I went in the field of economic history after I discovered how much it was to properly measure living standards. The issue that always interested me was how to “capture” the multidimensional nature of living standards. After all, what weight should we give to an extra year of life relative to the quality of that extra year (see all my stuff on Cuba)?
However, I never tried to create “a composite” measure of living standards. I thought that it was necessary, first, to get the measurements right. However, I had been aware of the work of Leandro Prados de la Escosura who has been doing considerable work on this in order to create composite measures (Leandro also influenced me on my Cuba reasoning – see this article).
A year ago, I discovered the work of Daniel Gallardo Albarrán from the University of Groningen at the meeting of the Economic History Society (EHS). Daniel’s work is particularly interesting because he is trying to generate a composite measure of well-being at one of the most important moment in history: the start of the British industrial revolution.
Because of its importance and some pieces of contradicting evidence (inequality, stature, amplitude of real wage increases, amplitude of income increases, urban pollution leading to increased mortality risks etc), the period has been begging for some form of composite measure to come along (at least a serious attempt at generating it). Drawing on some pretty straightforward microeconomic theory (the Beckerian in me likes this), Daniel generates this rich graph (see the paper here).
The idea is very neat and I hope it will inspire some economic historians to attempt an expansion upon Daniel’s work. I have already drawn outlines for my own stuff on Canada since I study an era when (from the early 1800s to the mid-1850s) real wages and incomes seem to be going up but stature and mortality are either deteriorating or remaining stable while inequality is clearly increasing.
A few days ago, it was confirmed that my article with Vadim Kufenko and Alex Arsenault Morin on the heights of French-Canadians between 1780 and 1830 was accepted for publication in Economics and Human Biology. In that paper, we try to introduce French-Canadians before 1850 to the anthropometric history literature by using the records of the prison of Quebec City. Stature is an important measure of living standards. As it is heavily related to other aspects of health outcomes, it is a strong measure of biological living standards. More importantly, there are moments in history when material living standards and biological living standards move in opposite directions (in the long-run, this is not the case).
We find three key results. The first is that the French-Canadians grew shorter throughout the era when living standards did not increase importantly (and were very volatile). This puts them at odds from other places in North America where increases in stature were experienced up until the 1820s. Furthermore, stature stops falling around 1820 when economic growth picked up. This places the French-Canadians in a unique category in North America since it seems unlikely that they experienced a strong version of the antebellum puzzle (decline in stature with increases in material living standards which is what the US experienced). The second key result is that the French-Canadians are the shortest in North America, shorter even than Black Americans in slavery. However, they are considerably taller than most (save Argentinians) Latin Americans. More importantly, they are considerably taller than their counterparts in France. The third key result is related to the second key result. Today, French-Canadians are noticeably shorter than other Canadians. However, the gap was more important in the late 19th century and early 20th century. Pegged as a “striking exception” within Canada, we do not know when it actually started. Thanks to our work, we know that this was true as far back at the early 19th century.
The working paper (dramatically different than the accepted version) is here and I am posting key results in tables and figures below. Moreover, I will be talking about anthropometric history and economic history with Garrett Petersen of Economics Detective Radio this Tuesday (I do not know when the podcast will be made available, but you should subscribe to that show anyways).
Yesterday, James Pethokoukis of the American Enterprise Institute posted, in response to Bernie Sanders’ skepticism towards free market, that capitalism has made human “fantastically better”.
I do not disagree – quite the contrary. However, Pethokoukis makes his case by citing the fact that material quality of life has increased for everyone on earth since the early 19th century. I believe that this is not the strongest case for capitalism. The strongest case relies on health. This is because it addresses an element that skeptics are more concerned about.
Indeed, skeptics of capitalism tend to underline that “there is more to life than material consumption”. And they are right! They merely misunderstand that the “material standard of living” is strongly related to the “stuff of life”. For them, income is of little value as an indicator. Thus, we need to look at the “quality of human life”. And what could be better than our “health”?
The substantial improvement in the material living standard of mankind has been accompanied by substantial improvements in health-related outcomes! Life expectancy, infant mortality, pregnancy-related deaths, malnutrition, risks of dying from contagious diseases, occupational fatalities, heights, the types of diseases we die from, quality of life during old age, the physical requirements of work and the risks related to famines have all gone in directions indicating substantial improvements!
My favorite is the case of height. Human stature is strongly correlated with income and other health outcomes (net nutrition, risks of disease, life expectancy, pregnancy-related variables). Thus it is an incredible indicator of the improvement in the “stuff of life”. And throughout the globe since the industrial revolution, heights have increased (not equally though). Over at OurWorldInData.org, Max Roser shows this increase since the 1800s (in centimeters)
However, the true magnitude of the increase in human heights is best seen in the data from Gregory Clark who used skeletal remains found in archaeological sites for ancient societies. The magnitude of the improvement is even clearer through this graph.
The ability of “capitalism” to generate improvement in material living standards did leak into broader measures of human well-being. By far, this is the greatest outcome from capitalism.