How the Global Inequality Gap Has Changed In 200 Years
What makes a person healthy, wealthy, and wise? The UN’s Human Development Index (HDI) measures this by one’s life expectancy, average income, and years of education.
However, the value of each metric varies greatly depending on where you live. Today’s data visualization from Max Roser at Our World in Data summarizes five basic dimensions of development across countries—and how our average standards of living have evolved since 1800.
Health: Mortality Rates and Life Expectancy
Child mortality rates and life expectancy at birth are telltale signs of a country’s overall standard of living, as they indicate a population’s ability to access healthcare services.
Iceland stood at the top of these ranks in 2017, with only a 0.21% mortality rate for children under five years old. On the other end of the spectrum, Somalia had the highest child mortality rate of 12.7%—over three times the current global average.
While there’s a stark contrast between the best and worst performing countries, it’s clear that even Somalia has made significant strides since 1800. At that time, the global average child mortality rate was a whopping 43%.
Lower child mortality is also tied to higher life expectancy. In 1800, the average life expectancy was that of today’s millennial—only 29 years old:
Today, the global average has shot up to 72.2 years, with areas like Japan exceeding this benchmark by more than a decade.
Education: Mean and Expected Years of Schooling
Education levels are measured in two distinct ways:
- Mean years: the average number of years a person aged 25+ receives in their lifetime
- Expected years: the total years a 2-year old child is likely to spend in school
In the 1800s, the mean and expected years of education were both less than a year—only 78 days to be precise. Low attendance rates occurred because children were expected to work during harvests, or contracted long-term illnesses that kept them at home.
Since then, education levels have drastically improved:
|Mean Years of Schooling||Expected Years of schooling|
|Highest||Germany 🇩🇪: 14.1 years||Australia 🇦🇺: 22.9 years|
|Lowest||Burkina Faso 🇧🇫: 1.5 years||South Sudan 🇸🇸: 4.9 years|
|Global Average||8.4 years||12.7 years|
Research shows that investing in education can greatly narrow the inequality gap. Just one additional year of school can:
- Raise a person’s income by up to 10%
- Raise average annual GDP growth by 0.37%
- Reduce the probability of motherhood by 7.3%
- Reduce the likelihood of child marriage by >5 percentage points
Education has a strong correlation with individual wealth, which cascades into national wealth. Not surprisingly, average income has ballooned significantly in two centuries as well.
Wealth: Average GDP Per Capita
Global inequality levels are the most stark when it comes to GDP per capita. While the U.S. stands at $54,225 per person in 2017, resource-rich Qatar brings in more than double this amount—an immense $116,936 per person.
The global average GDP per capita is $15,469, but inequality heavily skews the bottom end of these values. In the Central African Republic, GDP per capita is only $661 today—similar to the average income two hundred years ago.
A Virtuous Cycle
These measures of development clearly feed into one another. Rising life expectancies are an indication of a society’s growing access to healthcare options. Compounded with more years of education, especially for women, this has had a ripple effect on declining fertility rates, contributing to higher per capita incomes.
People largely agree on what goes into human well-being: life, health, sustenance, prosperity, peace, freedom, safety, knowledge, leisure, happiness… If they have improved over time, that, I submit, is progress.
As technology accelerates the pace of change across these indicators, will the global inequality gap narrow more, or expand even wider?
Comparing Recent U.S. Presidents: New Debt Added vs. Precious Metals Production
While gold and silver coin production during U.S. presidencies has declined, public debt continues to climb to historically high levels.
Recent U.S. Presidents: Debt vs. Coins Added
While precious metals can’t be produced out of thin air, U.S. debt can be financed through central bank money creation. In fact, U.S. debt has skyrocketed in recent years under both Democrat and Republican administrations.
This infographic from Texas Precious Metals compares the increase in public debt to the value of gold and silver coin production during U.S. presidencies.
Total Production by Presidential Term
We used U.S. public debt in our calculations, a measure of debt owed to third parties such as foreign governments, corporations, and individuals, while excluding intragovernmental holdings. To derive the value of U.S. minted gold and silver coins, we multiplied new ounces produced by the average closing price of gold or silver in each respective year.
Here’s how debt growth stacks up against gold and silver coin production during recent U.S. presidencies:
|Obama's 1st term (2009-2012)||Obama's Second Term (2013-2016)||Trump's term (2017-Oct 26 2020)|
|U.S. Silver Coins Minted||$3.7B||$3.3B||$1.4B|
|U.S. Gold Coins Minted||$6.7B||$5.1B||$2.9B|
|U.S. Public Debt Added||$5.2T||$2.9T||$6.6T|
Over each consecutive term, gold and silver coin production decreased. In Trump’s term so far, the value of public debt added to the system is almost 1,600 times higher than minted gold and silver coins combined.
