 euros to just over 33,000 euros, or a rise of approximately 30%. At the same time, the average wealth held derived from property per adult doubled, rising from 90,000 to 190,000 euros. Yet more striking: the wealth of the richest 1%, 70% of which is in financial assets, rose from 1.4 to 4.5 million euros, or increased more than threefold. As to the 0.1% of the wealthiest, 90% of whose wealth is held in financial assets, and who will be the main beneficiaries of the abolition of the wealth tax, their fortunes rose from 4 to 20 million euros, that is, they increased fivefold. In other words, the biggest fortunes in financial assets rose even more rapidly than property assets, whereas the opposite should have been the case if the hypothesis of a fiscal flight were true. Moreover, this type of finding is a characteristic in the ranking of fortunes, in France as in all countries. According to Forbes, the top world fortunes, which are almost exclusively held in financial assets—have risen at a rate of 6% to 7% per year (on top of inflation) since the 1980s, or 3–4 times more rapidly than growth in GDP and of world per capita wealth.

Almost all official statistics and policy documents on wages, income, gross domestic product (GDP), crime, unemployment rates, innovation rates, cost of living indices, morbidity and mortality rates, and poverty rates are compiled by governmental agencies and international bodies worldwide in terms of both total aggregate and per capita metrics. Furthermore, well-known composite indices of urban performance and the quality of life, such as those assembled by the World Economic Forum and magazines like Fortune, Forbes, and The Economist, primarily rely on naive linear combinations of such measures.6 Because we have quantitative scaling curves for many of these urban characteristics and a theoretical framework for their underlying dynamics we can do much better in devising a scientific basis for assessing performance and ranking cities. The ubiquitous use of per capita indicators for ranking and comparing cities is particularly egregious because it implicitly assumes that the baseline, or null hypothesis, for any urban characteristic is that it scales linearly with population size. In other words, it presumes that an idealized city is just the linear sum of the activities of all of its citizens, thereby ignoring its most essential feature and the very point of its existence, namely, that it is a collective emergent agglomeration resulting from nonlinear social and organizational interactions. Cities are quintessentially complex adaptive systems and, as such, are significantly more than just the simple linear sum of their individual components and constituents, whether buildings, roads, people, or money. This is expressed by the superlinear scaling laws whose exponents are 1.15 rather than 1.00. This approximately 15 percent increase in all socioeconomic activity with every doubling of the population size happens almost independently of administrators, politicians, planners, history, geographical location, and culture.

MY DEMOGRAPHIC RESEARCH makes it crystal clear that emerging countries, outside of China and a few others like Thailand, will dominate demographic growth in the next global boom. But the even more powerful factor is the urbanization process, with the typical emerging country only 50 percent urbanized, as compared with 85 percent in the typical developed country. In emerging countries, urbanization increases household income as much as three times from its level in rural areas. As people move into the cities, they also climb the social and economic ladder into the middle class. With the cycles swirling around us for the next several years and the force of revolution reshaping our world, emerging markets are in the best position to come booming out the other side. That’s why investors and businesses should be investing more in emerging countries when this crash likely sees its worst, by early 2020. My research is unique when it comes to projecting urbanization, GDP per capita gains from it, and demographic workforce growth trends and peaks in emerging countries. It’s not what I’m most known for, but it’s the most strategic factor in the next global boom, which emerging countries will dominate. As a general guideline, those in South and Southeast Asia, from the Philippines to India and Pakistan, have strong demographic growth, urbanization trends, and productivity gains ahead. This is not the case for China, though. Latin America has mostly strong demographic growth, but limited continued urbanization and productivity gains. Much of the Middle East and Africa have not joined the democratic-capitalism party, but those regions otherwise have the most extreme urbanization and demographic potential. One day they’ll be the best places to invest, but not yet.

My father was born in 1935. In his lifetime the world’s population more than tripled—from roughly 2.3 billion to about 7.7 billion. But over the same period, world GDP increased fifteen-fold, and GPD per capita has increased from approximately $3,000 to nearly $15,000.5 That’s enough money to permit every man, woman, and child on the planet to meet the core requirements for human happiness: to have enough to eat, decent shelter, and physical security. We are more peaceful and inclusive than our ancestors would have believed possible. In 1800 slavery was legal almost everywhere, and women did not have the right to vote. Now forced labor is only legal in three countries, and women can vote everywhere there is voting. Almost no one lived in a democracy in 1800. Now more than half of humanity does so; nearly every child receives some form of primary education; and 86 percent of the world’s population can read and write. The young are much more likely to believe

Real GDP per capita increased eightfold in the last hundred years.

