The modern world

The ongoing debate about Tyler Cowen’s stagnation thesis has gotten me thinking about what’s really at stake.  Here’s a few highly subjective thoughts:

Part 1  The Great Inflation:

I don’t mean price inflation, I mean inflation in the sense used by physicists explaining the early expansion of the universe.  In my admittedly subjective take on ordinary human life since 1500 BC, I see two periods (before and after), separated by one explosion of change; 1900-1960s.  In 1900 my grandmother (then 10 years old) lived in a little town in Wisconsin, without running water and indoor plumbing, without any sort of “health care” capable of doing more good than harm, without lights, phones, TVs, radio, cars, home appliances, central heating, etc.  Isn’t that pretty much how the Romans lived in 200 AD?  Yes, the outside world had trains and telegraphs and elevators by 1900, but I’m talking about daily life for the average person.  A Roman visiting her would have been surprised by some gadgets around the house, but not awestruck.  Go back another 1700 years to 1500 BC, and the Minoans had running water in their houses.  They would have been disgusted at how my grandmother’s generation had regressed in plumbing technology.

If at age 10 I could have been magically transported from the 1960s to 2011, I would have been very impressed by the internet.  But I might have also asked “Dude, where’s my flying car?“  I might have been surprised that people still flew in Boeing 7X7s that go about 575 miles an hour.  Where are those super-sonic jets?  I would have noticed changes, but nothing (except maybe the internet) would have blown me away.

In contrast a Roman or Minoan citizen would have been awestruck by the 1960s.  An average working man can blast down the highway at 80 mph?  You can watch TV shows?  Even electric lights (which modern people wrongly take for granted) would have astounded the ancients.  People have no idea what life was like when one’s entire world was quite dark and cold for 16 hours of the day.  Travelling alone at nighttime was frightening.  And here’s my claim, I think my grandmother would have been almost equally stupefied.  I wish I’d asked her, she died the month they landed on the moon.

Even in health care the big explosion was 1900 to the 1960s, when life expectancy rose from 47 (only modestly above Roman levels), to about 70 (only modestly below current levels.)  If you want to bring in the “big picture” and talk about how trains and the telegraph would have amazed the Romans, well then how about jumbo jets, rockets to the moon, nuclear power plants and nuclear bombs?  Ancient scientists might have been able to wrap their heads around Newtonian physics.  But general relativity and quantum mechanics?

Part 2:  I’ll take 1973

I’ve noticed that younger commenters like Morgan look back at the 1960s like I look back at the Dark Ages.  No high-speed internet connections!?!?!?  Here’s a challenge offered by Bryan Caplan, who’s also much younger than me:

Even stranger: I learned this thought experiment over a decade ago from none other than Tyler Cowen himself!  I think he called it the “deflationary century.”  His point: Most of us would rather have $1000 nominal dollars to spend on year 2000 goods than $1000 nominal dollars to spend on year 1900 goods. . . .

Of course, Tyler might say that his thought experiment works for 1900 versus 2000, but not 1973 versus 2010.  But none too convincingly. 

None too convincingly?  I’m totally convinced.  I’d take 2011 over 1900 at the same nominal income, but I’d take 1973 over today in a heartbeat.  I’d cash out my high six figure Newton home and see what was available in the Hollywood hills for that price in 1973.  I’d take my low six figure income and live the life of a wealthy person in 1973.  Sure, I’d miss the internet.  But let’s face it, the internet is a sort of drug.  Unless you are Tyler Cowen, it crowds out more authentic pleasures like books, films, music, and jet travel to exotic spots (without T&A frisking at airports), all easily done in 1973 on the sort of nominal income that now makes me merely another faceless upper-middle class professional in today’s Boston metro area.

Yes, life expectancy was lower in 1973, but some of that was smoking, and I don’t smoke.  So where do I sign up for the time machine?

David Henderson points out that part of Tyler’s problem was that he titled his book “The Great Stagnation” which implies no progress.  In my previous post I agreed with Tyler’s view that progress slowed sharply after 1973.  But I see this as a return to normalcy.  Progress is still occurring, and compared to most periods of human history it is occurring at a rapid rate.  The real outlier was my grandma’s life.  That took us from an ordinary daily life not all that different from that of the ancient Romans, to a world (in the 1960s) not all that different from 2011.  Or at least that’s the highly subjective take of a grouchy, reactionary 55 year old.  But I suppose everyone thinks their youth was some sort of Golden Age.

Back in the 1960s people talked about “modern life” and “the modern world” as opposed to the old ways.  For me, the 1960s will always be the modern world.  And I don’t think I am the only one.  New York’s MOMA is full of art from the 1950s and the 1960s.

PS.  I don’t want any annoying historians lecturing me that America in 1900 was richer than Rome circa 200.  I know that.  Brad DeLong has a new post citing a study that says ancient Romans were at roughly the economic level of Vienna and Florence in 1875.  I don’t think they were even that high.  Sometimes I exaggerate for effect.


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97 Responses to “The modern world”

  1. Gravatar of Ram Ram
    6. February 2011 at 06:40

    Here’s a question I have: if technological progress fueled the rapid increase in living standards between 1900-1973, but now we’ve reached a “technological plataeu” such that we continue to see rising living standards, but at a much slower pace, shouldn’t that make policy that much more important in the current period than in the past? After all, if the potential of the economy is skyrocketing, tinkering with top marginal tax rates is going to be less noticeable, whereas it should be quite noticeable in a more sluggish phase such as the period between 1973-2011. And yet, in that period, real growth oscillated with a very, very low amplitude about 3% per year. So, whether we were pursuing the set of policies under Carter, Reagan I, Reagan II, Bush Sr., Clinton I, Clinton II, Bush Jr. I, Bush Jr. II, etc., we grew at almost exactly the same pace the entire time. And at the time there were right-wing economists decrying seemingly left-wing policies, and left-wing economists decrying seemingly right-wing policies, for their growth-halting effects. Of course, we don’t have the counterfactual to consider (maybe the economy would have died a slow death but for Reagan’s courageous neoliberalism, maybe the internet boom needed a solvent government under Clinton to get under way, etc.) but if you don’t come to the conversation with any political baggage, you see nearly constant 3% real growth and you say, I guess policy (within the spectrum actually pursued in the US) doesn’t matter that much for real growth. Especially in the 1973-2011 period, when as Tyler might say, we couldn’t count on technology to make bad policy irrelevant. What gives?

  2. Gravatar of Morgan Warstler Morgan Warstler
    6. February 2011 at 06:58

    But I might have also asked “Dude, where’s my flying car?“

    Yeah, this is only indicative of how stupid people were back then. 15 pts. in IQ. Fools. Racists and homophobes.

    That you think a flying car is better than the Internet, is ridiculous. This is the problem, imagine 30 years from now – when another Tyler writes about the Great Stagnation:

    1. 40 years ago, we had 3x as many public employees. They got paid MORE than folks int he private sector.
    2. We still used soldiers to kill enemies.
    3. We PRINTED money as if the government had a right to do it. We carried cash.
    4. We waited for drugs to be tested, rather than letting the bio-reports of “willing guinea pigs” were broadcast live.
    5. We worried about the Chinese stealing our factory jobs.
    6. We operated without instantaneousness data for almost every decision we make as individuals.
    7. We worried about people knowing our dirty secrets – now we either don’t have any (modified behavior) or everyone does it.

    And even then, you are saying, “dude where’s my flying car?”

    You are so focused on the atomic, you refuse to properly weight the digital. Network effects and “free” really screw up your NGDP equation. Embrace it.

    —-

    “I’d cash out my high six figure Newton home and see what was available in the Hollywood hills for that price in 1973. I’d take my low six figure income and live the life of a wealthy person in 1973. Sure, I’d miss the internet. But let’s face it, the internet is a sort of drug.”

    Impossible. See Scott, what you long for isn’t $1000 in 1973, you want either 100M dead people, not competing for your home, OR LA to be three times the size…. three times farther away from the ocean…. move to the Inland Empire – have a ball!

    In 1973, my cell phone bill would run through $1000 in a year.

    Oh wait, no cell phone, ok my tethered to the wall Ma Bell bill would run through $1000 in a year.

    Oh ok, I won’t do business in India or China.

    In 1973, my music collection would cost $3000 a year.

    What EXACTLY do I get? A bigger house? Extra cars?

    I’m seriously stumped.

  3. Gravatar of Morgan Warstler Morgan Warstler
    6. February 2011 at 07:08

    Scratch that, my Ma Bell bill would be $2K a month.

    My yearly subscription to every printed magazine and newspaper in the world would run what? $200K a year?

    —-

    Scott, the only thing I can think of is that you REALLY want servants and to attend VIP events.

    I can’t think of much more, and those just don’t seem like the right kind of values for someone who wants to run my economy.

  4. Gravatar of Morgan Warstler Morgan Warstler
    6. February 2011 at 07:11

    One final thing, I’ve lived in the Hollywood Hills – and it is definitely a drug.

  5. Gravatar of OGT OGT
    6. February 2011 at 07:14

    On the downside are telecommunications, automobiles, appliances, and air travel, all of which have trended up less than inflation and so would be relatively more dear as well being much less good. Otherwise it seems like a pretty good deal, I’d be giving my daughter almost precisely my life in terms of technological development and cultural experiences, but with more money.

