I asked this on twitter, but no one responded. If you had to choose between two scenarios, which would you choose:

- A world population of 10 billion where 90% were not malnourished?

- A world population of 500 million were 90% were malnourished?

The first scenario has 2.2 times as many malnourished individuals as the second.

This issue of relative and absolute values matters. Most of you are likely aware of the economic literature on the “big fish small pond” vs. “small fish big pond” effect. Perceptions of poverty are to some extent standardized to local distributions.

Or consider this data on manufacturing output:

In case it isn’t clear: the first chart shows that the United States remains the absolute top ranked nation in manufacturing output. The second chart shows that the United States remains proportionally the largest producer of manufactured goods in the world.

And yet the perception is that American manufacturing is in decline. Why? Part of the issue is straightforward in that employment in American manufacturing is in decline. But I suspect another issue is that the scale and magnitude of American relative dominance is also in decline.

Finally, one thing to remember is that the USA is actually a relatively unglobalized economy for a large nation. We’ve had around 10% of goods and services be in the export sector for about a generation now. Here’s a chart which shows the trends. On the x-axis is income per capita (PPP). On the y-axis is the % of goods and services exported. The bubble size is proportional to population. The USA is at the bottom right.

Image Credit: Curious Cat Blog