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Even that's not right, you need to compare to per capita GDP. $350 million in 1986 is $750 million in today's dollar, but per capita GDP was just $19.1k in 198

Even that's not right, you need to compare to per capita GDP. $350 million in 1986 is $750 million in today's dollar, but per capita GDP was just $19.1k in 1986. So $750 million corresponded to 39.2k times the per capita GDP. Today per capita GDP is $54.6k, so $5 billion is 91.5k times that. Which means that the degree to which the 100th richest person is richer than the average is about 2.3x more than it was 30 years ago.

baudehlo 11y ago
Why does GDP matter if you're calculating individual wealth and thus purchasing power? (Genuine question btw - not disagreeing just interested)
- InclinedPlane 11y ago
  It's a comparison of how relatively rich people are. Adjusting for inflation ignores economic growth.
  - baudehlo 11y ago
    Still confused (I got a D in economics so help me out). Can you elaborate more?
    - InclinedPlane 11y ago
      Taking inflation into account offsets the fact that dollars in 1986 didn't have the same value as dollars today. That allows you to compare, roughly, how rich different people are in different years. So you can compare the 100th richest person in the US in 1986 to the 100th richest person in the US today in terms of what they could buy. But the interesting thing, which is how this whole sub-thread started, is asking whether or not the rich are getting much richer even beyond economic growth. So the 100th richest person in the US is richer today than the 100th richest person from 1986, but overall, on average, people in the US are richer today than folks were in 1986, so that direct comparison tells you little. So how do you account for that? The easiest way is to just compare to GDP, but you need to account for the population difference, so you can just use per capita GDP. Basically you're asking: how much is this amount of wealth relative to the average single person slice of the "economic pie" in a given year. In 1986 that figure was roughly forty thousand "pie slices" for the 100th richest person, today that figure is ninety thousand "pie slices".
dragonwriter 11y ago
GDP per capita isn't per capita wealth (or even PR capita personal income), so your conclusion doesn't follow from the statistics you offer to support it.
- InclinedPlane 11y ago
  Per capita GDP is a population scaled measurement of the size of the economy. Scaling wealth relative to that gives an indication of relative wealth, though it's by no means a perfect measure (but better than merely scaling relative to inflation).

baudehlo 11y ago

Why does GDP matter if you're calculating individual wealth and thus purchasing power? (Genuine question btw - not disagreeing just interested)

InclinedPlane 11y ago
It's a comparison of how relatively rich people are. Adjusting for inflation ignores economic growth.
- baudehlo 11y ago
  Still confused (I got a D in economics so help me out). Can you elaborate more?
  - InclinedPlane 11y ago
    Taking inflation into account offsets the fact that dollars in 1986 didn't have the same value as dollars today. That allows you to compare, roughly, how rich different people are in different years. So you can compare the 100th richest person in the US in 1986 to the 100th richest person in the US today in terms of what they could buy. But the interesting thing, which is how this whole sub-thread started, is asking whether or not the rich are getting much richer even beyond economic growth. So the 100th richest person in the US is richer today than the 100th richest person from 1986, but overall, on average, people in the US are richer today than folks were in 1986, so that direct comparison tells you little. So how do you account for that? The easiest way is to just compare to GDP, but you need to account for the population difference, so you can just use per capita GDP. Basically you're asking: how much is this amount of wealth relative to the average single person slice of the "economic pie" in a given year. In 1986 that figure was roughly forty thousand "pie slices" for the 100th richest person, today that figure is ninety thousand "pie slices".

dragonwriter 11y ago

GDP per capita isn't per capita wealth (or even PR capita personal income), so your conclusion doesn't follow from the statistics you offer to support it.

InclinedPlane 11y ago
Per capita GDP is a population scaled measurement of the size of the economy. Scaling wealth relative to that gives an indication of relative wealth, though it's by no means a perfect measure (but better than merely scaling relative to inflation).