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Comment by a_small_island | Hacker News Reader

>"BILL GATES, aged thirty-eight, is one of the richest men in the country—the richest in 1992, and the second richest, after the investor Warren Buffett, in 1993, with a fortune of six billion one hundred and sixty million dollars, according to Forbes. "

Very strange that only just 20-25 years ago, the richest people in the world were "only" worth <7,000,000,000

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~12 billion inflation-adjusted, but your point stands.

How do you work out 'inflation adjusted' numbers? I've always wondered.

Here's a quick overview, along with a calculator:

https://www.measuringworth.com/calculators/uscompare/

Classic approach would be:

You have an inflation rate (measured through a time series of Consumer Price Indices) for a given timeframe and an initial amount of money. Multiply it.

It's just to compare purchasing power over time.

Expanding with an example... Really you just want to use the index itself. It represents (in theory) the amount you'd pay for a basket of goods.

So say, for example, the Index was at 240 in 1992, but today that same index is 360. So for £100 of 1992 money in today's terms you'd do:

360/240 * 100 = £150

Essentially you just want the ratio of prices for the basket of goods.

That's a great example, thank you. Where do I find the index numbers you refer to? I've googled, but stats are really not my strong point.

Assuming you're in the US, you could look here: http://www.bls.gov/data/#prices

More information here (https://en.wikipedia.org/wiki/Consumer_price_index), including info about the appropriate US index to use.

The Fed provides estimates on the devaluation of the dollar over time. You'll find all sorts of other well known institutions and individuals that provide their own formulas however. The spectrum is pretty wide, from those that agree with the Fed's numbers, to people that think the Fed is intentionally significantly understating inflation.

It's actually (almost certainly for historical reasons) the U.S. Bureau of Labor Statistics (BLS) who compute inflation measures, particularly the CPI, but also PPI (consumer and producer price indices, respectively).

http://www.bls.gov/data/inflation_calculator.htm

It also probably makes sense for the Fed not to compute its own inflation index, as its mandate is to manage inflation (and unemployment). Managing a statistic you control might lead to unintended consequences.

Though it must be said that the latter are cranks who are impossible to take seriously if you look into their claims - basically an MBA who went off the rail with conspiracy theories...

Not just cranks. There are quite a lot of choices as to how you calculate a price index and politics can easily enter in to which choice is taken. I'm not so up on the US index but the UK one tends to weight everyday stuff like the price of a loaf of bread in the supermarket but try coming to London and going to a trendy restaurant and staying in a nice hotel and you'll find those have gone up well above the official rate of inflation.

For comparison: US money supply (M2) was $3400 billion in 1992 and it is $12700 billion now.

It would be more interesting to look at their wealth as a percentage of the world's wealth. We have greater output per capita (GDP) today than back then so while the nominal wealth amount may be considered low it's quite possible it was a higher percentage of the world's wealth back then than it is today.

I'm pretty sure this is not the case.

https://en.wikipedia.org/wiki/Wealth_inequality_in_the_Unite...

There don't seem to be any relevant statistics on that Wikipedia page.

Ah, wrong link, here is a bit more: https://en.wikipedia.org/wiki/Recent_Distribution_of_Wealth_...

From your link:

> 1995: top 1% control 38.5% of wealth > 2010: top 1% control 35.4% of wealth

I'm still not following your line of thought?

Look at the numbers for 1980, but you're right, it's not a good example.

My thought is that it's established that there's a percental wealth/income gap that's getting larger, not smaller. It might not be very enlightening to classify just 99% / 1% here, though.

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