Robin writes:
Like every journalist, I'm a news junkie. Every day begins with half an hour on the FT website, devouring as many articles as I can on pretty much any subject. The problem is, both print and broadcast news can give you a rather unbalanced view of the world around us, and I'll admit, I sometimes struggle with the negativity the media often generates. This year in particular the bad news has been unrelenting: war in Ukraine, rising inflation, ever bleaker predictions on climate change and, for those of us in the UK, the death of Queen Elizabeth II and one of the most shambolic episodes in our modern political history. It's very important when negativity is all around to step back and see the bigger picture. As BEN CARLSON explains, progress is happening even if you don't necessarily see it. So don't let the news agenda cloud your sense of perspective. Things WILL get better. Good news is coming. It really is.
There is a lot of negativity in the world these days and I’m not just talking about bear markets, recessions and inflation.
Negativity is much easier to latch onto because it fits in a headline or tweet or 30-second news clip. Progress doesn’t fit in a headline because it takes time to play out.
The world is far from perfect these days but things really are getting better.
I don’t read nearly as many non-fiction books as I used to but two books I’ve read in recent months — by Ronald Bailey and Marian Tupy and by Vaclav Smil — reminded me of the unfathomable amount of progress we’ve made as a species over the past few centuries.
Technological advances
Technology has improved our lives in countless ways but the pandemic showed us all how much we need the physical world to function. I never put much thought into things like supply chains, manufacturing, the movement of goods around the globe, food production and energy storage. These things all just kind of happened behind the scenes.
In the early-1800s more than 70% of Americans worked on farms. By 1900, that number was still north of 40% of the workforce.
Smil points out that less than 1% of the U.S. population is directly engaged in producing the food we eat today. These are the people who run the farms, plough the fields, plant the seeds, apply the fertiliser and so on.
Even though the workforce is much smaller, they are now able to produce on a much bigger scale.
In 1800, it took 150 hours of labor to produce the same amount of wheat than can now be produced in 2 hours of work. The labor needed to produce grain has fallen by 98% since 1800.
These efficiency gains have made it easier to feed more people. The rate of malnutrition globally decreased from 65% in 1950 to less than 9% by 2019. In 1950 that meant fewer than 900 million people with an adequate food supply. It’s now over 7 billion people.
Shorter working hours, more pay
Because of these gains in efficiency, people are working far less than our ancestors. In 1830, the average worker put in 70 hours a week from Monday-Saturday. That’s basically a 12 hours day, 6 days a week. And it was back-breaking work.
The average workweek is now 40 hours a week, Monday-Friday, meaning we’ve cut down on hours worked by one-third. Now many of us are calling into Zoom meeting in our sweatpants, not getting up at the crack of dawn to milk the cows and plow the fields.
Despite working fewer hours and not performing nearly as much physical labour, the economy is massively bigger than it was in the 19th century.
Since 1820, the world’s population is up around eightfold while the size of the global economy has grown more than one hundredfold.
Bailey and Tupy estimate if the global economy maintains its 2.8% growth rate since the year 2000, it will be up another tenfold by the end of this century to more than one quadrillion dollars.
People are also making far more money than they did in the past.
The average global income when Jesus Christ was born is estimated to be around $800 a year (adjusted for inflation). By 1800, that number was up to a little more than $1,100/year. Then from 1800 to 1900, average global incomes doubled to nearly $2,200. By 2016, it was almost $15,000.
So we saw just a 40% increase in the average income over 18 centuries, a 100% increase over the next 100 years and a 600%+ rise in the past 100+ years.
Wealthier and healthier
It might not feel like it right now because inflation is so high, but our incomes go a lot further these days as well. We now have far more room in our budgets for discretionary spending than people did in the past.
According to the BLS, in 1900 the average American family spent nearly 80% of their pay on necessities (food, clothes and housing). People spent more than 40% of their income on food. Owning a home feels out of reach for many young people today but less than 20% of households owned their home in 1900.
The homeownership rate is now more than 60% while household spending that goes towards necessities has dropped to less than 50%.1 The amount spent on food is now less than 13%.
The average size of a new home has increased from 700 square feet in 1900 to more than 2,600 square feet today. Houses are bigger, better and we now have fewer people crammed into them as well. For much of the 19th and early 20th centuries, big families often shared one or two rooms.
Throughout much of human history, women gave birth to an average of 6-8 children because infant mortality was so high. Until 1800, 60% of children died from disease, malnutrition or violence before reaching adulthood. One-third of children died before the age of 5. By 1960, women still gave birth to an average of five children. It’s now less than 2.5 while life expectancy for women has increased from 53 to 72 in that time.
Global life expectancy has doubled over the past 200 years.
Don't dwell on the negativity
Does any of this information help if you’re struggling in life today? Probably not. It might not always feel like it when you’re watching the news or on social media, but it’s important to remember that our species has an unparalleled track record of progress.
Progress is happening. You just don’t see it in the news every day because progress doesn’t make for a good headline. It’s a process not an event.
Don't dwell on all the negativity. Things are getting better, even if you don’t see it every day.
BEN CARLSON is a financial planner and blogger, and is the co-author, with Robin Powell, of Invest Your Way to Financial Freedom. This article first appeared on Ben's blog, A Wealth of Common Sense, and is republished here with his kind permission.
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