Shanghai's skyline at night. According to the GDP (PPP) map, China is the world's largest economy. But that oft-cited statistic says more about the problems of PPP as a yardstick than about the economic prominence of China per se.Credit: Adi Constantin, CC0 1.0
If you want to rank the regions and countries of the world, area and population are but crude predictors of their importance. A better yardstick is GDP, or gross domestic product, defined as the economic value produced in a given region or country over a year.
Who's hot and who's not
And these two maps are possibly the best instruments to show who's hot and who's not, economically speaking. They are in fact cartograms, meaning they abandon geographic accuracy in order to represent the values of another dataset, in this case GDP: the larger a region or country is shown relative to its actual size, the greater its GDP, and vice versa.
So far, so familiar. What's unique about these maps is how this is done. Both are composed of hexagons, exactly 1,000 each. And each of those hexagons represents 0.1 percent of global GDP. That makes it fascinatingly easy to assess and compare the economic weight of various regions and countries throughout the world.
Did we say easy? Scratch that. GDP comes in two main flavors: nominal and PPP-adjusted, with each map showing one.
Nominal GDP does not take into account differences in standard of living. It simply converts local GDP values into U.S. dollars based on foreign exchange rates. GDP adjusted for purchasing power parity (PPP) takes into account living standards. $100 buys more stuff in poor countries than it does in rich countries. If you get more bang for your buck in country A, its PPP-adjusted GDP will be relatively higher than in country B.
Nominal GDP is a good way of comparing the crude economic size of various countries and regions, while GDP (PPP) is an attempt to measure the relative living standards between countries and regions. But this is also just an approximation, since it does not measure the distribution of personal income. For that, we have the Gini index, which measures the relative (in)equality of income distribution.
In other words, PPP factors in the high cost of living in mature markets as an economic disadvantage, while giving slightly more room to low-cost economies elsewhere. Think of it as the Peters projection of GDP models.
Who's number one: the U.S. or China?
The economy of the world, divided into a thousand hexagons.Credit: BerryBlue_BlueBerry, reproduced with kind permission
The difference is important, though, since the versions produce significantly different outcomes. The most salient one: on the nominal GDP map, the United States remains the world's largest economy. But on the PPP-adjusted GDP map, China takes the top spot. However, it is wrong to assume on this basis that China is the world's biggest economy.
As this article explains in some detail, PPP-adjusted GDP is not a good yardstick for comparing the size of economies – nominal GPD is the obvious measure for that. GDP (PPP) is an attempt to compare living standards; but even in that respect, it has its limitations. For example, $100 might buy you more in country B, but you might not be able to buy the stuff you can get in country A.
Both maps, shown below, are based on data from the IMF published in the first quarter of 2021. For the sake of brevity, we will have a closer look at the nominal GDP map and leave comparisons with the PPP map to you.
For the nominal map, global GDP is just over U.S. $93.86 trillion. That means each of the hexagons represents about U.S. $93.86 billion.
The worldwide overview clearly shows which three regions are the world's economic powerhouses. Despite the rise of East Asia (265 hexagons), North America (282) is still number one, with Europe (250) placing a close third. Added up, that's just three hexagons shy of 80 percent of the world's GDP. The remaining one-fifth of the world's economy is spread — rather thinly, by necessity — across Southeast Asia & Oceania (56), South Asia (41), the Middle East (38), South America (32), Africa (27), and North & Central Asia (9).
California über alles
California's economy is bigger than that of all of South America or Africa.Credit: BerryBlue_BlueBerry, reproduced with kind permission
Thanks to the hexagons, the maps get more interesting the closer you zoom in on them.
In North America, the United States (242) overshadows Canada (20) and Mexico (13); and within the U.S., California (37) outperforms not just all other states, but also most other countries — and a few continents — worldwide. To be fair, Texas (21), New York (20), Florida (13), and Illinois (10) also do better than many individual nations.
Interestingly, states that look the same on a "regular" map are way out of each others' leagues on this one. Missouri is four hexagons but Nebraska only one. Alabama has three but Mississippi only one.