The UN World Happiness Report put this down to a large gross domestic product (GDP) per capita, high life expectancy, a lack of corruption, a heightened sense of social support, freedom to make life choices and a culture of generosity. Scandinavian neighbours Norway and Sweden nuzzled alongside at the top of the happy-nation list, but it was Denmark that stood out. The country also topped the UK Office of National Statistics’ list of the world’s happiest nations and the European Commission’s well-being and happiness index – a position it had held onto for 40 years in a row.

America, a country with a GDP per capita of $55,000,12 does not have the cash on hand to finance all of its consumption and investment.

In between the two extremes, there’s a sweet spot for commodities demand. After per capita income rises above $4,000, countries typically industrialise and urbanise, creating a strong, and sometimes disproportionate, relationship between further economic growth and extra commodity demand. China hit the commodity sweet spot around the time that Davis wrote his Xstrata memo: its GDP per capita reached $3,959 in 2001.6 Davis’s analysis wasn’t based on detailed economic modelling, but he knew from his travels there that something big was happening in China that could supercharge the commodity markets

The government had no response to this finding, just as it had none when India fell in GDP per capita behind Bangladesh. In 2014, India’s per capita GDP ($1573) was about 50 per cent ahead of Bangladesh’s ($1118).179 At the end of the financial year 2020–21, Bangladesh was at $2227 and India at $1947.180 In the Modi years, Bangladesh has quietly doubled its income while India has produced much bluster without performance.

Economist Paul Romer often starts with a very simple question, How is it that we are wealthier today than we were 100 or 1,000 years ago? After all, the underlying quantity of the world’s raw materials—in the extreme, the earth’s total physical mass—hasn’t changed, and we have to divide this mass among a much larger human population. Yet worldwide per capita GDP is roughly thirty times what it was a millennium ago, with much of the increase occurring in the past 150 years (see exhibit 18.2).2 Romer’s rather straightforward explanation is that we have progressively learned how to rearrange raw materials to make them more and more valuable.

If the use of free products reduces GDP per capita, then so much the worse for the idea that GDP measures value.

In 1960, Singapore was a bit more than twice as prosperous as Senegal (US$1,400 vs. US$3,500 annual GDP per capita). Now they are almost forty times as prosperous as we are (US$1,500 vs. US$58,000). Imagine if we had the commitment to capitalism provided by Lee Kuan Yew instead of the socialism provided by Leopold Senghor!

Of the world’s top ten per capita carbon dioxide emitters in 2000, six are outside Annex I, including the top three, Qatar (with per capita emissions three times those of the US and nearly six times the average of the developed world), the United Arab Emirates and Kuwait.[25] Neither is per capita GDP a criterion for inclusion. By 2009 for example, non-Annex I South Korea had per capita GDP of $23,407, just $278 less than the EU’s at $23,685.[26]

measures like GDP per person give only a rough reflection of the overall level of wellbeing of an individual or a nation. But for sustainable development we are interested in raising human wellbeing, not just in raising income, still less in a mad race for more riches for people who are already rich. Therefore, it is important to ask how we can best measure wellbeing (or life satisfaction) beyond GDP per capita.

Aztec peasants, Babylonian shepherds, Athenian stonemasons, and Carolingian merchants spoke different languages,2 wore different clothing, and prayed to different deities, but they all ate the same amount of food, lived the same number of years, traveled no farther—or faster—from their homes, and buried just as many of their children. Because while they made a lot more children—worldwide population grew a hundredfold between 5000 BCE and 1600 CE, from 5 to 500 million—they didn’t make much of anything else. The best estimates for human productivity (a necessarily vague number) calculate annual per capita GDP, expressed in constant 1990 U.S. dollars, fluctuating between $400 and $550 for seven thousand years. The worldwide per capita GDP in 800 BCE3—$543—is virtually identical to the number in 1600. The average person of William Shakespeare’s time lived no better than his counterpart in Homer’s.