    On the other hand are you thinking pre-tax or post-tax income in your thought experiment?

  6. Gravatar of Scott Sumner Scott Sumner
    6. February 2011 at 07:43

    Ram, You said;

    “And yet, in that period, real growth oscillated with a very, very low amplitude about 3% per year. So, whether we were pursuing the set of policies under Carter, Reagan I, Reagan II, Bush Sr., Clinton I, Clinton II, Bush Jr. I, Bush Jr. II, etc., we grew at almost exactly the same pace the entire time. And at the time there were right-wing economists decrying seemingly left-wing policies, and left-wing economists decrying seemingly right-wing policies, for their growth-halting effects. Of course, we don’t have the counterfactual to consider (maybe the economy would have died a slow death but for Reagan’s courageous neoliberalism,”

    No offense, but this is sloppy reasoning for three different reasons:

    1. The neoliberal reforms were spread over all the administrations: Carter did deregulation. Reagan cut the high MTRs, Bush I did NAFTA. Clinton reduced the size of government, expanded NAFTA, dramatically reduced welfare rolls through reforms, and cut the cap gains rate to 20%. Bush II did a few more tax cuts. Why should the growth rate vary by administration? And if it did, wouldn’t Clinton be highest?

    2. Individual reforms are often too small to show up in macro data. Furthermore, some types of changes in efficiency (MTRs) may take awhile to show up in GDP, which is why you don’t want to do time series analysis, you want cross-sectional analysis.

    3. The post below shows that if you do cross sectional analysis, neoliberal reforms were a major factor explaining relative economic performance during the last 30 years.

    http://www.themoneyillusion.com/?p=5164

    I do agree with you on one point, supply-siders often have very weak arguments.

    Morgan, That nirvana you describe only happens if they make you dictator. You said;

    “In 1973, my music collection would cost $3000 a year.”

    In 1973 I put together a great rock music collection for about $300, about $3 an album. Who has time to listen to more? I suppose you are going to tell me that rock music today is better than 1965-73.

    I don’t own a cell phone, so it would not be missed.

    OGT, You said;

    “On the downside are telecommunications, automobiles, appliances, and air travel, all of which have trended up less than inflation and so would be relatively more dear as well being much less good.”

    I’m pretty sure that in 1973 the $17,000 I spent on my Nissan would have bought me a top of the line luxury car–maybe a 700 series BMW.

    Pre or post tax, my nominal income today would make me rich in 1973.

  7. Gravatar of mbk mbk
    6. February 2011 at 08:05

    Scott I’m much with you. It’s funny how people value free entertainment through youtube over antibiotics and safe piped drinking water. Not to mention that the free networked content of the internet is often quantity over quality, and that the better long distance communication it affords just masks the really low quality direct social interaction in much of the industrialized world. Once again: in my life I was at my most content in situations where I interacted with a fairly low number of people in a fairly isolated social situation (on board ships, as a grad student at a station that was somehow off the beaten track etc). If this is not happening, then yes the internet is a great Ersatz. But it’s still an Ersatz social network, not a real one.

    But there is another aspect to this. Getting caught up in all this “We”s, in “our” 60s, 70s etc (I am a child of the 60s so for me the golden age must be the 70s) “we” forget that a lot of people in this world, about 80% of them, now may have better access to the addicting effects of cell phones and the internet, and yet, still don’t have safe piped water or antibiotics. Just to have all of these people catch up with the West’s 1960s standards is pretty much impossible. It will have to be a cheaper and lighter version of it, yes with antibiotics and food and safe drinking water but no one will ever again get glorious 4000 lbs big block V8s into every household, not the West, nor anyone else.

    These very special 1960s were possible in the US only: lots of space, lots of resources, no one else in the world using them. The rest of the world btw did catch up a lot since the 1960s – I would not want to drive a 1960′s average German or French car, though you might easily sell me on a Lincoln Continental from that era. Ah ok I’d take a 2CV for fun but for daily commute, no thanks. Anyhow my point was, it wasn’t THE 60s, it was the US 60s, and the US must relatively stagnate so the other 80% can catch up. Like Japan now stagnates so the rest of the world catches up – they went just a bit too far ahead late 80s.

  8. Gravatar of Russ Anderson Russ Anderson
    6. February 2011 at 08:09

    Scott wrote: “I would have noticed changes {since the 1960′s], but nothing (except maybe the internet) would have blown me away.”

    Really? How about cell phones? MP3 players? DVDs? Cars that don’t suck? (my first car was a 1974 Chevy Vega). We have a running joke in our family, started by my daughter, about how primitive life looks in movies from the 1970′s, 80′s and 90′s. “Dad, that cell phone is the size of a shoe box!!!” Watch an episode of the original Star Trek and see how primitive the future looks. Tapes? Space ships using tapes?

    I earned a computer science degree in the mid 1980′s. My first computer classes were Fortran IV and COBOL on punch cards. Punch cards! When I graduated not only was there no (publicly available) Internet, there were no PCs (we did get an Apple II my Sr year, but it was mainly a toy), no Microsoft, no “mouse”, no GUIs (Window based graphics). Other than general Babbage computer concepts, pretty much _everything_ in computer science is different. It would be like getting a medical degree before antibiotics (think Civil War era “doctors”).

    Other than antibiotics, medicine was still primitive in the 1960′s. Hospitals were still, for the most part, a place people went to die. Look at sports medicine. Gale Sayers and Tony Oliva’s careers ended prematurely due to knee injuries that would easily be repaired today. “Tommy John” surgery was an experiment in 1973 (on the real Tommy John). Now it is so commonplace and successful that healthy young pitchers are asking to have the procedure to make their arm stronger. You may not find the 5 year cancer survival rate increasing from 49% to 66% significant, but I do (as someone that knows several cancer survivors that would not have survived 20 years ago).

    Pretty much anything with electronics is light year better than it was in the 1960′s. It’s not just the Internet but a revolution in communication technologies. A decade ago my minister lamented how people in the suburbs don’t know their neighbors like they did years ago. After the service I pointed out that due to improvements in communication, now when people move they do not have to lose contact with the people they left. The reason people don’t know their new neighbors as well is because they are not forced to lose contact with their old neighbors (and family). I asked him if that was a bad thing. “I never thought of it that way before” was his response. Due to social media I have reconnected with a number of friends that I’d lost track of years ago. With texting, kids are inconstant contact with friends and family.

    Sure, we don’t have flying cars and a colony on the moon, and there are certainly areas that should have had more improvement (such as ending our addiction to foreign oil and internal combustion transportation), but don’t underestimate the improvements in other areas. I’m old enough to remember 1973 and understand the “good old days” sentimentality, but there is absolutely no way I would ever want to go and live in that era.

  9. Gravatar of mbk mbk
    6. February 2011 at 08:10

    Scott, dramatical case in point since you mentioned it, in 1973 BMW just barely made the 2002, their first “real” car after motorcycles and covered Vespa-like tricycles. No 700 series. No 500 series. The US had what no one else had. Now it’s (almost) ordinary.

  10. Gravatar of Mark A. Sadowski Mark A. Sadowski
    6. February 2011 at 08:18

    Scott wrote:
    “I’ve noticed that younger commenters like Morgan look back at the 1960s like I look back at the Dark Ages.”

    I’m a little younger than you Scott but I’ve noticed the exact same thing. And whereas Morgan would probably probably kill himself rather than live without a wireless network I would probably be pretty happy in 1973 because of the cars. (And you did mention the flying cars.)

    I came across this in Yahoo Answers recently:

    “What are some differences with cars from the 1960′s to todays cars?”

    The most popular answer had some things right but it also said the following:

    “Modern cars have more “luxury” features than the older cars, cruise control, climate control, power windows, stereos etc also modern cars are actually cheaper than cars from the 60′s (compare the cost of a car in the 60′s to the national average wage at the time, and then do the same for today)”

    Gee, they must really think it was the Dark Ages! True, not all cars had such features back then but they actually were quite common. My 1974 Buick Estate has all of those features for example.

    But the part about the cost of cars is a huge missconception (and this relates to the Great Inflation). It’s the consequence of looking at price trends over the past 15 years and assuming things have always been that way.

    The purchase of an average-priced new vehicle took 22.1 weeks of median family income in the second quarter 2009, according to Comerica Bank’s Auto Affordability Index (AAI). (The average price of a light vehicle purchased in the second quarter was $26,300.) The Comerica AAI shows a steady fall in the decrease in the number of weeks of median income from about 30.5 in 1995. So cars have never been more affordable, right? Em, no. Believe it or not time extends back beyond 1995.

    I once researched car affordability and two decades really stood out in that regard; the 1920s and the 1970s. In 1973, for example, median family income (in nominal dollars) was $12,051 (median family income data is available from the Census as far back as 1947). The average price of a new car was $4052 (U.S. Department of Energy has data on that as far back as 1970), or about the price of a Chevrolet Caprice. Thus it took 17.5 weeks of gross income to buy a new car. In 1926 I estimate that median family income was about $1500. And I estimate a new car averaged about $500, or about the price of a Chevrolet Superior. Thus it took 17.3 weeks of gross income to buy a new car.

