Thread by @shrikanth_krish

Two days ago I did a thread on the "revised" comparative view of per-capita incomes in the new Maddison Project Database (2018)

Here's the original thread

Some qualifying remarks follow

https://twitter.com/shrikanth_krish/status/1185410654389395456

Firstly the "new methodology" MPD numbers are to be used only for cross-sectional country comparisons and not for a view of a country's growth over time

Secondly the GDP comparisons for certain country pairs can be problematic. E.g. UK and India given the vastly different consumption baskets and the use of "Grain" in the MPD to measure Indian GDP

@pseudoerasmus brought out this critique in this thread

https://twitter.com/pseudoerasmus/status/1185911495038820354

Broadberry / Bishnupriya Gupta et al had attempted to do a "correction" to the Grain GDP using cloth prices and estimated the ratio of India to UK PCI as of 1700 to be closer to 40% than 70%

The "adjustment" of course can be debated, but sharing the Broadberry paper below for those who are interested -

eh.net/eha/wp-content…

But the broad critique of the MPD numbers that I posted is -

Hey...this is based on grain alone

The consumption basket was a lot more diverse in UK relative to India in 1700

Hence the numbers overstate Indian prosperity relative to UK as of that date

But my counter to that is -

"Adjusting" for the diversity by adding cloth or maybe a few more food items is far from perfect

It brings with it its own set of problems

E.g. Cloth constituted a bigger proportion of an Englishman's consumption basket in 1700 relative to an Indian's.

But this is not a sign of greater prosperity necessarily

But dictated by different climes

It is common to see most South indian men preferring to stay topless for much of the year (as temperatures hover around 30-40 degrees celsius) for 10 out of 12 months in much of the Deccan

Northern India is not much cooler either

This is a sharp contrast to England where Cloth is a major item of consumption (particularly wool) and where temperatures barely exceed 15-20 for most of the year.

Another area where an Englishman's consumption in 1700 was likely more "diverse" than an Indian's is food

While the Indian diet is grain-heavy, an Englishman's diet includes considerable meat

Again this is not a sign of greater prosperity, as it is in part driven by the cultural opposition and aversion to meat in vast swathes of traditional India

To this day

So yes...

It is important to have a comparable consumption basket, which adequately captures economic activity of the respective lands

But this may not necessarily be reflected using food + clothing alone - on account of cultural and climactic differences

There could be other areas of "consumption" in 1700 India that may be very hard to account for using conventional metrics..

E.g. Religious Expenditure - likely very low in England but considerable in India

Forms of religious expenditure include -

1. Long trips on pilgrimages
2. Paying purOhitas (family priests) for conducting rites of passage (naming ceremony, death ceremony etc)
3. Expensive weddings
4. Donations to temples
5. Horoscope making

None of this will get captured in food / cloth expenditure in part because it is discontinuous in nature

Very hard to bake some of this into a standard consumption basket

You might argue - hey..it eventually has to find its way through spending on food/clothing

But it doesn't...

The family purohit might just hoard his surplus money earned from patrons at home (quite literally under the mattress)

Or just save it up for daughter's wedding