The granularity of the map goes beyond the state level, showing (in red) the economic heft of certain Metropolitan Statistical Areas (MSAs), within or across state lines. The New York City-Newark-Jersey City one is 20 hexagons, that is, 2 percent of the world's GDP. The Greater Toronto Area is five hexagons, a quarter of all of Canada. And Greater Mexico City is three hexagons. That's the same as the entire state of Oregon.
By comparison, South America (32) and Africa (27) are small fry on the GDP world map. But each little pond has its own big fish. In the former, it's Brazil (16), in particular, the state of São Paulo (5), which on its own is bigger than any other country in South America. In Africa, there is one regional leader each in the north, center, and south: Egypt (4), Nigeria (5), and South Africa (3), respectively.
Economically, Italy is bigger than Russia
Europe's "Big Five" represent three-fifths of the continent's GDP. The Asian part of the former Soviet Union is an economic afterthought.Credit: BerryBlue_BlueBerry, reproduced with kind permission
Europe is bewilderingly diverse, so it helps to focus on the "Big Five" economies: Germany (46), UK (33), France (31), Italy (22), and Spain (16). They comprise three-fifths of Europe's GDP.
Each of these five has one or more regional economic engines. In Germany, it's the state of North Rhine-Westphalia, and in France, it's Île de France (both 10). In the UK, it's obviously London (8), in Italy Lombardy (5), and in Spain, it's a photo-finish between Madrid and Catalonia (both 3).
Interesting about Europe's economies are the small countries that punch well above their geographic and/or demographic weight, such as the Netherlands (11) and Switzerland (9).
Slide across to Eastern Europe and things get pretty mono-hexagonal. Poland (7) stands out positively and Russia (18) negatively. The former superpower, spread out over two continents, has an economy smaller than Italy's. Three individual German states have a GDP larger than that of the Moscow Metropolitan Area (5), the seat and bulk of Russia's economic power.
China, the biggest fish in a big pond
Australia and South Korea's GDPs are about equal, and each is about a third of Japan's. But even put together, these three add up to barely half of China's economic weight.Credit: BerryBlue_BlueBerry, reproduced with kind permission
In the 1980s, the United States was wary of Japan's rise to global prominence. But as this map shows, that fear was misguided — or rather, slightly misdirected. It's China (177) that now dominates the region economically, putting even the land of the Rising Sun (57) in the shade. South Korea (19) and Taiwan (8) look a lot larger than on a "regular" map, but it's clear who rules the roost here.
Interestingly, China's hubs are mainly but not exclusively coastal. Yes, there's Guangdong (19), Jiangsu (18), and Shandong (13), plus a few other provinces with access to the sea. But the inland provinces of Henan (10), Sichuan (9), and Hubei (8) are economically as important as any mid-sized European country. Tibet (1) and Xinjiang (2), huge on the "regular" map, are almost invisible here.
In the ASEAN countries (36), Thailand (6), Singapore (4), and the Indonesian island of Java (7) stand out. Economically, Oceania is virtually synonymous with Australia (17) — sorry, New Zealand (3).
As for South Asia and the Middle East, India (32) is clearly the dominant player, outperforming near neighbors Bangladesh (4) and Pakistan (3), as well as more distant ones like Saudi Arabia (9), Turkey (8), and Iran (7). But that's cold comfort for a country that sees itself as a challenger to China's dominance.
The PPP-adjusted GDP world map looks slightly different from the nominal GDP one. China is the #1 country and East Asia the #1 region.Credit: BerryBlue_BlueBerry, reproduced with kind permission
Maps created by Reddit user BerryBlue_BlueBerry, reproduced with kind permission. For a closer look and for detailed rankings of the regions, check out both maps here at the MapPorn subreddit.
Strange Maps #1089
Got a strange map? Let me know at strangemaps@gmail.com.