A second important difference between the international environment that shaped Western states and the one that is now shaping post-colonial Middle Eastern states is that many in the latter category can trade petrodollars (or strategic rents) for Western arms, which artificially increases the ability of the rulers to coerce the ruled.[8] At the turn of the century, the Middle East already spent more of its GDP per capita on defence than any other region. Between 1999 and 2008, that spending increased by another 34%.[9] With this difference in mind, it is unrealistic to insist, as Western diplomats and leaders have done following the removal of Mubarak, that transitions from dictatorships to fledgling democracies must be orderly. This is particularly unrealistic given that the international weapons trade, the international reliance on oil and the Western tendency to view the region through a lens of counter-terrorism objectives have all helped to sustain these regimes, but cannot realistically be altered by those who take to the street in protest.

Hibbs's: the average rate of unemployment over the entire postwar era has been almost a full percentage point lower under Democratic presidents than under Republicans, while the average rate of real per capita GDP growth has been more than a full percentage point higher.

As Erik Brynjolfsson and Andrew McAfee point out in their book, the four key measures of an economy’s health (per capita GDP, labor productivity, the number of jobs, and median household income) all rose together for most of the Cold War years. “For more than three decades after World War II, all four went up steadily and in almost perfect lockstep,” Brynjolfsson noted in a June 2015 interview with the Harvard Business Review. “Job growth and wage growth, in other words, kept pace with gains in output and productivity. American workers not only created more wealth but also captured a proportional share of the gains.” In

There’s a country that does something a little like this. Its young people, including its very best educational prospects from all different backgrounds, spend two or three years training and solving problems in a nonhierarchical environment and get together every year. Many then collaborate to start companies. This country leads the world in venture capital investments per capita (over $170, versus $75 in the United States in 2010).1 It has more companies on the NASDAQ than any non-US country except for China, despite having a population of less than eight million.2 Its quarterly gross domestic product (GDP) growth rate was above 5 percent in 2011 and it’s in the top thirty globally in per capita GDP, above Spain and Saudi Arabia, among others.3 This country is Israel, where eighteen-year-olds complete two- or three-year tours in the military, getting to know each other in highly selective military units. They operate at a high level of autonomy and responsibility and then travel the world for months before heading to college and/or grad school. In Dan Senor and Saul Singer’s book Start-up Nation, this network and training ground is credited as helping give rise to a culture of risk taking and entrepreneurship. By the time Israelis graduate from college, they’re in their midtwenties and mature; in many cases, they’ve already been in operating environments and borne life-and-death responsibilities. This cocktail of experience gives rise to a mixture of both courage and impatience. As one entrepreneur put it, “When an Israeli entrepreneur has a business idea, he will start it that week. The notion that one should accumulate credentials before launching a venture simply does not exist. . . . Too much time can only teach you what can go wrong, not what could be transformative.”4 Another observer commented, “Israelis . . .  don’t care about the social price of failure and they develop their projects regardless of the economic . . . situation.”5

Between state building and economic growth Having a state is a basic precondition for intensive economic growth. The economist Paul Collier has demonstrated the converse of this proposition, namely, that state breakdown, civil war, and interstate conflict have very negative consequences for growth.20 A great deal of Africa’s poverty in the late twentieth century was related to the fact that states there were very weak and subject to constant breakdown and instability. Beyond the establishment of a state that can provide for basic order, greater administrative capacity is also strongly correlated with economic growth. This is particularly true at low absolute levels of per capita GDP (less than $1,000); while it remains important at higher levels of income, the impact may not be proportionate. There is also a large literature linking good governance to economic growth, though the definition of “good governance” is not well established and, depending on the author, sometimes includes all three components of political development.21 While the correlation between a strong, coherent state and economic growth is well established, the direction of causality is not always clear. The economist Jeffrey Sachs has maintained that good governance is endogenous: it is the product of economic growth rather than a cause of it.22 There is a good logic to this: government costs money. One of the reasons why there is so much corruption in poor countries is that they cannot afford to pay their civil servants adequate salaries to feed their families, so they are inclined to take bribes. Per capita spending on all government services, from armies and roads to schools and police on the street, was about $17,000 in the United States in 2008 but only $19 in Afghanistan.23 It is therefore not a surprise that the Afghan state is much weaker than the American one, or that large flows of aid money generate corruption.

