Instead of comparing people's incomes, we should compare how we spend our time now versus how we spent it in the past.
"Compare yourself to who you were yesterday, not to who someone else is today," says Canadian psychologist Jordan Peterson. Since everyone has the same 24 hours in a day and no one can really buy time (if they could, rich people would never die), it might be best to look at how we spend our time differently. Instead of comparing how much money people make, we should compare how they spend their time today vs. how they spent their time yesterday.
The nominal gross domestic product (GDP) per person in China in 1960, according to the World Bank, was $89.50. By 2021, the price had gone up by 13,929%, to $12,556. During the same time period, India's nominal GDP went from $82.19 to $2,277.43, which is a 2,671 percent increase. In the United States, nominal GDP went from $3,007 to $69,287, which is a 2,204 percent increase.
The GDP per person in China grew six times faster than the GDP per person in the United States. In 1960, China had 33.6 times the GDP per person of the United States. It had dropped to 5.52 by 2021. In 1960, India's GDP per person was 36.6 times that of the United States. It had dropped to 30.4 by 2021. China is making pretty good progress, but in terms of GDP per person, there is still a big gap.
Maybe time is a better way to compare how different things are. Let's start with how long it takes to make enough money to buy a basic basket of food. The World Bank keeps track of how much rice, wheat, and maize cost in real money (corn). These three things are the most common ways to get calories all over the world. From a base value of 1 in 1960 to 5.18 in 2021, a measure of nominal prices shows a 418 percent rise.
If you compare the cost of these three foods to China's GDP per person during this time, you can see that the price has gone down by 96.3 percent. In other words, if the Chinese had to work eight hours in 1960 to make enough money to buy food, they would only have to work about 18 minutes in 2021. In 1960, it took them a long time to buy one unit of the three-commodity basket. In 2021, it would only take them a short time to buy 27 units. The Chinese were able to do other things for 7 hours and 42 minutes more each day.
In India, the price of time for a basket of three goods fell by 81.3%. In 1960, an Indian might have had to work eight hours to get enough money to buy food. In 2021, they would only have to work about 90 minutes to get the same amount of money. In 1960, it took them a certain amount of time to buy one unit of the three-item basket. In 2021, they got 5.35 baskets for the same amount of time. So, each day they gained 6 hours and 30 minutes.
Using the three-commodity basket as an index, people in the United States may have had to work an hour a day in 1960 to earn enough money to buy their food, but they will only need to work about 13.5 minutes to do the same in 2021. The price of the three goods in the basket dropped by 77.5 percent over time. In 1960, it took them that long to make enough money to buy one unit of the three-commodity basket. In 2021, they got 4.45 baskets for the same amount of time. The average American now has an extra 46.5 minutes a day to do other things.
From this point of view, the time difference between Chinese and Indians on the one hand and Americans on the other in 1960 was 420 minutes. By 2021, the difference between Indians and Chinese was 76.5 minutes for Indians and 4.5 minutes for Chinese. For every minute the U.S. gained, the Chinese and Indians gained almost 10 and 8.4 minutes, respectively. Time inequality has gone down a lot.
As people learn more and come up with new ways to make basic foods cheaper, they have a lot more time to do other things, like learning and having fun. And we all benefit when people have time to go on learning curves and find out new things.
You can learn more about these economic facts and ideas in our new book, Superabundance, which is available at Amazon.