    So no, it’s definitely not true that cars have never been more affordable. The average car price went up sharply relative to other goods in the 1980s as real median family income stagnated in real terms. It will take some income growth or a reduction in average new car price before they can be as affordable as they were in the 1920s and 1970s.

    P.S. On the other hand you could get a Model T Ford for $265 in 1926 and a Chevrolet Vega for $2087 in 1973 (although I would have rather spent $2150 for a Honda Civic). Today a 2009 Nissan Versa could have been had for $10,685 (no AC of course). Do the math and you’ll see that they all cost almost exactly 9 weeks worth of gross income. So even looking only at the most affordable cars nothing has changed at all by this standard in over 80 years.

  11. Gravatar of Morgan Warstler Morgan Warstler
    6. February 2011 at 08:18

    “I don’t own a cell phone, so it would not be missed.”

    “Who has time to listen to more?”

    Proving my point – you are not meant to be anywhere near making decisions about Economics for other people, your own internal metrics are terribly shitty. (Scott, PEE).

    UNLIMITED music means you choose whatever you like as you bounce through youtube, pandora, napster, etc. by the time you are 6, there’s almost no chance of you missing anything anywhere, like a plant in a far more advanced hydroponic space, your roots grow unhindered, you are more fruitful and potent.

    If art means anything, it means that Scott’s music collection in 1973 was the product of a far more limited scope, a far more ignorant set of choices – and as such, you LOGICALLY should be more wiling to realize that what you LIKE now is defective, it is lesser, by comparison.

    It is suspect, because it wasn’t worldly. Your neural network of tastes and talents was 90% hardwired by the time you were 11, and grew only another 10% by the time you turned 30.

    This should be getting through to you, you are a seemingly logical human being.

    1973 as a “small town” society. It was caveman time.

  12. Gravatar of Morgan Warstler Morgan Warstler
    6. February 2011 at 08:30

    I think between you and MBK, I’m thinking perhaps this corrupts your other work deeply and unalterably. Did Milton Friedman make such assumptions about the glories of his own youth?

    How can a man without a cell phone be listened to about any equation that vitally requires assumptions on productivity gains?

    It’s like a virgin giving safe sex advice in discussion of global population and world happiness. We call that religion.

  13. Gravatar of OGT OGT
    6. February 2011 at 08:31

    Yet a luxury BMW in 1973 would in most aspects be inferior to a 2011 Sentra. (Safety, leg room, reliability, stereo, AC, power features). The acceleration of a 1973 BMW 2002 turbo is similar to a modern economy car (though acceleration is surely a positional good).

  14. Gravatar of mbk mbk
    6. February 2011 at 08:39

    Mark, cars are a good example of why there is this sharp slowdown of improvement *in the US*: it truly is an example of low hanging fruit. Up to the 70s in the US, oil, steel, metropolitan space, air, all were aplenty and could be taken raw. The more people started to have these goodies, within the US and worldwide, the more everyone, the US too, had to move to recycled steel (car body quality went down), harder to get oil, including wars, recycled space, limits on highway construction, clean air standards, and the like. New construction with cheap resources is always cheaper than renovation and recycling – that’s why Europe always was more expensive to get anything done that the US, because it wasn’t empty frontier in the last 10000 years. But the US is getting there asymptotically, of course. The result is that yes, with some reservations, I don’t buy all of your points, the auto industry e.g. barely maintained its quality in the last 30 years *in the US* (after an intitial dip downwards). It’s because the 60s had it easy, up til then it was the time of the low hanging fruit.

    Morgan, sometimes you sound like a single issue fanatic. And I find much mp3 quality acoustically appalling. I listen to it because there’s not much other choice left, I live in a country where I don’t have access to a lot of the downloadable goods you mention because the US can’t make up its mind to sell them to the rest of the world, and the CD stores are getting worse and worse. And: what’s wrong with actual social contacts? Instead of virtual ones? What’s so great with a world where everything is a simulation?

  15. Gravatar of Russ Anderson Russ Anderson
    6. February 2011 at 08:41

    One more thing. Back in the early 1980′s the main source of economic information was the quarterly Federal Reserve Bulletin. I remember going to the library and copying by hand columns of economic statistics (money supply, U-rate, federal spending totals, etc) and calculating by hand (pen on paper, no calculator) the various totals, growth rates (etc). Due to the bulletin coming out quarterly and lags in printing, the most recent information was about 6 months old. Last Friday I went to bls.gov at 8:35AM (eastern) and downloaded the employment report. The lag between the report being released and my reading it was a few minutes.

    In the early 80′s have access to FRED data would have been nirvana. Having instant access to all that data, being able to generate charts, being able to easily compare various economic statistics was simply beyond comprehension.

    Likewise being able to read real-time the economic thought of the great economic mind of the day and being able to INTERACT with them. What is the dollar value of being able to interact with the great Scott Sumner? I say priceless!

  16. Gravatar of Thomas Thomas
    6. February 2011 at 08:47

    OGT, I can assure you (and Robert Frank for that matter) that acceleration is not purely a positional good.

    Scott doesn’t have a cell phone? Wow. Well, I guess it’s entirely possible that he’d choose 1973 over today. Idiosyncratic preferences.

    Scott, I don’t think it’s fair to think that you get to take back the asset appreciation you’ve enjoyed. If you’d bought a home in 1973, and wanted to go back to 1973 with the gains, you’d seen that you couldn’t. I’m guess that your high six figure home value isn’t something easily afforded on your 1973 nominal income. You’d have to put down 20% as well. Scale back your aspirations a bit.

  17. Gravatar of Mark A. Sadowski Mark A. Sadowski
    6. February 2011 at 09:02

    mbk wrote:
    “I don’t buy all of your points”

    I buy all of yours. Great comments.

  18. Gravatar of Jon Jon
    6. February 2011 at 09:03

    Scott: Tyler’s title is provocative; its provocative because its a veiled reference to a political mantra of the Progressives who otherwise argue that we need radically different government policies because market-reforms since the early 70s have given the working man no gains in real income and lowered his relative status tremendously.

    If Tyler is surprised by the reaction to his choice of framing, he is naive, but more likely he was pandering for social status among the progressive elite. That this induced resentment and sputtering outrage from his erstwhile allies is because he stabbed them in the back on the substantive points to climb the social ladder.

    Implicitly Tyler is seen as embracing the progressive position, and therefore he is guilty of Post hoc ergo propter hoc fallacy. Growth slowed, therefore we shouldn’t have pursued the market reforms is an unsubstantiated conclusion.

    The preferred framework is: growth is going fast compared to what would have happened. America did not get sick [from the free market], it got better–Tyler’s subtitle leaves little wiggle room for him to escape judgment here.

  19. Gravatar of Brian Brian
    6. February 2011 at 09:27

    What you do here every day is way cooler than reading books in a 1973 Hollywood mansion. You can argue with a half dozen great economists scattered across the world every day (and hundreds of mediocre ones). How much more successful must this site be to make it so you’re at least a little reluctant to abandon it and hop in your time machine? Do you require an email that reads:

    Scott,

    Love your ideas, but the Board of Governors has me by the balls.

    Faithfully yours,
    Ben

    I’m the opposite of you. I’m in my twenties and I get a twinge of jealousy whenever I see my friends’ small children. To think of all the cool things that will be a part of their life that I’ll only see in my old age. Those lucky little bastards. I expect my envy for my grandchildren will be tenfold greater. I hope I never reach an age where I want to go back, not forward.

  20. Gravatar of W. Peden W. Peden
    6. February 2011 at 09:32

    I wonder if 1973-2011 has been more impressive for people from Britain-

    (1) Urban water networks in places like London which aren’t terrible.

    (2) Well-heated classrooms.

    (3) VASTLY more access to higher education.

    (4) Far more social mobility. Working-class millionares like Alan Sugar were a shock in the 1980s.

    (5) No more exchange crises.

    (6) The ability to take as much money as you like on holiday, without having to break the law.

    (7) A country in which 4% RPI inflation is considered high.

    (8) Much, much better cars.

    (9) The ability to travel and work in countries from Portugal to Finland and from Greece to France.

    (10) A greater quantity and quality of television programming. 1970s British TV was relentlessly unchallenging, with very few exceptions. Far more imports from abroad.

    (11) No VHS, DVD etc. If you wanted to watch a film from 1963, you had to either hunt down a cinema that was showing it or wait for a re-release. Recording TV was unheard-of.

    (12) The IRA are gone. They were far more pervasive and relentless than British Islamic terrorism. Northern Ireland had lost its democracy in 1972 as a result of the Troubles.

    (13) Strikes. Strikes strikes strikes strikes.

    (14) Power cuts. Even within my lifetime, I remember lots of power cuts in the early 1990s and lots of games of Monopoly in candle-light. For the last three months, we’ve had worse weather than ever before in my lifetime and not a single power-cut.

    (15) Far, far better medical treatment. Cancer is no longer a death sentence. My gran, had she been just a few years younger, would have never had her hands seize up in her old age.

