And it gets worse. For 1800, British per capita income is raised from around $1600 to $2100 – still below the Netherlands, now up still further at $2600, a level not reached according to Maddison until the return of rapid growth in the 1860s.
So just where would $600 in “1990 Geary-Khamis dollars” come from before the Roman Imperial economy had even necessarily peaked, let alone when Europe might be well past the imagined economic halcyon days of the early Principate? Remember we’re talking the equivalent here of four tonnes of grain net per head of population at 1990 international market prices, a level of real output not reached in current-price terms until the later Industrial Revolution in mid-nineteenth century Britain and the US.
Now it's true that G-K dollar values aren't necessarily meant to work in such terms: rather, when denominating real GDP they're intended to reflect economy-wide purchasing-power parities, but in such a way that the resulting aggregate can no longer be used to derive individual sectoral output values. This caveat applies doubly to Maddison-style extrapolation of modern-day PPP-adjusted GDP figures into the past on the basis of local GDP growth rates.
So far, so good. But the results for individual points and areas should resemble those from independent benchmark observations based on the same price level, in this case that of 1990. The problem is that they don't. Maddison’s series routinely throw up far higher past income levels and correspondingly lower growth rates than those suggested by individual point estimates based on identifiable output. Far from reducing this discrepancy, Van Zanden & Bolt’s revisions have widened it, from the first century through to the nineteenth.
So is there some realistic basis for such a gung-ho addition to Angus Maddison’s already highly generous allowance for pre-medieval Europe? Or is this just the product of some dubious approximation to commodity-price-basket-deflated putative “real wage” estimates dismissed in their earliest incarnation by Postan as ”not worth the paper they were written on”?
Well it certainly isn’t coming from four tonnes of grain-equivalent in per capita product - any grain, you name it, it just isn’t there unless the authors can identify some towering sphere of economic activity that no-one’s spotted to date - one moreover capable of tripling the estimated worth of real product relative to one calculated from identifiable outputs: it isn’t there in medieval or early-modern England or France, and there’s no indication of it anywhere else prior to modern industrialisation.
The stock answer to this is of course "services", which inevitably assume a greater value in past times when their GDP contribution is re-based on modern values: in pre-industrial societies service-sector labour is cheaper relative to other branches of the economy because wages and prices haven't been dragged up by better-paying productive mechanised industry, the growth of skilled occupations and resulting inflated living costs of labour.
So valuing past or less-developed-country GDP in modern global or developed-country terms involves a big upward adjustment in the contribution of incomes from services. The problem is that the later the price base, the greater the potential distortion between countries and earlier point estimates relative to current-price estimates. Valuing output hundreds or even thousands of years ago at 1990 prices effectively compresses the range of past incomes by revaluing services with low productivity growth as if they were returning a late twentieth-century real income.
But that's not all that’s going on here. For one thing Maddison’s 0.3% annual increase in British per capita GDP over the bustling 1820s is here flattened further into 0.2% annual growth over the whole of 1800-25. The mind boggles: can it really be possible that the world’s leading industrialising economy performed so poorly during the middle decades of its key phase of early industrialisation when material output indices suggest a rate nearer 1%? Never mind Crafts & Harley’s comparatively modest revisions, even the dour Clark would surely be dumbfounded by a finding of such sluggishness.
And a discrepancy of such magnitude inevitably impacts on earlier estimates given the way these series are cobbled together. As we’ve seen, the would-be modifiers of Maddison’s admittedly rickety historical accounts assemblage are sometimes only too keen to splice together growth projections using procedures even shakier than the often cloudy data underlying the whole exercise. Nor is it at all clear just what valuation throughout in 1990 dollars can really be expected to accomplish.
Ultimately it has to be asked whether, for all their unquestioned scholarly worth, the academics of the Maddison Project are the best people for the task, given their differing approaches to past growth. Maddison’s own results to some extent involved an uneasy compromise between time-series projections and benchmark data. To deepen the confusion risks shoehorning disparate findings into a form for which they are ill suited.
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