On the other hand, there are a number of cases where economic growth did not produce better governance, but where, to the contrary, it was good governance that was responsible for growth. Consider South Korea and Nigeria. In 1954, following the Korean War, South Korea’s per capita GDP was lower than that of Nigeria, which was to win its independence from Britain in 1960. Over the following fifty years, Nigeria took in more than $300 billion in oil revenues, and yet its per capita income declined in the years between 1975 and 1995. In contrast, South Korea grew at rates ranging from 7 to 9 percent per year over this same period, to the point that it became the world’s twelfth-largest economy by the time of the Asian financial crisis in 1997. The reason for this difference in performance is almost entirely attributable to the far superior government that presided over South Korea compared to Nigeria.

Between economic growth and stable democracy The correlation between development and democracy was first noted by the sociologist Seymour Martin Lipset in the late 1950s, and ever since then there have been many studies linking development to democracy.25 The relationship between growth and democracy may not be linear—that is, more growth does not necessarily always produce more democracy. The economist Robert Barro has shown that the correlation is stronger at lower levels of income and weaker at middle levels.26 One of the most comprehensive studies of the relationship between development and democracy shows that transitions into democracy from autocracy can occur at any level of development but are much less likely to be reversed at higher levels of per capita GDP.27 Whereas growth appears to favor stable democracy, the reverse causal connection between democracy and growth is much less clear. This stands to reason if we simply consider the number of authoritarian countries that have piled up impressive growth records over recent years—South Korea and Taiwan while they were ruled dictatorially, the People’s Republic of China, Singapore, Indonesia under Suharto, and Chile under Augusto Pinochet. Thus, while having a coherent state and reasonably good governance is a condition for growth, it is not clear that democracy plays the same positive role.

It’s still running today. If you examined the years since 1800 in twenty-year increments, and charted every way that human welfare can be expressed in numbers—not just annual per capita GDP, which climbed to more than $6,000 by 2000, but mortality at birth (in fact, mortality at any age); calories consumed; prevalence of infectious disease; average height of adults; percentage of lifetime spent disabled; percentage of population living in poverty; number of rooms per person; percentage of population enrolled in primary, secondary, and postsecondary education; illiteracy; and annual hours of leisure time—the chart will show every measure better at the end of the period than it was at the beginning. And the phenomenon isn’t restricted to Europe and North America; the same improvements have occurred in every region of the world. A baby born in France in 1800 could expect to live thirty years—twenty-five years less than a baby born in the Republic of the Congo in 2000. The nineteenth-century French infant4 would be at significantly greater risk of starvation, infectious disease, and violence, and even if he or she were to survive into adulthood, would be far less likely to learn how to read.

Leisure time is not counted at all; if people decide to work less, and take more time for things they value more than work, national income and consumers’ expenditure will fall. One reason that French GDP per capita is lower than American GDP per capita is because the French take longer holidays, but it is hard to argue that they are worse off as a result. Nor do we count services that are not sold in the market, so that if a woman works at home to care for her family, it is not counted, but if she works in someone else’s home to care for their family, it is counted, and national income will be higher. If

capita in the Republic of Korea was 121.8%. For Taiwan, that figure was 88.0%. In Hong Kong, real GDP growth per capita in that period leaped 64.2%, while in Singapore it was 77.5%. Growth in real earnings has been even more impressive,

one of the things we’re concerned about is the quest for infinite growth (an unavoidable feature of capitalism) on a finite planet. With that imperative, the biosphere is now subsumed under the economy. This has to be reversed. That is, the biosphere is now seen in strictly utilitarian terms to be simply a storehouse of resources, and/or a receptacle for waste. Also under capitalist compulsion, people now serve the economy, rather than the other way around. Development should be about people, not about objects. Development, often seen as synonymous with progress, is equated with growth, measured as GNP or GDP, sometimes per capita. This must be challenged, and we need differential criteria and different metrics for what constitutes development and progress. Right now these are equated. Development doesn’t necessarily require growth, development has no limits, growth has limits or should. And this is clearly referring back to the growth/de-growth debate that we read about. All of this is underlain by issues of what constitutes happiness, satisfaction, and quality of life. What do these actually essential elements of life actually depend on? At the moment, under our current capitalist system, and its associated common sense, these aspects are measured by the acquisition of more and more things. But we don’t go readily into this mindset, we have to actually be induced or seduced. Global advertising spending in 2014 was $488.48 billion and is projected to grow to $757.44 billion by 2021. So, think about the enormous effort, the enormous, strenuous, and continuous effort to persuade people that things that they merely want are really things that they must have, that they need. And this is the business of marketing and advertising. And as Noam pointed out previously, this completely distorts the notion of the so-called free market in which rational people make rational choices based on real needs.