    (16) Much more respect for history in planning and architecture. Had we not had an economic crisis in the 1970s, most of Britain’s cities would have become concrete jungles. For example, Edinburgh University has loads of buildings that were nearly replaced by crumbling skyscrapers like the infamous post-apocalyptic Appleton Tower.

    (17) No lead piping. No asbestos all over the place.

    (18) The death of the private rental sector in the UK has been delayed, at least, by the abolition of rent control in the late 1980s.

    (19) Many foods (like salmon) which were once luxuries for the rich are now commonplace.

    (20) No more corporatist talk about the country’s economy being planned by the CBI, TUC and NEB. (Though anti-democratic corporatism is as popular amongst the British political classes as it was in the 1970s: see de facto ex-Prime Minister Peter Mandelson’s comments on a “post-democratic society”. Peter Mandelson was also the closest thing that Britain has had to a non-elected Prime Minister since Lord Salisbury in the turn of the 20th century.)

    (21) Holding shares, owning homes and getting a job in the City are no longer just what the established classes do.

    However, just like anywhere else, I think there’s very little appreciation of the progress we’ve had. It seems to be the modern way to take progress for granted and to concentrate on the negatives, which can make for a good degree of ambition but also means that we tend to lose perspective and take progress for granted.

  21. Gravatar of W. Peden W. Peden
    6. February 2011 at 09:33

    Also, a much, MUCH better phone system, even if one only looks at landlines.

  22. Gravatar of Jason Jason
    6. February 2011 at 10:35

    I think there are a lot of invisible technology advances. My dad started working for an oil company in the 80s; the way his job is done has been revolutionized. That has trickled down into cheaper oil. In chemistry we can synthesize almost anything we want to below the level of biological molecules. Carbon nanotube pants. Antibiotic walls.

    And the computer is a much bigger advance than I think you give credit for. Integrals that would have taken hours or days to compute now take seconds — that is part of the reason for why stuff doesn’t break as much as it used to mentioned above. (Yglesias makes a good point about how the printing press was a major advance but doesn’t show up in economic data).

    Transportation networks that would have lost tons of money without computers solving traveling salesman problems via brute force.

    Also, your grandma probably did have some things that would have impressed the Romans : canning, mass produced textiles (someone wrote an article out there about the $3000 shirt). Cheap colors. Real aspirin. Whiskey. Soda. Her pantry would have looked totally alien. Ice from New England (!) due in part to faster ships. In an ice box that could have kept it from melting. “Rock” oil. (aka. Oil) Meat for dinner more than once a month (also mass production). In town, gas lighting. Credit? Stocks and shares that made much of what she bought far cheaper. The ability for the common folk to keep time without a sundial. The aforementioned books. Paper money. Cheap paper. Horse collar. Horseshoe. Even if she didn’t have a tractor her plow would have been a major improvement. All of this did a lot to improve welfare (much went into population increases though not longevity since it didn’t attack disease — in a sense your grandma didn’t live longer because of pre 1900 technology, but she might not have existed without it).

    Again, I think the stuff that really changes our lives can be kind of invisible — partially because these things become so integral.

  23. Gravatar of Morgan Warstler Morgan Warstler
    6. February 2011 at 11:30

    mbk, to find your faulty logic, we just have to play the record backwards:

    “what’s wrong with actual social contacts? Instead of virtual ones? What’s so great with a world where everything is a simulation?”

    “I live in a country where I don’t have access to a lot of the downloadable goods you mention because the US can’t make up its mind to sell them to the rest of the world, and the CD stores are getting worse and worse.”

    mbk, just ASK FOR HELP, don’t build a life philosophy out of powerlessness.

    ——

    you want 320kbps or just FLAC files – go here:

    http://www.utorrent.com/

    download, install, then go here

    http://thepiratebay.org/music

    On any search, sort by SE (seeders) or LE (leechers0 – higher numbers are faster.

    Whatever you want, just ask.

    —-

    WHICH LEADS to a very important point…

    We are finally in an age where by the time you are 50 you are truly OUTDATED, and it heads lower.

    Where the intergenerational power relationship changes much more quickly, the children are NEEDED to explain the world their parents.

    We saw this pre-digital revolution, with first generation immigrant parents here in the US, unable to speak English fluently, they depended far more on their children for an explanation of wtf was going on. Many of those children – to me – were almost like the boss of the house, no matter what the tiger lady says.

    Brian, is of course right, the future is so bright for these kids, they gotta wear shades.

    And Scott, I still want an official answer to:

    1. toilet
    2. Internet

  24. Gravatar of Nick Rowe Nick Rowe
    6. February 2011 at 11:58

    Thank God! Someone else who refuses to buy a cellphone!

    The nearest to a 7-series BMW in 1973 was probably a Mercedes Benz. But I still think my 2000 Mazda 626 is a better car than my Mother’s 1969? Mercedes Benz 250. Faster, safer, and more reliable.

  25. Gravatar of Mark A. Sadowski Mark A. Sadowski
    6. February 2011 at 12:10

    Nick,
    I don’t have one either. I gave it up and I’m so much happier for it.

    As for 1950s, 1960s and (some) 1970s cars take it from me: Vroom, Vroom!

  26. Gravatar of Scott Sumner Scott Sumner
    6. February 2011 at 13:18

    mbk, I agree.

    Russ, You said;

    “Really? How about cell phones? MP3 players? DVDs?”

    There is no way I’ll ever be able to convince you. If I thought those things were great I’d have them. I much prefer to watch movies at the theater than on a dvd, and so I rarely watch a dvd. I don’t own a cell phone or MP3, so they obviously don’t impress me. They’re just fancier walkie talkies. (That softball’s for you Morgan.) I’d guess the sound quality on my 1973 stereo was far higher than an MP3 player.

    I guess younger people just don’t see things that way, but for the life of me I don’t know why not.

    To me going from a Vega to a Nissan is utterly trivial compared to going from a horse to a Vega. In the 1970s I took my old Chevy Nova from Wisconsin to Yucatan and back–6500 miles over awful roads. Total repairs on the trip—$7. That was the cost of two separate repairs.

    Health care has improved, but not nearly as much as from 1900 to the 60s.

    Mark, I recall in the 60s a VW Beetle was just under $2000, and a Caddy was about 5k.

    Morgan, You said;

    “If art means anything, it means that Scott’s music collection in 1973 was the product of a far more limited scope,”

    Not really, there have always been critics around who will dig up the good stuff, and point you in that direction.

    You said;

    “1973 as a “small town” society”

    Just the opposite, never before and never again will people have as much anonymity as in 1973. Big Brother is getting worse everyday.

    You said;

    “How can a man without a cell phone be listened to about any equation that vitally requires assumptions on productivity gains?”

    I also went 10 years in my 40s without a bank account, teaching money and banking the whole time.

    OGT, OK, but a 1973 Charger or Vette had plenty of acceleration.

    Russ, You said;

    “What is the dollar value of being able to interact with the great Scott Sumner? I say priceless!”

    The first thing we agree on. Seriously, the data is much more accessible, but interestingly the data in the 1930s was in some ways more accurate–but only because it’s much easier to measure output and prices in a commodity-oriented economy than a service-oriented economy.

    Thomas, I did put down 20%, but I had a co-investor who I later bought out (I live in a 2 family home, basically an apartment to you people outside the Northeast.)

    Regarding my preferences, yes they are a bit strange. But I think many people don’t realize how well someone could live with a low six figure income in 1973.

    Jon, You said;

    “Scott: Tyler’s title is provocative; its provocative because its a veiled reference to a political mantra of the Progressives who otherwise argue that we need radically different government policies because market-reforms since the early 70s have given the working man no gains in real income and lowered his relative status tremendously.”

    I have no agenda here, I just seek the truth. The progressives don’t have a leg to stand on. The countries that reformed the most have done the best (like Denmark) and those that have reformed the least have done the worst (like Italy and Greece.)

    You said;

    “If Tyler is surprised by the reaction to his choice of framing, he is naive, but more likely he was pandering for social status among the progressive elite. That this induced resentment and sputtering outrage from his erstwhile allies is because he stabbed them in the back on the substantive points to climb the social ladder.”

    By that logic I am also pandering. But then why do I constantly say the big government model is awful? I don’t believe Tyler panders. Didn’t he oppose cap and trade and health care reform? He and I both think global warming is a real problem, and I think we both opposed cap and trade. We’ll never be accepted by the left, and Tyler knows that.

    The right is constantly complaining that all these big government programs are ruining America. They complain about the school system, the government involvement in the health care system, the tax system, etc, etc. OK, then why do they think the economy’s doing so great?

    Brian, You said;

    “What you do here every day is way cooler than reading books in a 1973 Hollywood mansion.”

    You have no idea how much I miss my old life before blogger. BTW, I actually don’t want a giant house, I want a great location. Manhattan would also be nice.

    W. Peden, Interesting list. A significant number of those 1973 problems didn’t apply to 1973 America, but many did. But you have convinced me that living standards in the UK have risen by more than in the US.

    I don’t think these apply to the US; 1, 2, 3, 4, 5, 6, 12, 13, 14, 18, 19, 20, 21. (Or at least much less to us.)

    We still have lead in our pipes!

