We are in the midst of remarkable times, and our relationship to money is very different because of it. Appreciating this can open up possibilities for how you think, feel and act with your money.
We all see the world through the lens of the culture and the times in which we live. People living during the Renaissance didn’t know they were living during the Renaissance and didn’t call it that. It’s often only in hindsight that we can see the pattern.
Today it’s hard to fully appreciate the truly remarkable conditions in which we live. For us it’s just life. For our ancestors, it would be breathtaking.
Consider that for nearly all of mankind’s existence, our ancestors lived on the equivalent of about $1-$3 a day. Imagine paying for your home, your food, your clothing, your medical needs – everything – from a total of $1,095 for the entire year/$91 per month. For us that would be dire poverty, yet that’s what our ancestors have lived on – and, until recently, most of the population on earth.
Something changed all that, beginning in the later 1600’s in Holland, and spreading and growing in England in the 1700’s and moving gradually – and then recently more quickly – throughout the rest of the world.
That $3 a day grew by a very conservative factor of 16, and more realistically, when you include the vast improvement in the quality of goods and services, more like a factor of 100 (how do you compare an iPhone, or antibiotics, with anything in existence a few hundred years ago?).
This was the beginning of the Industrial Revolution, followed soon after by what Deirdre McCloskey calls “The Great Enrichment” – which we are very much still enjoying.
Throughout history there have been times and places of improved economic conditions. But for perspective, the best that you’ll find is maybe a raising of average income to $6 or maybe $8 a day, and that never lasted for very long; and it’s still dire poverty by our standards.
Today, worldwide average income is about $33 a day, and in the wealthier countries it’s more like $100 a day or more.
So if you’re reading this, it’s very likely that the average income among everybody in your country – not just a fortunate few – is more than 30 times what our ancestors could expect to live on. Adding the incalculable innovations and improvements (those iPhones and antibiotics again), we can conservatively more than triple that.
This isn’t the difference between having a clunky car or a nicer car; a small apartment or a large house; shopping at a discount store or a fancy store. This is the difference between a high probability of an early death by starvation or disease; or living a relatively good life until about 80.
In other words, this change since about the year 1800 is a phenomenal improvement in life for all people.
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