The great Greek poet, Hesiod, wrote, "Observe due measure; moderation is best in all things." It's a wisdom that finds support across all ages, stages, and aspects of life. Drinking water is a good thing, but drinking too much is dangerous. A shot of vodka won't kill you, but a gallon probably will. Working hard is good, but burning yourself out is not. Being nice is great, but a sycophant is creepy. Moderation in all things.
But, it's not always easy to determine where that line falls, and a great example of this concerns property and wealth.
Most of us agree that owning things, or at least having the right to own things, is good. It's okay to buy a phone, to own a car, or to have your own clothes. But equally true is that most people feel uneasy about a world which has both billionaires in vast mansions as well as children dying malnourished. Greed, avarice, envy, and venality are considered vices. To be obsessively driven for material things is still, in the main, considered to be either misguided or, at its worst, utterly immoral. So, when does wealth become greed?
John Locke and the philosophy of property
Credit: Godfrey Kneller via Wikipedia / Public domain
It's hard to pinpoint exactly when humans first called a thing "mine," but the philosophy and law of property is much easier to track. One of the biggest names to consider the issue was the 17th century English philosopher John Locke.
Locke's political philosophy is famously cited as a major influence on the U.S. Declaration of Independence but also fed heavily into the French Revolution and the Great Reform movements of Britain. His work on property is perhaps one of his most important contributions.
Although subject to a fair bit of debate — what isn't in philosophy? — it's generally accepted that Locke adopted a "fair usage" view of property. He argued that one can hold any property that meets the following criteria:
- It can be used before it spoils (e.g., we don't have huge stores of food that just rots).
- It leaves "good and enough" for everyone else (e.g., one person cannot own all the land in a country).
- The property must come from your own work and effort or what he calls "mixing your labor" with that thing (e.g., if you farm a field, the field and its produce become yours).
If we were to follow these rules, it seems hard to envisage a world of greed and inequality. Everyone can have and get what they want, so long as enough is left for everyone else to get what they want, as well.
But, there's a lot of ambiguity in these rules, and money rather changes things. Money, especially modern money in the form of digital numbers on a screen, does not spoil. And, thanks to modern banking, there is no limit to the amount of money there could be — a bank can, and does, literally create money each time they give you a credit card or a loan (although, in practice, few countries allow this and place limits on money creation). So, no matter how many billions someone creates, there will always be "good and enough" money for others, too.
(Of course, in practice, constantly creating huge new pools of money will lead to hyperinflation, devaluing the money for everyone. Yet, even if we were to ban all new money creation today, a Lockean could argue that there's more than enough already for a generous distribution around the world.)
So, money changes things for Locke's account. It won't spoil and there will always be at least some money for everyone else. It's even been argued that Locke, far from advocating an equal and distributive philosophy, can easily support rampant capitalist accumulation of wealth. Locke wrote that, because of money, "Now one man could have… a disproportionate and unequal possession of the earth… and fairly possess more land than he himself can use."
It's the philosophy of greed.
Too much greed
The idea that greed is an essential part of being human (or at least an animal) goes back at least to Plato and has a rich philosophical history from there. Today, it often takes the form of evolutionary psychology or genetics, exemplified by Richard Dawkins' The Selfish Gene.
It's when we think of little else than increasing our experiences and material possessions. This is the point at which greed has come to dominate your life.
One thinker who has challenged this is Peter Singer. Singer acknowledges the fact that evolution does work on a certain competitiveness, that is, the fittest will pass on their genes. But he also believes that it's wrong to associate this wholly with greed or selfishness. Cooperation and productive relationships are just as vital to survival.
Singer argues that the desire to do good, to work hard, and to succeed are admirable parts of the human condition, but when they are taken to excess, they turn into greed. That line comes when the want of more — particularly, the desire for material wealth — becomes the sole focus of a life. It's when working late or constantly looking for that promotion is prioritized over family, friends, and common human compassion.
The fact is that, in the West, most people have enough. Even poor people generally have TVs, smartphones, and automobiles. The average person in the West lives far better than royalty did for millennia. Singer asks us to get a sense of perspective. We spend more on bottled water than some families in developing countries live off for a day. We're so fixated on our current day-to-day condition, that we lose sight of how much we really have.