    Jason; You said;

    “I think there are a lot of invisible technology advances.”

    I agree, and that’s something I should have emphasized more. Technology marches ahead, but it doesn’t seem to be reshaping the way we live as radically as before. Going from no phones and cars and record players, to having them, is a much bigger deal than going from having them, to having better versions.

    And yes, I cheated a bit with my grandma’s life–it was ahead of the Romans. I was giving you my subjective take. Electric lights were HUGE, however, maybe a bigger deal than things like cars. Next time your power goes out in the winter, and your furnace also goes out (if it has an electronic starter) imagine living that way for the rest of your life. The flashlight you turn on will have much more light than candles.

    Nick, The example I use for cars is that the 1986 Acura Legend, the first Japanese “luxury” car, sold for $22,500 in the US. It was inferior in every single way to a 3.0 liter Honda Accord, which 25 years later costs only a bit more.

  27. Gravatar of W. Peden W. Peden
    6. February 2011 at 13:34

    I’m not joking about the Appleton Tower, by the way. The movement away from this kind of philistinism alone makes the last forty years in the UK a success. THIS is what was replacing some of Edinburgh’s most history-rich and beautiful historic buildings in the 1960s and 1970s-

    http://api.ning.com/files/3QCA0XbBBMzXjfP0ofDLqj4uBo7ngY3SaazSQBX*aYn1vU876cpEbwaAtLO7sh3DmR-eh2F5wVdUj*9c1nBjQErxhFrowuh*/AppletonTower.jpg

  28. Gravatar of Mark A. Sadowski Mark A. Sadowski
    6. February 2011 at 13:57

    W. Peden,
    My mother was a “Bucker” (from Buckhaven in Fife). Thanks for mentioning the sickening desecration of Georgian Edinburgh! (Vandals!) You link doesn’t work so how about Wikipedia:

    http://en.wikipedia.org/wiki/Appleton_Tower

  29. Gravatar of W. Peden W. Peden
    6. February 2011 at 14:43

    Yes, it has to be c&p’d to work. Sorry about that.

    The Wiki page tells the story. I remember crouching down in corners of the Appleton Tower computer labs, trying not to hit my head on the cold bare concrete. Also, high buildings in windy cities like Edinburgh create wind-tunnels that have to be felt to be believed.

    State planning is still ineffectual (see the trams-scheme in Edinburgh) but at least it’s less ubiquitous and philistine than back in the post-war era.

  30. Gravatar of Thomas Thomas
    6. February 2011 at 14:52

    I just got back from the new bike store in my neighborhood. The building was a grocery store when I first saw it, 25 years ago. Then it became too small for a grocery, and became a drug store. The drug store built a new, bigger store, and now it’s a bike store. I’ve never seen so many bikes, and some of them are really amazing–13.5 lbs, carbon fiber, feather-weight wheels. There’s a series of innovations and societal changes in that one outing, all of them ignored. It’s the story of the BU dorms all over again. As a wise man once said, “I find it hard to think of a single area where American living standards aren’t obviously much higher than 1973.”

    I suppose I might be willing to go back to 1973 if I could keep the same nominal earnings I have now. But only because those earnings in my burg would allow me to retire in a few years while still providing an upper-middle class lifestyle and opportunities to my kids. I’d move from a comfortable lifestyle to, well, rich. But if the question were choosing between the median then and the median now, well, that’s easy.

  31. Gravatar of Richard W Richard W
    6. February 2011 at 15:41

    ~@ W. Peden

    I think architecture is a good illustration of why we should not always slavishly favour the modern. The brutalist architecture of the 1950/60 period spawned the ugliest buildings ever produced. The Victorians knew how to build buildings to last and were pleasing on the eye. It is no surprise that some of the ugly social housing projects of that period produced high crime areas. Moreover, the housing did not stand the test of time as so much of it has been getting ripped back down over the last two decades.

  32. Gravatar of Mark A. Sadowski Mark A. Sadowski
    6. February 2011 at 15:48

    OK a lot of old American cinema sucks and this is not a good film, but still, for the sake of argument:

    http://www.youtube.com/watch?v=c6GcurF-h0g&feature=player_embedded

    Anyone who hates old American cinema or old American cars take note, you’re plain butt fuck wrong.

    “East bound and down, loaded up and truckin’
    a’we gonna do what they say can’t be done
    We’ve got a long why to go and a short time to get there
    I’m east bound just watch ol’Bandit run

    Keep your foot hard on the peddle…son, never mind them brakes

    let it all hang out cause we’ve got a run to make
    The boys are thirsty in Atlanta,and there’s beer in Texarcana
    and we’ll bring it back no matter what it takes

    East bound and down, loaded up and truckin’
    a’we gonna do what they say can’t be done
    We’ve got a long way to go and a short time to get there
    I’m east bound just watch ol’Bandit run ……

    ( banjo & guitar solo )

    Old Smokey’s got them ears on, he’s hot on your trail
    and he ain’t gonna rest ’till you’re in jail
    So you gotta dodge him…. you gotta duck him
    You’ve gotta keep that diesel truckin….
    just put that hammer down and give it hell

    East bound and down, loaded up and truckin’
    a’we gonna do what they say can’t be done
    We’ve got a long way to go and a short time to get there
    I’m east bound just watch ol’Bandit run”

  33. Gravatar of dtoh dtoh
    6. February 2011 at 16:48

    In 1984, my landline bill averaged over $5000 a month (a lot of international calls at >$20/minute). I now pay 2 cents a minute. My first RT trip transpacific airfare in 1975 was $600. You can fly the same route now for only $800 (without the stops in LA and Anchorage).

  34. Gravatar of Jeremy H. Jeremy H.
    6. February 2011 at 16:53

    The hypothetical posed by Thomas above (http://www.themoneyillusion.com/?p=8736#comment-56050) is the correct one for the Great Stagnation claim, not Caplan’s hypothetical. Or more precisely, would you take the median income today or the median income (plus 21% or so) in 1973?

    According to Census data, the median personal (not household) income in 1973 was around $5,000. In inflation-adjusted terms, it is up 21% through 2009. So call it $6,000 in 1973. Median individual income in 2009 was about $26,000. [Source: http://www.census.gov/hhes/www/income/data/historical/people/P04_2009.xls

    I was not alive in 1973, so I’m not the best person to answer the hypothetical. But I would be interested to hear what others have to say. Yes, of course Prof. Sumner would gladly take his six-figure salary back to 1973. But would he take $6,000 in 1973 over $26,000 today?

    The same game can be played with household income ($10-11,000 in 1973 vs. $49,000 today). Or even just the last decade, when Tyler and others claim no growth for the median. Would you rather have $26,000 today or $26,000 in 2000? I was alive in 2000, and I would definitely pick today (and not just because I’m on the other side of the lecture hall now!).

  35. Gravatar of Mark A. Sadowski Mark A. Sadowski
    6. February 2011 at 17:01

    dtoh,
    So $60,000 in telephone expenses a year in 1984? And you paid it willingly. Hmmm. Why?

  36. Gravatar of Morgan Warstler Morgan Warstler
    6. February 2011 at 19:06

    “I guess younger people just don’t see things that way, but for the life of me I don’t know why not.”

    Quick ones:

    privacy is over-rated.
    small towns in 1973 = “what’s a Taco?” etc.
    It isn’t that there is an infinite supply of music choice (there’s not), its that if your early access is limited, it deeply limits the full breadth of your later tastes.

    Scott, ok we’ll stipulate you live your life as a modern age outlier, and while you recognize you are, you do not know why that is, and are unable to attach value emotionally to things most people attach value to.

    NOW THEN, please endure the thought exercise where you assume that your own reality is WRONG – god says, “Scott everything since 1973 is better.”

    How does it alter your prescription? That’s my concern, are you able to adopt new data inputs and make your case, or does your entire ball of wax rest on refusing to admit you prefer the internet over the toilet?

  37. Gravatar of Mark A. Sadowski Mark A. Sadowski
    6. February 2011 at 19:23

    Morgan,
    OK. I’ll vote if it makes you helvitis fokking happy. I’d rather shit in a warm house than have the helvitis fokking internet. It was 5 degrees outside near here a week ago for God’s sake. Get a clue!

  38. Gravatar of Morgan Warstler Morgan Warstler
    6. February 2011 at 19:24

    Mark, as a 13 yr old with access to lots and lots of MCI codes (circa 1983), calling international for free all night was happy fun… talking to random strangers was mind boggling.

    In 2000, paying $1 per minute to call India and use their computer programmers sucked.

    I knew what was right for over 20 years, before it was pervasive, simply because I tasted free unlimited calls to random strangers.

    In my lifetime, I saw EVERYTHING I wanted desperately in a small town realized: unlimited data and news sources, liberal newspaper editors and TV broadcasters rendered worthless, unlimited immediate access to all the music, all the movies, all the TV shows, the books… all the humans.

    When I think I can invent a new method of video scaling, it takes a hour to identify a Russian living in Thailand and get him on video chat, sharing screens, and discussing it.

    In another 20 years, we can fire 75% of the 7-12th grade teachers, not use cash anymore, and have every part of the human condition tied into a network weighing Scott’s glorious UTILITY in real time.

