Average incomes of the poor now exceed those of the rich 50 years ago.

By Matt Ridley

In my book I point out that an unemployed British father of three on welfare today receives more in state support than a man on the average wage received in income in 1957. It's an eye-catching reminder of how wrong J K Galbraith was to argue that affluence in the late 1950s had already gone too far.

Now the Institute of Fiscal Studies has compiled data on average incomes in Britain since 1961, coming to the remarkable conclusion that

in real terms the bottom 25% are now considerable richer than were the top 25% in 1961.

Here's a graph, (hat tip Tim Worstall)

Of course this underestimates the increase in wealth because it does not measure the extent to which many goods and services have got cheaper during this time. Nor does it take any account of innovations: the products of Vodafone, Starbucks and Google were unobtainable at any price in 1961.