No, no, no,” replied Brynjolfsson. “From about the 1930s through about the 1960s, the [top] tax rate averaged about seventy percent. At times it was up at ninety-five percent. And those were actually pretty good years for growth.” Indeed they were. Between 1948 and 1973, real GDP grew 170 percent in the United States and per capita income nearly doubled. During that same period, the revenue collected through that progressive tax code made it possible to build an interstate highway system and fund the space program, while dramatically expanding the social safety net, with new programs like Medicare, Medicaid, Head Start, and food stamps. Even with historically high tax rates on the wealthiest Americans, the period of economic expansion came to be viewed as a golden age of capitalism. And with government largely delivering for people in a way they had not seen before, these years were also not coincidentally an age that saw Americans two to three times more likely to express trust in their government than they have in more recent years.

the United Nations Conference on Trade and Development (UNCTAD) issued a grim report on the conditions in Gaza. UNCTAD determined that the Israeli-Egyptian blockade, which had lasted for eight years at the time, and the three major military operations Gaza had endured, had “shattered [Gaza’s] ability to export and produce for the domestic market, ravaged its already debilitated infrastructure, left no time for reconstruction and economic recovery, and accelerated the de-development of the Occupied Palestinian Territory.” The report detailed the devastation of Gaza’s civilian infrastructure and the collapse of its economic sector, as revealed by the ballooning of its unemployment rate, to 44 percent in 2014, and the shrinking of its per capita GDP, by 30 percent since 1994. “Food insecurity affects 72 per cent of households, and the number of Palestinian refugees solely reliant on food distribution from United Nations agencies had increased from 72,000 in 2000 to 868,000 by May 2015.” Ninety-five percent of the water in the coastal aquifers on which Gaza relied was not drinkable.106

The World Economic Forum, which tracks performance on gender equality measures in 134 countries, reports a clear correlation between progress in gender and GDP per capita. And a recent study found that Fortune 500 companies with the highest number of women on their boards were 53-percent more profitable than those with the fewest women board members. Where women have access to secondary education, good jobs, land and other assets, national growth and stability are enhanced, and we see lower maternal mortality, improved child nutrition, greater food security and less risk of HIV and AIDS.

The Japanese experience, since the early 1990s, is worrying in this respect. After the bubble economy collapsed and the private sector went into deleveraging mode, low interest rates have prevailed. During Japan’s two lost decades, returns on equity have been persistently lower than in Europe or the US–they currently average around 8 per cent compared to 12 per cent and 15 per cent respectively, albeit with lower gearing. Despite Japan introducing the world to ZIRP (the zero-interest rate policy), the country’s nominal GDP per capita remains below the 1991 level. Rather like the current Western experience, the decline in private sector leverage has been replaced by rising public sector debt–which is now over 200 per cent of GDP, up from around 50 per cent in the early 1990s. Total debt, both public and private, is greater today, relative to Japan’s economy, than in 1990. In short, Japan’s long experiment with low rates has hardly been a positive one, with respect to either corporate profitability or the country’s ability to outgrow its debt burden.

The preferred measure of the wealth of nations is per capita gross domestic product (per capita GDP). Why should we focus on this dry statistic rather than on more literal measures, such as indexes of well-being, consumption, or happiness?

Over the past millennium, world population rose nearly 24-fold, per capita income 14-fold, GDP 338-fold. This contrasts sharply with the preceding millennium, when world population grew by only a sixth, and per capita income fell. From the year 1000 to 1820, growth was predominantly extensive. Most of the GDP increase went to accommodate a four-fold increase in population. The advance in per capita income was a slow crawl—the world average increased only by half over a period of eight centuries. In the year 1000, the average infant could expect to live about 24 years. A third died in the first year of life. Hunger and epidemic disease ravaged the survivors. By 1820, life expectation had risen to 36 years in the west, with only marginal improvement elsewhere. After 1820, world development became much more dynamic. By 2003, income per head had risen nearly ten-fold, population six-fold. Per capita income rose by 1.2 per cent a year: 24 times as fast as in 1000–1820. Population grew about 1 per cent a year: six times as fast as in 1000–1820. Life expectation increased to 76 years in the west and 63 in the rest of the world.