    And Scott is taking about the horse vs. the car.

  39. Gravatar of Morgan Warstler Morgan Warstler
    6. February 2011 at 19:34

    http://www.youtube.com/watch?v=DEwqJDiKR_I

  40. Gravatar of Mark A. Sadowski Mark A. Sadowski
    6. February 2011 at 19:36

    Morgan,
    You wrote:
    “Mark, as a 13 yr old with access to lots and lots of MCI codes (circa 1983)…”

    Damn it Morgan, you’re almost as ancient as me! What makes you so devoid of knowledge of the past?

  41. Gravatar of Peter Peter
    6. February 2011 at 19:36

    “I guess younger people just don’t see things that way, but for the life of me I don’t know why not.”

    The good old days fallacy!

    The jump to the 1960s (which really started with the enlightenment, or at least the Industrial Revolution, not 1900) looks big because it was the big ugly stuff like cars, energy delivery and sewerage and water treatment. The changes since are no less amazing, speaking as someone born in 1962 in Australia (which was probably like 1955 in the US).

    When I first became a lawyer every senior lawyer had 2 secretaries sitting outside banging way at the IBM golf balls. Really urgent stuff was sent by telegram or telex and the word processor showed one line of text at a time and looked like a small electric organ. The productivity gains I’ve seen are amazing. The lawyer’s job didn’t change much from 1900 to 1980, but since then it’s been amazing.

  42. Gravatar of Mark A. Sadowski Mark A. Sadowski
    6. February 2011 at 19:39

    Ok, nice Jerry Reed tune. You’re redeemed.

  43. Gravatar of Mark A. Sadowski Mark A. Sadowski
    6. February 2011 at 20:13

    Morgan,
    Damned, that’s a blast from the past.

    But if you think you’re simply going to persuade me by feeding me pablum, well OK. I’m ready for more.

  44. Gravatar of Liye Zhang Liye Zhang
    6. February 2011 at 21:52

    This article is riddled with bad comparisons. The 1910 example used a house in the middle of nowhere. That is fair – we have to care about life in the middle of nowhere. However, in the comparisons, Scott compared it to places that that are no in the middle of nowhere. For example, in his discussion of piping, he noted that the Minoans had piping. However, they didn’t have it in the middle of nowhere, which makes it a particularly bad example.

    Of course there was more difference between the Roman era and 1970 then there is difference between 1970-2011 – one was a several thousand year time period, and one was a 40 year time period. A much fairer comparison would be across other 40 year time periods. For example, all of the examples that you brought up to amaze a visitor to 1970 would not amaze someone from the 1930s. TV is just a upgraded radio, electrical lights have already been rolled out in the 30s. Jets are nicer then the planes that existed in 30s, but planes have already existed. The examples go on and on, but you get the idea – you can’t expect the same progress in 40 years as you can in 2000 years.

  45. Gravatar of Jay Z Jay Z
    6. February 2011 at 21:53

    Let’s see, what would my movie options been in 1973 growing up in a small town of about 7,000. My town did have a movie theater, which paired with an outdoor which was open in the summer. No revival house, it’s a small town. Don’t know where the nearest one was, probably Madison or Milwaukee, 150 miles away. Family didn’t have color TV until 1974, probably not that unusual. No cable available. No home video, unless you owned your own projector, I guess. Only TV channels available were network, so no independent channel that showed movies very much. Though I guess if DVD is sniffed at, it’s theater or nothing, anyway.

    The film “That’s Entertainment” was released in 1974. That film and its sequel were saleable because generally a lot of the compiled product simply because old movies weren’t particularly available to much of the country.

    How many moderate movie fans, interested in old movies as well as new, would really be happier in 1973 than today? If you actually wanted to see the movies you love in some form?

    My mom grew up in a farm in the 1930s. She liked to read, and her library was a box of books at her one room schoolhouse. The box was periodically replenished from the nearest town, but usually she wound up reading everything in the box, some more than once. Later on she became a teacher, moved around a bit, got her bachelor’s degree and likely had access to enough books. More isn’t an unalloyed good, but I’m not one to believe that the 1930s or 1970s were truly better than today.

  46. Gravatar of Doc Merlin Doc Merlin
    6. February 2011 at 22:03

    The first flying cars were invented in the 50′s.

  47. Gravatar of Doc Merlin Doc Merlin
    6. February 2011 at 22:10

    Anyway this is silly because it assumes that technology improves exponentially… it doesn’t.. technology (each piece) tends to follow a learning curve. (Moore’s law isn’t an exception to this, because it only applies to transistor density, not what a computer can actually do.) The only reason we use exponentials for discounting technological improvements is that a lot of the theory was done before computers, so researchers used simple analytical functions instead of more complicated functions.

  48. Gravatar of JL JL
    7. February 2011 at 01:35

    Scott,
    I’m 26 and I would even trade 1950 for 2010.

    1950 only sucks if you’re poor. But then, 2010 also sucks if you’re poor.

    The great thing about being born in 2010 rather than 1973 is that the (global) odds of being poor are much lower.

    If I made even $30,000 in 1950 I’d be able to afford a car, the best medicine of the time and air travel. Not to mention plumbing, hot water and central heating
    I think the life expectancy of the rich in 1950 was not much worse than the average person in 1973.

  49. Gravatar of William William
    7. February 2011 at 03:16

    You mention life expectancy rising from 47 to 70 over the period 1900-1960, but life expectancy is a poor proxy for adult health because it’s thrown off by infant mortality. I would be interested to see the figures for life expectancy at age 20. I don’t think this enormously affects your main point, and obviously reduced infant mortality is a great blessing of modern medicine, but if we’re talking about the lived experience of adults I think the story is probably one of continuous ongoing small improvements rather than a dramatic surge followed by semi-stagnation.

  50. Gravatar of Tweets that mention TheMoneyIllusion » The modern world — Topsy.com Tweets that mention TheMoneyIllusion » The modern world -- Topsy.com
    7. February 2011 at 04:51

    [...] This post was mentioned on Twitter by openinnovation, Mark Lennox. Mark Lennox said: The modern world: The ongoing debate about Tyler Cowen’s stagnation thesis has gotten me thinking a… http://bit.ly/e9Ge0l – $ Illusion [...]

  51. Gravatar of Morgan Warstler Morgan Warstler
    7. February 2011 at 05:46

    mark, Jerry Reed was the story song singer (I like stories in my songs so I understand them) which makes their anti-1973 message easier to make:

    http://www.youtube.com/watch?v=4OAsohaCx5g

    Though as story songs go, this one is way up there:

    http://www.youtube.com/watch?v=J3Sd2gDkSV8

  52. Gravatar of Tom Tom
    7. February 2011 at 05:59

    What you’re really saying is that you’re more impressed by the extent of inflation than by the extent of technological progress since 1973, whereas you’re more impressed by the extent of technological progress since 1900 than by the extent of inflation. Why does the inflation matter in this context?

    So you’d like to live the lifestyle of a 1973 millionaire or near-millioaire, who wouldn’t? And would you really not prefer even more to live the lifestyle of a 1900 tycoon? Frankly I think you dismiss the latter only because you don’t know much about it. If you really could take your present income back to 1973 or 1900, and spent a year in both times, I’m pretty sure you’d actually prefer 1900. It’s good to be the king. But this has nothing to do with the point you’re trying to make.

  53. Gravatar of Laban Tall Laban Tall
    7. February 2011 at 08:22

    A few points

    a) you can find quite a few writers from the past 200 years (and probably before then) to the effect that ‘never in the history of the world has there been greater change than in the last x years’

    b) “Most of us would rather have $1000 nominal dollars to spend on year 2000 goods than $1000 nominal dollars to spend on year 1900 goods. . . .”

    Not if you were into houses, land, shares – or women.

    c) In the UK even someone who’s young today might prefer 1950-1960s. Full employment, affordable housing, on one income a man could raise a family in a low-crime environment. That’s all gone.

    d) the past isn’t necessarily a guide to the future. Life was pretty stable for 300 years in Roman Britain before the chaos of the Dark Ages, for example. Or in the medical arena, what happens when drug-resistant bacteria have multiplied, and we’ve run out of new antibiotics? We could return to the days when a small injury – a cut leg, or even a splinter, could kill you.

  54. Gravatar of Philo Philo
    7. February 2011 at 09:08

    “Sure, I’d miss the internet. But let’s face it, the internet is a sort of drug.” No, the internet is a priceless instrument of enlightenment. A mansion in Hollywood is as nothing in comparison.

    A different point: without the internet Scott Sumner would be toiling in obscurity, rather than basking in the glow of international celebrity!

  55. Gravatar of Morgan Warstler Morgan Warstler
    7. February 2011 at 10:49

    Tom, which was my point… whats Scott really wants more than anything else – is something between a staff of hand servants and a full time cleaning lady.

    For some technical progress (toilets, cars), he’ll give up making people carry him on their shoulders and empty out his piss pot (Scott, PEE) but he’s not willing to let go one person waiting on his basics needs on his whim.