Greed über alles
Singer's argument helps us identify the point at which drive and success insidiously morph into greed: It's when we are loath to spend our money and devote all of our waking lives to determinedly accumulating more and more at the expense of our relationships. It's when we think of little else than increasing our experiences and material possessions. This is the point at which greed has come to dominate your life.
But it's also when greed replaces our common sense of compassion. It's when property and wealth become virtues greater than charity, kindness, and solidarity with others. It's when dollar signs and fast cars matter more than people dying in the street. It's when getting a pay raise matters more than someone else getting fired.
Nobody likes to think of themselves as greedy, but if you examine yourself closely, you will probably find some aspects of your life that are at least tainted by greed. We should all check ourselves from time to time.
Jonny Thomson teaches philosophy in Oxford. He runs a popular Instagram account called Mini Philosophy (@philosophyminis). His first book is Mini Philosophy: A Small Book of Big Ideas.
A new study, published in March in the Journal of Urban Economics, finds that the location in which you're born is likely to correlate to the amount of money you earn as an adult. It's not magic, but rather the continuing influence of factors that resulted in your mother giving birth to you where she did in the first place. Since living in a big city can mean earning higher wages, being born in one — and growing up there — is likelier to lead to a lifelong economic advantage.
The study’s data
Image source: Sean Pavone/Shutterstock
The authors of the study, Clément Bosquet of the University of Cergy-Pontoise in France and Henry G. Overman of the London School of Economics, derived their conclusions from an analysis of highly-detailed demographic data collected for the U.K.'s British Household Panel Survey. The information it contains was sourced in 18 waves from 1991 to 2009 from interviews with everyone 16 and older residing at a specific address. Individuals who moved from these residences to other locations were also tracked. On average, participants were interviewed 7.4 times over the course of the project, and Bosquet and Overman discarded individuals not interviewed at least twice.
After factoring out data that the researchers felt would skew clear results — including periods of unemployment, study, and retirement, for example — they were left a baseline data set of 55,382 observations for 75,00 individuals. (This data set was expanded as necessary for deriving insights into certain specific demographic characteristics.)
Why this happens
Image source: Flystock/Shutterstock
Previous research has documented the reasons that residents of affluent areas in big cities wind up with higher incomes — the downside being the unfortunate fact that those who live in areas of urban poverty find it harder to climb the socioeconomic ladder.
It's believed that the advantages of living in a big city come from the greater number of benefits available, among them abundant amenities and opportunities for employment, wider educational choices, and robust social networks.
Large urban centers also perpetuate the growing gap between the well-off and everyone else in terms of potential success, especially as the U.S. population is increasingly moving into such expensive places to live. They attract more well-off residents in the first place, and it's their children who are the focus of this study. About 80 percent of children born to professionals, finds the study, are born in large urban areas. Even more significant is that urban kids are more likely to get a good education, a characteristic they share with their well-educated parents, a majority of whom favor city life.
The study asserts that nearly half of us — a whopping 43.7 percent never move out of the areas in which we're born, and indeed, the effect of birth location is strongest for these children. They benefit from urban advantages throughout their childhoods, teen years, and adulthood, and in general enjoy the increased odds for success that all big-city dwellers enjoy. People who move to big cities as adults also do better than those remaining in birthplaces having fewer economic advantages.
The perceived threat of labor-ending automation, a stratified elite class, and increasingly complex occupations have left some worried about the fate of their livelihoods and jobs. It's feared that a seemingly useless class may be the end sum of this unfettered march of technological and economic progress.
The answer to this problem, from some corners of academia and governments, has been an enthusiastic call for a basic income – also referred to as Universal Basic Income (UBI) or Guaranteed Basic Income (GBI). This solution to a potential economic catastrophe has actually been floating around for quite some time. In the 1960s, a few philosophers and economists foresaw in the tea leaves this far-off solution for a still growing problem.