Recall that GDP, gross domestic product, the dominant metric in economics for the last century, consists of a combination of consumption, plus private investments, plus government spending, plus exports-minus-imports. Criticisms of GDP are many, as it includes destructive activities as positive economic numbers, and excludes many kinds of negative externalities, as well as issues of health, social reproduction, citizen satisfaction, and so on. Alternative measures that compensate for these deficiencies include: the Genuine Progress Indicator, which uses twenty-six different variables to determine its single index number; the UN’s Human Development Index, developed by Pakistani economist Mahbub ul Haq in 1990, which combines life expectancy, education levels, and gross national income per capita (later the UN introduced the inequality-adjusted HDI); the UN’s Inclusive Wealth Report, which combines manufactured capital, human capital, natural capital, adjusted by factors including carbon emissions; the Happy Planet Index, created by the New Economic Forum, which combines well-being as reported by citizens, life expectancy, and inequality of outcomes, divided by ecological footprint (by this rubric the US scores 20.1 out of 100, and comes in 108th out of 140 countries rated); the Food Sustainability Index, formulated by Barilla Center for Food and Nutrition, which uses fifty-eight metrics to measure food security, welfare, and ecological sustainability; the Ecological Footprint, as developed by the Global Footprint Network, which estimates how much land it would take to sustainably support the lifestyle of a town or country, an amount always larger by considerable margins than the political entities being evaluated, except for Cuba and a few other countries; and Bhutan’s famous Gross National Happiness, which uses thirty-three metrics to measure the titular quality in quantitative terms.

It is important to distinguish between lead and follower countries to understand the dynamics of technological diffusion, and analyse processes of catch-up and falling behind. ‘Lead’ countries are those whose economies operate nearest to the technical frontier; ‘follower’ countries have a lower level of labour productivity (or GDP per capita). Since 1500 there have been four lead countries, northern Italy in the sixteenth century, the Netherlands from the sixteenth century until the Napoleonic wars, when the UK took over. The British lead lasted until around 1890, and the US has been the leader since then.

Since 1986, America’s GDP per capita has increased by 59 percent. The country’s net worth has grown by 90 percent. Corporate profits have soared by 283 percent.

the more fundamental problem with the big government explanation is that by most measures (all spending, or spending on the welfare state in real per capita terms, or spending as a fraction of GDP; number of government employees) the size of government lagged behind the I-we-I curve by several decades. Federal government spending and the number of employees rose steadily in tandem with the I-we-I curve from 1900 to 1970 and kept rising until they leveled off after the 1980s.

China, meanwhile, was heading the other way, into stagnation and poverty. China went from a state of economic and technological exuberance in around AD 1000 to one of dense population, agrarian backwardness and desperate poverty in 1950. According to Angus Maddison’s estimates, it was the only region in the world with a lower GDP per capita in 1950 than in 1000. The blame for this lies squarely with China’s governments.

GDP per capita is between two and four times higher for China than India, depending on how you measure

10-percentage-point increase in broadband penetration produces the same lift in the population’s subjective well-being as a 2.89% increase in GDP per capita,

As a result, tax revenues and state budgets shrink, at least in relative terms per capita. National debt inevitably grows in order to at least partially cover the shortfall. Of course, it grew enormously after governments bailed out the banks in the wake of the financial crash. The British government did so to the tune of 136.6bn and has admitted that it will never recoup at least £27bn of that amount. In the US the bailout cost at least $14.4 trillion.[56] At the start of of 2019, the US’s national debt stood at nearly $22 trillion, having increased by 10% since Trump took office two years earlier. Under his predecessor Barack Obama, the national debt increased 100%, from $10 trillion to $20 trillion. National debt has to be repaid to the government’s creditors: bondholders, ie people, companies and foreign governments; international organisations such as the World Bank; and private financial institutions. If debt is not or cannot be repaid it becomes increasingly difficult to attract creditors. US national debt when the Great Depression kicked off stood at 16% of GDP and rose to 44% when the depression ended at the end of World War Two. Before the The Great Recession it stood at 65% and by 2013 had exploded to over 100%.[57] Gross national debt and household debt have been at record highs at the same time for the first time ever. Austerity, the socialisation of national debt, therefore becomes an economic necessity, not simply an unfair and immoral ‘political choice’, as is claimed by democratic socialists. That public spending as a share of national income in Britain in 2017 (39.6%) was at the same level as in 2007 (39.6%) after seven years of debt servicing via savage cuts to state welfare and public services suggests national income must have fallen per capita. Indeed, official forecasts suggest that GDP per adult in 2022 will be 18% lower than it would have been had it grown by 2% a year since 2008 – it has averaged 1.1% – broadly the expected rate of growth at that time.