  56. Gravatar of MikeDC MikeDC
    7. February 2011 at 11:38

    I find the pro-1973 argument patently absurd. I mentioned a few points in a similar thread on econ log, but reading through this one, what really baffles me is that folks who make a living describing an essentially utilitarian social science are willing to make a judgement on their own preferences.

    De gustibus non est disputandem. The fact that you’re some kind of weirdo who likes crowded, dirty movie theaters for than 52″ HDTVs with Netflix built in is not the issue.

    If you ask a hermit of most any time period, of course they won’t really care.

    But as economists, we’re supposed to *AVOID* this sort of value judgement in the first place and rely on the revealed preferences of folks. And those revealed preferences are quite obvious. It’s generally quite possible to live a 1960s lifestyle in 2011. Not in every single case, but mostly. And folks overwhelmingly reject that possibility and choose to live a 2011 lifestyle.

    Inasmuch, Tyler’s book seems to be especially pernicious because it’s taking everyone down such an absurd rabbit hole.

  57. Gravatar of MikeDC MikeDC
    7. February 2011 at 11:40

    Final point… if you choose to take your six figure nominal income back to 1973, be prepared to pay something on the order of 64% of it to the Federal government.

  58. Gravatar of Chuck Chuck
    7. February 2011 at 12:04

    You have completely missed the great inflation between 1973 and 2011 which was the result of ubiquitous computing. Its hard to overstate how much having computers that are one billion (yes, billion) times more powerful over that (relatively) short period of time. And, perhaps even more interesting, is that the power product is invertable, in the sense that you can get a computer that was as powerful one in 1973 for one billionth of the price (although really its only a fraction of an integrated circuit so its hard to isolate out)

    So many things have been changed by ubiquitous computing which includes MP3 (decompression on the fly), every disc based video standard, every appliance in your house from the toaster to the television, your electric meter, your car, your neighborhood stop lights, your bank, your phone, pretty much everything.

    –Chuck

  59. Gravatar of Would You Rather Be Middle Class in 2011 or Rich in 1973? « Interesting Tech Would You Rather Be Middle Class in 2011 or Rich in 1973? « Interesting Tech
    7. February 2011 at 12:16

    [...] Read more here Posted in Uncategorized , interesting, science, tech | No Comments » [...]

  60. Gravatar of Tribsantos Tribsantos
    7. February 2011 at 13:30

    The problem with the “i’ll take 1973″ argument is that what it shows is that inflation was much higher between 73-2011 than between 1900-73. If you do the same mental exercise for Zimbabwe, you’ll find that innovation was much worse there.
    As any economics textbook teaches (including Cowen’s), in the long run inflation is more related to money supply than anything else, so this is a poor exercise.
    To make this comparison, the old-fashioned way is still the best. Compare income per capita. In this graph http://krusekronicle.typepad.com/.shared/image.html?/photos/uncategorized/2008/03/18/worldgdp1600_2003a.gif

    you can see that there is actually a spike around 1950. There’s no stagnation.

    And “sure, there would be no internet” sounds a lot like “sure, there was no electricity in Rome, but other than that…”

  61. Gravatar of dtoh dtoh
    7. February 2011 at 15:02

    Mark,
    Mostly business calls reimbursed by my employer. Up until that time or a little after, almost all international business communication was by telex. The rare personal calls were done with your wrist watch held up to make sure you didn’t exceed 3 minutes.

  62. Gravatar of dtoh dtoh
    7. February 2011 at 15:06

    One other point, there were almost no artificial hips or knees in 1973. That’s more than a million people a year in the U.S. now who are saved from life in a wheelchair.

  63. Gravatar of Chris T Chris T
    7. February 2011 at 15:17

    I’m 25 and have been very impressed by how much things have changed since my childhood.

    Things I can do now, I couldn’t do 20 years ago:

    -Watch my parents, 2000 miles away, react to the news that they have a grandchild on the way in real time.

    -Plan on using cloth diapers which are vastly improved

    -Have access to the greatest information repository ever invented.

    -Take dozens of high quality pictures and select the best without worrying about film.

    -Share those pictures with all of my relatives within minutes if I chose.

    -Have access to a vast array of movies without physically owning them or traveling to rent one for very little cost

    -I have never balanced a checkbook and have never needed to.

    -I can call anyone anywhere at little cost and use my phone for scheduling, alarms, time, and pictures.

    -Easy product comparison and shipping

    -My wife bought an iPod touch last year and can barely remember life before it (she uses it for EVERYTHING)

    -My terrible handwriting is a minor issue

    -I can hop on a computer put in my destination and point of origin and find the fastest route there in less than a minute

    -GPS

    -Taxes are greatly simplified (I’ve done them with paper before – it sucks)

    -Energy costs are lower even with more things to plug in (new appliances are vastly more efficient than they were 20 years ago)

    -My wife and I love to read, but buy few physical books now.

    -Memory foam pillows have improved sleeping

    -Auto payment for bills

    -E tickets

    -I can hang my TV on my wall if I so choose

    -No need for individual music mediums

    -What are records or VHS tapes?

    -Ozone alerts were common in the 90′s for Milwaukee, now extremely rare.

    1973? How about 2011 vs 1991!

  64. Gravatar of Scott Sumner Scott Sumner
    7. February 2011 at 16:07

    W. Peden, and Mark, Yes, I hate that sort of urban planning as well. Architecture is a field where things regressed between 1900 and the 1960s. Things are a little better today, but still far worse than 1900.

    Thomas, You quoted me as saying:

    “I find it hard to think of a single area where American living standards aren’t obviously much higher than 1973.”

    Heh! It’s not fair to bring up my old comments.

    Seriously, living standards have risen an order of magnitude since the 1960s. Of course between 1900 and the 60s they rose 10 orders of magnitude.

    Mark, If we are going to do banjo music, then how about “Deliverance?”

    dtoh, Good points.

    Jeremy, Yes, Caplan didn’t ask the right question, but I answered the question he asked.

    Morgan, I prefer 2011 over 1973, but not at the same nominal income–that was my point.

    Peter, Work life has changed a lot, but how about home life?

    Liye, You said;

    “This article is riddled with bad comparisons. The 1910 example used a house in the middle of nowhere. That is fair – we have to care about life in the middle of nowhere. However, in the comparisons, Scott compared it to places that that are no in the middle of nowhere. For example, in his discussion of piping, he noted that the Minoans had piping. However, they didn’t have it in the middle of nowhere, which makes it a particularly bad example.”

    My grandmother lived in a small town. The Minoans also lived in small towns. I visited one a few years ago and saw the pipes.

    The point about the 40 years is good, but I’d still make my argument for 1909 to 1960 vs. 1960 to 2011. I think the first period saw much more change.

    Jay Z, You said;

    “I’m not one to believe that the 1930s or 1970s were truly better than today.”

    I agree, I just meant I’d take 1930 at the same nominal income. But overall I’d take the present. There has been progress.

    That’s a good point about films. BTW, you must be a fellow Wisconsinite.

    Doc Merlin, Yes, technology does not improve in a straight line.

    JL, I agree.

    William, I don’t have that data, but arguably reducing infant mortality is the very best sort of health improvement. I’d hate to live only 1 year.

    Tom, You said;

    “So you’d like to live the lifestyle of a 1973 millionaire or near-millioaire, who wouldn’t?”

    Bryan Caplan and Morgan Warstler.

    You said:

    “And would you really not prefer even more to live the lifestyle of a 1900 tycoon?”

    Bryan Caplan, Morgan Warstler and me wouldn’t.

    I have no interesting in being “the king.”

    Laban, I basically agree.

    Philo, But only for two years–the other 53 years I prefer 1973 at the same income.

    MikeDC, You said;

    “De gustibus non est disputandem. The fact that you’re some kind of weirdo who likes crowded, dirty movie theaters”

    99% of the time the theater is virtually empty, as I go at 2:00 on weekdays.

    You said;

    “And those revealed preferences are quite obvious. It’s generally quite possible to live a 1960s lifestyle in 2011. Not in every single case, but mostly. And folks overwhelmingly reject that possibility and choose to live a 2011 lifestyle.”

    I agree, but that has nothing to do with my post. I said I prefer 2011 to 1973. But I prefer 1973 at the same nominal income. Find me someone willing to sell me a mansion in West LA today for $100,000.

    Chuck, I agree that computers have made things better, but the changes are trivial compared to 1900 to the 1960s.

    Tribsantos, I agree it was a silly question, but it’s the one I answered. I don’t agree that living standards have recently been rising as fast as 1900 to the 1960s.

    Chris T. Another cheesehead!. I think it must be a generational thing. My mother is even less interested in computers than I am. So perhaps each generation sticks to the lifestyle it is used to, and doesn’t see the changes. New generations come along and are shocked at how backward things used to be.

  65. Gravatar of Chris T Chris T
    7. February 2011 at 16:41

    Part of it too, is reference frame. It was still possible to have missed the last 60-70 years of progress and suddenly be introduced to it in 1945 (my great-grandparents in northern Wisconsin). Thus we get stories of amazing improvements that would sound quite a bit less amazing if they adopted them at the rate they were developed.

    Today, you would have to deliberately cut yourself off from society to achieve the same effect.