During Obama’s first term and Trump’s term, debt saw a marked increase as the administrations provided fiscal stimulus in response to the global financial crisis and the COVID-19 pandemic. As we begin to recover from COVID-19, what might debt growth look like going forward?
U.S. Public Debt Projections
As of September 30, 2020, the end of the federal government’s fiscal year, debt had reached $21 trillion. According to estimates from the Congressional Budget Office, it’s projected to rise steadily in the future.
|U.S. Public Debt||21.9T||23.3T||24.5T||25.7T||26.8T||27.9T||29.0T||30.4T||31.8T||33.5T|
By 2030, debt will have risen by over $12 trillion from 2020 levels and the debt-to-GDP ratio will be almost 109%.
It’s worth noting that debt will likely grow substantially regardless of who is elected in the 2020 U.S. election. Central estimates by the Committee for a Responsible Federal Budget show debt rising by $5 trillion under Trump and $5.6 trillion under Biden through 2030. These estimates exclude any COVID-19 relief policies.
What Could This Mean for Investors?
As the U.S. Federal Reserve creates more money to finance rising government debt, inflation could eventually be pushed higher. This could affect the value of the U.S. dollar.
On the flip side, gold and silver have a limited supply and coin production has decreased over the last three presidential terms. Both can act as an inflation hedge, while playing a role in wealth preservation.
Mapped: The Countries With the Most Military Spending
Global military spending surpassed $1.9 trillion in 2019, but nearly 75% of this total can be traced to just 10 countries.
Mapped: The Countries With the Most Military Spending
Whether it’s fight or flight, there’s a natural tendency of humans to want to protect themselves.
In this day and age, this base instinct takes the form of a nation’s expenditures on armies and armaments, towards an end goal of global security and peacekeeping.
This graphic from the Stockholm International Peace Research Institute (SIPRI) delves into the top military spenders as of 2019.
Top 10 Biggest Military Spenders
Let’s first take a look at the overall growth trends. The world’s military spending grew by 3.6% year-over-year (YoY)—currently the highest rate this decade—to surpass $1.9 trillion in 2019.
While just 10 countries are responsible for nearly 75% of this amount, the U.S. alone made up the lion’s share with 38% of the global total. In fact, its YoY rise in spending alone of $49.2 billion rivals Germany’s entire spending for the same year.
Naturally, many questions rise about where this money goes, including the inevitable surplus of military equipment, from night vision goggles to armored vehicles, that trickles down to law enforcement around the nation.
Here’s how world’s top 10 military spenders compare against each other:
|Country||Military Spending ('19)||YoY % change||Military Spending as % of GDP ('19)|
|Saudi Arabia 🇸🇦||$61.2B||-16.0%||8.0%|
|South Korea 🇰🇷||$43.9B||+7.5%||2.7%|
China and India, currently embroiled in a border dispute, have upped the ante for military spending in Asia. India is also involved in clashes with its neighbor Pakistan for territorial claim over Kashmir—one of the most contested borders in the world.
India’s tensions and rivalry with both Pakistan and China are among the major drivers for its increased military spending.
—Siemon T. Wezeman, SIPRI Senior Researcher
Germany leads among the top spenders in terms of highest YoY military spending increases. According to SIPRI, this is a preemptive measure in the face of perceived growing Russian threats.
These concerns may not be unfounded, considering that Russia comes in fourth for defense expenditures on the global stage—and budgets more towards military spending than any country in Europe, at 3.9% of its total GDP.
Military Spending as a Share of GDP
Looking more closely at the numbers, it’s clear that some nations place a higher value on defense than others. A country’s military expenses as a share of GDP is the most straightforward expression of this.
How do the biggest spenders change when this measure is taken into consideration?
Eight of the 15 countries with the highest military spending as a percentage of GDP are concentrated in the Middle East, with an average allocation of 4.5% of a nation’s GDP.
It’s worth noting that data is missing for various countries in the Middle East, such as Yemen, which has been mired in a civil war since 2011. While SIPRI estimates that combined military spending in the region fell by 7.5% in 2019, these significant data gaps mean that such estimates may not in fact line up with the reality.
Explore the full data set of all available countries below.
|Country||2019 Spending, US$B||2019 Share of GDP|
|Republic of Congo||$0.30||2.7%|
|Trinidad & Tobago||$0.17||0.7%|
|Papua New Guinea||$0.08||0.4%|
|Central African Republic||$0.03||1.5%|
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