As of July 2017 public spending per capita had fallen by 3.9%.[58] But this figure obscures the the fact that the government is allocating proportionally less of its budget to public services. Per person, day-to-day spending on public services has been cut to about four-fifths of what it was in 2010.[59] Public sector employment was slashed by 15.5% between September 2009 and April 2017, a reduction of nearly one million jobs, primarily affecting women, who make up around two-thirds of the public sector workforce. Overall, £22bn of the £26bn in ‘savings’ since June 2010 have been shouldered by women.[60] Lone mothers (who represent 92% of lone parents) have experienced an average drop in living standards of 18% (£8,790). Black and Asian households in the lowest fifth of incomes are the most affected, with average drops in living standards of 19.2% and 20.1% – £8,407 and £11,678 – respectively.[61] The Office of Budget Responsibility (OBR) has said that the cumulative scale of cuts to welfare are “unprecedented”, with real per capita welfare cap spending in 2021-22 projected to be around 10% lower than its 2015-16 level.[62] The Conservative-Liberal Democrat coalition government initially aimed to eliminate the deficit – the difference between annual government income and expenditure – by 2015. But weaker-than-expected economic growth forced the government to push the date back to 2025. The government tried to spin this as a generous easing of austerity, but it was merely giving itself several years longer to take on the deficit. In December 2017 the OBR said that GDP per person would be 3.5% smaller in 2021 than was forecast in March 2016. Contradicting the government, the OBR said the deficit would not be eliminated until 2031. The Institute for Fiscal Studies added that national debt – then standing at £1.94 trillion, with an annual servicing cost of £48bn – may not return to pre-crisis levels until the 2060s. Pressure on the public finances, primarily from health and social care, is only going to increase. In all of the OBR’s scenarios, spending grows faster than the economy. With health costs running ahead of inflation, the National Health Service (NHS) – already suffering from a £4.3bn annual shortfall – requires a 4% minimum annual increase in funding to maintain expenditure per capita amid a growing and ageing population.

It took humanity 99.4% of its 2.5-million-year history to achieve a per-capita GDP of 90 international dollars about 15,000 years ago (the international dollar is a unit of calculation based on buying-power levels in 1990). It took another 0.59% of human history to double the global GDP to 180 international dollars in 1750. Between 1750 and 2000 – in a period that represents less than 0.01% of the total span of human history – the global per-capita GDP grew 37-fold to 6,600 international dollars.

The country now has the second highest GDP per capita in the world after Luxembourg, and Luxembourg is hardly a proper country.

Pakistan’s poor performance in education is not a function of poverty but of according lower priority by successive governments. There are forty-three countries in the world that are poorer than Pakistan on a per capita GDP basis45 but twenty-four of them send more children to primary school than Pakistan does. Pakistan’s budgetary allocation for education—a meagre 2.6 per cent of GDP in 2015—is abysmally low and actual expenditure—1.5 per cent of GDP—is even less. Pakistan spends around seven times more on its military than on primary education. According to one estimate, just one-fifth of Pakistan’s military budget would be sufficient to finance universal primary education.

While GDP is the standard measure of economic performance,2 there are other indicators, and in virtually every one, the eurozone’s overall performance is dismal, and that of the crisis countries, disastrous: unemployment is very high; youth unemployment is very, very high; and output per capita is lower than before the crisis for the eurozone as a whole, much lower for some of the crisis countries.

There are forty-three countries in the world that are poorer than Pakistan on a per capita GDP basis45 but twenty-four of them send more children to primary school than Pakistan does.

In 1862, Congress passed the Morrill Land Grant College Act, offering up parcels of land to states that they could sell for the purposes of creating and funding universities. From the University of Maine to the University of California system, from Louisiana State University to North Dakota State University, fifty-two new institutions mushroomed into existence across the country.[42] These new universities were meant to churn out a new generation of “educated bureaucrats” to usher the country into an era of modernity, overseeing railroad expansion, agricultural innovation, manufacturing, and trade.[43] Economic analysis has suggested that the Morrill Act was transformative for the nation, creating a massive surge in human capital, leading to increases in university enrollment and GDP per capita, and allowing the United States to rise into the position of global superpower.[44] But the land parceled out for the sake of U.S. economic ascendancy was Indigenous land. Almost eleven million acres of land from nearly 250 Native tribes and communities enabled the universities to garner over $22 million—equivalent to almost $500 million in our time.[45] And those universities have used that money to become bastions of economic opportunity for generation after generation of college students—the vast majority of them White. Despite the fact that these land grant institutions came into being only through the theft of Indigenous land, Native students make up less than half a percentage point of the enrollment at the Morrill Act universities; these schools also have lower graduation rates among Native students than non-Morrill universities.[46]

