How to build a Comparonomic graph
A Comparonomic graph is a simple tool for visually representing how things change over time. For each comparison between two periods, you can choose the following subjective descriptions:
• Unbelievably better
• Much better
• Pretty much the same
• Much worse
• Horrifically worse.
Comparing our lives to King Louis XVI has been chosen as it is a simple, non-controversial way to demonstrate the tool. If we use standard economics to compare King Louis’s income to ours, then he was vastly more affluent than us. Most of our families cannot afford to employ 36,000 people to build our summer palace or have a couple of thousand maintain it. By some estimates, he was worth about two billion dollars in today’s money, but the details don’t matter so much. We can assume he was vastly wealthier than us, but what does that mean?
The first comparisons are selected because they are easy to demonstrate how things change. For example, with housing, some things may be better like sanitation, lighting, heating, and cooling, but some things are worse like size and bling. To demonstrate the new tool, I choose to compare the size of housing. With transport, I compare the speed of transportation. This allows us to demonstrate how to build up a picture without having to debate the details. We can then plot these views on a simple graph to build up a picture of how time periods compare. In the examples below, your opinions of how I have made the comparisons could be different. That doesn’t matter as the point is to demonstrate a tool for building up a picture of how you think things compare over different time periods. In the next chapter, I will show how you could use more objective data to build a view that may reflect the economy overall but, for now, let’s start making some plots to explain how it works.
Take a simple example of the size of one’s home. Clearly, King Louis XVI had a much larger home than the average person these days (his summer palace at Versailles was okay too). The comparonomic graph below shows this comparison.
When comparing the past with now, start with the question, ‘Would you swap what you have now for then?’ That gives the direction of the line. How strongly you think about that will provide the slope of the line.
Note that the “middle billion” refers to most of the folks in relatively rich countries (OECD) but excludes the richest and poorest 10% so we can focus on what it’s like for most folks.
How to show direction and size of change over time
The comparonomic graph above represents the fact that King Louis has a more substantial home than us. The exact slope of the line is debatable but the direction, not so much.
For another example, let’s compare transport between the two time periods. It is easy to make the comparison because despite King Louis’s relative wealth, the fastest way he had to travel was on a horse. A carriage was slower but more comfortable. Compared to modern cars, planes, trains and even bikes, we are doing somewhat better than King Louis. If these modes of transport were shown to King Louis, they would seem unimaginably better, almost like magic. The comparonomic graph below shows how to represent this.
The comparonomic graph is an easy way to show that our transport is faster, but the size of your home is worse than King Louis’s. This way we can build up a picture of which things have got better or worse and roughly by how much.
Some things have probably not changed too much. As an example, we probably sleep much the same. I suspect the average person in the 18th century was not as comfortable as we are today, but the King was probably quite comfortable. This is an example to show that sleep has perhaps not changed too much over time.
Now let’s continue adding comparisons to show how a richer picture can be built up. Consider the state of medical practice. Again, it is easy to show that much of what we take for granted today would be unbelievably better than King Louis had. Some of the practices in the 18th century we would deem horrifically bad —- bloodletting, lead acetate cures, urine for eye infections and opioids to keep the kids calm (this one is at least tempting sometimes maybe).
The last comparison added is social status to show you can also add non-economic differences on the same sort of graph. Obviously, the King had a higher social status than an average person today.
So, we are building up a way to compare two time periods that are explicit about which bits are better or worse and by roughly how much. Rather than saying King Louis was 1000 times more affluent, you can see what is better and what is worse. In some ways, even an average person now lives better than a king. But more importantly, this is a much clearer model that shows what is different. The model can be built up rapidly by anyone and is a much more useful way to think about how things change.
I am a big believer in the famous quote ‘all models are wrong, but some are useful. A Comparonomic graph is more useful for understanding how things change over long time periods where the types of goods and services vary significantly.
Note - this is a modified chapter from the book Comparonomics