Early proponents of a guaranteed income
Economist and futurist Robert Theobald first rang the alarm bells on this economic threat, which at the time didn't have a name to it. Theobald believed that the threat to the American and subsequently world economy wasn't one of scarcity but abundance. His views were in direct contrast to the traditional strain of economics worrying more about scarcity. Theobald looked at the technology of the time and realized that the promise of future development would lead to even greater automated abundance in the future.
In his essay, Free Men and Free Markets, Theobald argued that technological progress would free surplus labor and capital in such a way that it would eventually prove detrimental to the society if this excess human capital wasn't fully utilized. He predicted that the mass of wealth would be transferred largely to the rich, which would fuel dissent and resentment among the lower classes. To avoid the looming disaster, he called for a "basic living guarantee". Theobald states:
"Unemployment rates must…be expected to rise. This unemployment will be concentrated among the unskilled, the older worker and the youngster entering the labor force. Minority groups will also be hard hit. No conceivable rate of economic growth will avoid this result."
Philosopher Alan Watts, who at the time called Theobald "an avant-garde economist," took the idea one step further and tried to imagine what sort of psychological and sociological issues a basic income would rile up. Not only did he imagine what the after effects of this radical change would bring, but what kind of psychic change would be needed to also bring about a new way we think about money.
Automation and basic income
Alan Watts believed that we still place an unjustified fixation on the notion of a job or employment, which he said predates back to our pre-technological days.
"Isn't it obvious that the whole purpose of machines is to get rid of work? When you get rid of the work required for producing basic necessities, you have leisure – time for fun or new and creative explorations and adventures."
The problem is we don't see that as the case. If you follow the outcome of automation to its logical end, you'll realize that the whole purpose is to eventually eliminate any human interference in rote menial tasks. But if the casualties of this instead creates a new invalid serfdom class, our entire capitalistic structure will become severely strained.
"... we increasingly abolish human slavery; but in penalizing the displaced slaves, in depriving them of purchasing power, the manufacturers in turn deprive themselves of outlets and markets for their products," writes Watts in Does It Matter?: Essays on Man's Relation to Materiality.
Those that lose their jobs will live in a more diminished and impoverished state. All the while, there is a surplus of cheap consumer goods being created by the automated factories. On the subject of who should pay for the basic income, Watts said that the machine should – something echoed by Bill Gates in recent years, who suggested a robot tax.
Theoretical outcomes for a universal basic income
Watts was a bit premature on his basic income prediction, but the picture he paints is still one that proponents of UBI look to as the future. Watts said:
"I predict by AD 2000, or sooner, no one will pay taxes, no one will carry cash, utilities will be free, and everyone will carry a general credit card."
"This card will be valid up to each individual's share in a guaranteed basic income or national dividend, issued free, beyond which he may still earn anything more that he desires by an art or craft, profession or trade that has not been displaced by automation."
Inflation arguments abound when talking about basic income. Watts understood at the time that the way people thought about money would prove most of these arguments true.
"The difficulty is that, with our present superstitions about money, the issue of a guaranteed basic income of, say $10,000 per annum per person would result in wild inflation. Prices would go sky-high to "catch" the vast amounts of new money in circulation…"
Watts found inflation arguments to be null if people would simply realize the symbolic nature of currency instead of confusing it with true wealth.
"The hapless dollar-hypnotized sellers do not realize that whenever they raise prices, the money so gained has less and less purchasing power, which is the reason that as material wealth grows and grows, the value of the monetary unit goes down and down."
While this idea has gained both supporters and detractors in the years since, the main point still stands: Automated abundance is at risk of disrupting the status quo of the past few hundred years.
Later on in his life, Theobald looked back on the foresight he had and its unnerving validity.
"What's startling to me is that when I started talking about ideas like these 30 years ago, they were so new and strange that people looked at me as if I had two heads. In retrospect, I think I was looked on as something of a cultural clown – a "crazy" who was fun to listen to. The reaction I get now worries me a lot more, because what most people say is, "Bob, today you're right, but we're not going to do anything about it."'
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