Fifty years ago, South Korea was an impoverished, war-torn country that lurched from brutal dictatorship to chaotic democracy and then dictatorship again. Few expected it to survive as a state, let alone graduate to becoming a prosperous and stable model for developing countries the world over-and one with an impressive list of achievements in popular culture, to boot. Quite simply, South Koreans have written the most unlikely and impressive story of nation building of the last century. For that reason alone, theirs deserves to be called "the impossible country." South Korea is home to not one, but two miracles. The first is the often-referenced "Miracle on the Han River," the extraordinary economic growth that led the country out of poverty and on the road to wealth, in the 1960s, '70s, and '80s. That South Korea had a GDP of less than US $100 per capita in 1960, precious few natural resources, and only the most basic (and war-ravaged) infrastructure seems scarcely believable looking around Seoul these days. The second miracle is just as precious, though. As recently as 1987, South Korea was a military dictatorship, but today, it has stable, democratic leadership. As other Asian nations like Singapore, and now China, promote a mix of authoritarianism and capitalism, South Korea stands out in the region as an example of a country that values not just wealth but also the rule of law and rights for its citizens. There is another, more negative, source of inspiration for the subtitle, though. As we shall see, genuine contentment largely eludes the people of South Korea, despite all their material success and stability. This is a country that puts too much pressure on its citizens to conform to impossible standards of education, reputation, physical appearance, and career progress. Worldwide, South Korea is second only to Lithuania in terms of suicide per capita. The problem is getting worse, rather than better: between 1989 and 2009, the rate of suicide quintupled. South Korea therefore is "impossible" in its astonishing economic and political achievements but also in the way that it imposes unattainable targets on its people.

In the 1990, there was a rock band in Russia called Bakhyt-Kompot, and they had a song that was musically terrible but an important expression of punk philosophy that articulated one of my own main preoccupations. The chorus went like this: "How come the Czechs have cracked it, but Russia hasn't hacked it? How come the Poles have cracked it, but Russia hasn't hacked it? How come the Germans have cracked it, but Russia hasn't hacked it?" All the countries of the Soviet bloc and the Baltic republics were managing to "crack it," but not us. We had the oil, the gas, the ores and timber, infrastructure of sorts, and industry. We had a lot of highly educated people but it didn't help. I'm not talking about "like in America"; it wasn't even like in Poland. According to current official statistics, 13 percent of people were living below the poverty line; in terms of the average wage, we had been overtaken by China, Lebanon, and Panama. Someday I believe it will all work out and everything will be fine, but we have to face the fact that from the early 1990s to the 2020s, the life of the nation has been wasted moronically, a time of degeneration and failing to keep up. There is good reason why people like me, and those five or ten years older, are called a cursed and lost generation. We are the people who should have been the main beneficiaries of market and political freedom. We could have adapted readily to a new world in a way that was beyond the ability of most earlier generations. Fifteen percent of us should have become entrepreneurs, "like in America." But Russia didn't crack it. No one doubts we are living better now than we were in 1990, but, excuse me, thirty years have passed. Even in North Korea people are living better now than they did then. Scientific and technological progress, whole new branches of the economy, communications, the internet, ATMs, computers . . . Those who claim the rise in living standards relative to the 1990s is due to the exertions and achievements of the Putin regime re like stock joke characters saying, "Thank heaven for Putin! Under his rule the speed of computers has increased a millionfold." The comparison should not be between us as we were in 1990 and us as we are now, but between how we are now and how we could have been if we had grown at just the average global growth rate. We would easily have achieved what we watched in Czechoslovakia, East Germany, China, and South Korea achieve. That is a comparison about which we can only feel sad. This is not some abstract exercise, but thirty years of our lives. And God knows how many more such lost and stolen years lie ahead. For as long as Putin's group is in power, we will count the missed opportunities and be noticing how other countries have overtaken us in per capita GDP, and how those we have always looked down as little better than beggars have overtaken us in terms of their national average income.