Who’s richer, a person who enjoys the comfort of modern services and technologies, or the ancient kings of a millennia ago? Comparing wealth over different ages is fraught with difficulties because we have trouble comparing wealth in different societies with structurally different features.

What is wealth? The answer seems obvious. Let me start with the definition that economists who work on inequality use: It is the sum total of all assets that you own (cash, house, car, furniture, paintings, money in the bank, value of shares, bonds, etc.) plus what is called “the surrender value” of life insurance and similar plans minus the amount of your debts. In other words, wealth is the amount of money that you would get if you had to liquidate all your possessions and repay all your debts today. (The amount can clearly be negative too.)

The definition can get further complicated, as some economists insist that we should also add the capitalized value of future (certain?) streams of income. That’s problematic for a number of reasons, but be that as it may, in this post I would like to take a more historical view of wealth.

I did that in my book The Haves and the Have-nots, when I discussed who might have been the richest person in history. If you want to compare people from different epochs, you cannot just simply try to calculate their total wealth. That is impossible because of what is known as the “index number problem”: there is no way to compare the bundle of goods and services in existence, which are hugely dissimilar. If I can listen to a million songs and read all night using a very good light, and if I put a high value on that, I may be thought to be wealthier than any king who lived 1000 years ago. Tocqueville noticed that too when he wrote that ancient kings lived lives of luxury but not comfort.

This is why we should use Adam Smith’s definition of wealth: “[A person] must be rich or poor according to the quantity of labor which he can command”. This means that the extent of one’s wealth ought to be estimated within a historical context: how many thousands of hours of labor one can command if they were to use his entire wealth.

This metric, however, is easier to implement in the past than now. When, say in Roman times, countries were at approximately the same level of income, taking the richest person in Roman and Chinese empires and comparing their wealth with the subsistence income (i.e. the usual wage at the time) made sense, because that “usual wage” was the same in Rome as in China. But if you take Jeff Bezos or Bill Gates, with whose wages should you compare their wealth? The wages of American workers, or with some notional global wage rate? If the former, should not then Carlos Slim’s or Russian oligarchs’ wealth be compared to the average wage in Mexico and Russia?

This is what I did in The Haves and the Have-nots and here are the results. They are from the year 2010-11 but could be easily updated. One can see that Slim and Mikhail Khodorkovsky (a Russian super-oligarch before he was jailed by Putin) were probably the richest people in history—if their wealth is measured in terms of their county’s wages. And by the same yardstick, John D. Rockefeller in 1937 was richer than Gates in 2005.

When we make this kind of calculation, we implicitly look at billionaires’ potential domestic power—their ability to hire thousands of people. But notice that here I have moved the goalposts a bit: I am really measuring wealth in the space of potential power. Now, that power does not always require actual financial wealth. It can come from straight political power. Stalin, to take one example, could have moved much more labor with his decisions than either Khodorkovsky or Slim. The same is true for many other dictators throughout history.

This conflation between the amount of money as such and the power to order workers around leads people to believe that absolute rulers must have been extraordinarily wealthy. This view is implicitly based on the values of our own fully-commercialized contemporary societies, and where having wealth comes close to having power. With people like Donald Trump, [former Italian prime minister] Silvio Berlusconi, [former prime minister of Thailand] Thaksin Shinawatra, Michael Bloomberg, etc. it becomes even more “natural” to see wealth and power as one and the same.

Wealth also, it is thought, should include wealthy people’s ability to leave their fortune to your heirs. After all, many people justify amassing extraordinary amounts by noting their concern for family, or maybe by some philanthropic cause. But what happens when the actual private wealth is low, even if the ability to control an enormous amount of resources is huge? 

In an extreme way, this was the case with Stalin, but also with most communist leaders. Those among them who were supreme leaders in their own countries had a huge power to move resources around. They also used many resources for their own purposes; not (in the case of Stalin) in an ostentatious Czarist way, but in order to showcase their own power and the power of the state (as Vladimir Nevezhin argued very convincingly in Dining with Stalin, reviewed here). Resources were also used to pay for incredibly high-security costs, so that no one could track the movement of the supreme leader. (The same reason leads American presidents to always use two or three helicopters and not one.)  This resulted in Stalin having access to approximately twenty residences in different areas near Moscow and on the Black Sea coast. (Some of these residences were only for his own use, while others were shared with the rest of the leadership). Mao’s situation was very similar, and Tito had at least seven residences in different parts of the country.

But what neither of these dictators had was the ability to transfer such “wealth” to their offspring. Many of them did not much care about their immediate family, certainly in the case of Stalin and Tito. Mao cared just a bit more, but his son inherited little; Jiang Qing, his widow, inherited even less and died in prison. Thus, if we make a simple table (see below) of what wealth consists of, we note that in these cases it did not fulfill all the functions that we normally assign to it. The reason is that we ascribe to wealth the characteristics of our own commercialized societies. In different societies, even if they are relatively close in age and technological development to ours (like Stalin’s Soviet Union or Mao’s China), the function of wealth was different. Power was the true wealth—not the mansions that were used ex officio and that you could not bequeath to your heirs.

We thus find that comparing wealth over different ages is fraught with difficulties or rather impossible not only because we cannot assign values to the things that exist now and did not exist in the past, but also because we have trouble comparing wealth in different societies with structurally different features. We have to realize that it is okay to compare the wealth of people on the Forbes list, so long as they share similar social environment: the same ability to protect that wealth, to use it to boss people around, to bequeath it. The moment when these underlying conditions diverge, the comparison ceases to be meaningful.

Branko Milanovic is the author of Global Inequality: A New Approach for the Age of Globalization and Capitalism, Alone, both published by Harvard University Press. He is a senior scholar at the Stone Center on Socio-Economic Inequality at the Graduate Center, City University of New York. An earlier version of this post has previously appeared in Milanovic’s blog.