    BTW, my family had a cabin for fifty years with an outhouse and no running water (pump). About eight years ago we tore it down and built something akin to a family home. While it was certainly less convenient (particularly during deer season), it wasn’t a significant hardship either. (Although showers were tricky.) So I actually do have a counterpoint for modern plumbing. :)

  66. Gravatar of MikeDC MikeDC
    7. February 2011 at 18:56

    Scott,
    Do you realize that if you have $100k of nominal income in 2011, your federal income tax is something on the order of $17k, but that in 1965, your federal income tax would have been approximately $45k? I realize this is all hypothetical, but if the thought experiment is to have any meaning at all, we should consider what it’s like to actually earn that money in each time period. Earning power is just as much a statement of economic well being as buying power. And in the 1960s, it tells you most of your money will be buying government.

  67. Gravatar of techy3 techy3
    7. February 2011 at 19:39

    Laban said, “c) In the UK even someone who’s young today might prefer 1950-1960s. Full employment, affordable housing, on one income a man could raise a family in a low-crime environment. That’s all gone.”

    My father was born in Southampton in 1938 and his descriptions of the those years include fuel rationing, pipes damaged in the war that still hadn’t been replaced and ran with dirty water, both parents worked to raise one child and his mother died young of a heart problem that would be treatable today. They were considered middle class- both parents were teachers.

    In most places and times throughout history housing becomes more affordable shortly after a million of your countryman are killed. Also, full employment is less impressive before the advent of a minimum wage.

    I’m terribly Anglophile- I take Foyle’s War on Netflix for gosh sakes, but I’m thoroughly unconvinced that Britain in 1950 (“Austerity Britain” as it has been called) was much to be envious of. However I’m not British and I’ll admit that a people who look back fondly on the blitz may have different lifestyle preferences than I do.

  68. Gravatar of Mark A. Sadowski Mark A. Sadowski
    7. February 2011 at 20:35

    Scott wrote:
    “Mark, If we are going to do banjo music, then how about “Deliverance?”’

    Well Okey Dokey:

    http://www.youtube.com/watch?v=6dQSdCZuwME&feature=player_embedded

    P.S. I listen to a lot of Jerry Garcia and I consider myself a Southerner. If it doesn’t have a banjo in it does it really count as music?

    P.P.S. The creepy kid playing banjo looks a lot like most of my Scottish cousins.

  69. Gravatar of Rien Huizer Rien Huizer
    7. February 2011 at 20:54

    Scott,

    Interesting. Maybe you should add geography to history and wonder how a Japanese 100 year old might have approached this. He lived through two waves of economic miracle (in both cases aborted by racist Westerners), survived a nasty war, was always under the benevolent reign of a distant descendant of a Goddess, his current pension/annuity of say JPY 3 million equalled the revenue of all of the industrial holdings of the Imperial Household when he was born and his modest apartment where he lives with his 80 yr old daughter who takes care of him, would be worth more than those holdings, all of which makes him very proud in his brief flashes of cognitivity. I wonder at what time this 100 yr old would rather live with his current wealth and income, but also whether he would like to relive the past since his birth; probably not. You seem to suggest that you would not mind doing something comparable (though not similar) and appear to imply that that is significant.

    I think it is and often wonder about generational differences in life perspectives and generally what causes people to approach their future with optimism or the opposite. Maybe the youngsters in the 60s where unhappy (the roots of postmodernism) about their present (despite a fantastically tight labor market beckoning them) but very confident about their future, so confident that they acted extremely risk-aversely and tried to change mass culture, and did (of course facilitated by technology).

    It seems to me that the current generation of “youngsters” (anyone below 75) is much more apprehensive and maybe the appeal of 1973 (the year of the Yom Kippur war that kicked off lots of things) shows that even hard headed Chicago-trained academics develop a sort of mixture of melancholy and nostalgia to a pst they hardly experienced..That is what happens when economists become philosophical. I still prefer philosophers being economical. So maybe this is not so significant that some appropriate medication cannot suppress the effect.

  70. Gravatar of st st
    7. February 2011 at 21:11

    I’ve been to 1973. No contest. I’d take 2011.

  71. Gravatar of Simon K Simon K
    7. February 2011 at 21:13

    techy3 – Yes, quite. Anyone who thinks the 1950s in Britain were a preferable time to grow up is delusional. Food rationing continued until almost 1950, clothes rationing well into the 1960s, the Suez crisis and colonial independence reduced not only national esteem but economic wellbeing for many people, in the inner cities many people lives in prefabricated homes (almost trailers) until the 1970s since bombed out buildings remained a commonplace, and the massive improvements in material household prosperity (washers, dryers, indoor plumbing) that the lower middle class in the US saw in those years were postponed for their British opposite numbers (who you couldn’t call middle class) until the late 60s and even the mid-70s. Give me unemployment in present day Britain over trying to raise a family in London in the 1950s any day.

  72. Gravatar of Mark A. Sadowski Mark A. Sadowski
    7. February 2011 at 21:24

    How about a little Midnight Moonlight?:

    http://www.youtube.com/watch?v=OLnDWc8APGg

    P.S. That’s Vasser Clements on violin.

  73. Gravatar of Laban Tall Laban Tall
    8. February 2011 at 02:33

    “Give me unemployment in present day Britain over trying to raise a family in London in the 1950s any day.”

    Almost certifiable. These people managed alright.

  74. Gravatar of Tribsantos Tribsantos
    8. February 2011 at 06:56

    Hello, Professor, thanks for answering

    You disagree that living standards have improved more rapidly between 1960-2011 than 1900-1960. But other than impressions (jets aren’t faster, even though air travel has increased fast), what evidence can you provide. This graph here

    http://static.seekingalpha.com/uploads/2010/9/10/saupload_gdp.jpg

    shows that, even in America, the trend of 2% GDP per capita growth has been maintained. If I wanted to be a pain, I would point that between 1900-60, the blue line stays below the trend many times, and that after 1960, it has been consistently, if slightly, above it.

    Now if we take China, or India, the largest countries in the world, and do the same exercise…

    But thanks again

  75. Gravatar of 2011 vs. 1973 » PROSPECT Blog 2011 vs. 1973 » PROSPECT Blog
    8. February 2011 at 07:24

    [...] voice how much they value the internet and other computer-type technologies, while those who would point out that a wealthy person in 1973 could enjoy most of the pleasures of modern life: television, air [...]

  76. Gravatar of Are our best days behind us? | She's a Savvy Investor Are our best days behind us? | She's a Savvy Investor
    8. February 2011 at 08:10

    [...] SUMNER adds to the discussion of Tyler Cowen’s new book “The Great Stagnation” with an [...]

  77. Gravatar of Are our best days behind us? – Economics - Are our best days behind us? - Economics -
    8. February 2011 at 08:31

    [...] SUMNER adds to the discussion of Tyler Cowen's new book "The Great Stagnation" with an [...]

  78. Gravatar of Are our best days behind us? [The Economist] | DreamInn Are our best days behind us? [The Economist] | DreamInn
    8. February 2011 at 08:45

    [...] SUMNER adds to the discussion of Tyler Cowen’s new book “The Great Stagnation” with an [...]

  79. Gravatar of Morgan Warstler Morgan Warstler
    8. February 2011 at 08:45

    “Chris T. Another cheesehead!. I think it must be a generational thing. My mother is even less interested in computers than I am. So perhaps each generation sticks to the lifestyle it is used to, and doesn’t see the changes. New generations come along and are shocked at how backward things used to be.”

    Scott, please stop contradicting yourself.

    If there is this much bias, and you are able to even glimpse it, even consider it…

    How can you advocate an economic policy based on the fact that you are an old man?

    Why are you unable to take the time to think through the full implications of your ideas IF growth since 1973 is higher than the time before it?

    You aren’t a utilitarian, you can’t claim to be a utilitarian, if there are more kids today who think your old stupid values are old stupid values.

    We see a move towards urbanization, a move towards the digital, a renunciation of bigger is better, a greater value placed on communication, information etc.

    If you can’t run the numbers assuming Tyler is wildly off base, then your numbers are worthless.

  80. Gravatar of libfree libfree
    8. February 2011 at 09:39

    I’m coming to this one kind of late, but I wonder about our measurements. Life expectancy hasn’t increased dramatically, but is it possible that quality of life has been a greater consideration as of late rather than just years tacked on the end. No one wants to live to be 150 if they are old a crippled. So instead, we’ve been concentrating resources that make all of the years of our lives better, rather than just extending the quantity. As an asthmatic with sleep apnea, I can tell you for sure that I wouldn’t go back to 1973. My total life expectancy wouldn’t have changed much, but my quality of life sure would have.

  81. Gravatar of Chris T Chris T
    8. February 2011 at 09:56

    People who most definitely would not go back to 1973:
    Diabetics
    Cancer Patients

  82. Gravatar of Laban Tall Laban Tall
    8. February 2011 at 11:51

    When it comes to matters of our individual life or death, we’d probably all prefer the present day.

    Tribsantos : “even in America, the trend of 2% GDP per capita growth has been maintained”

    But isn’t the problem that less of the proceeds of that growth has gone to working people ?

    (and don’t forget an earlier poster’s comments about childcare – children were still cared for back in the 1950s. IMHO all childcare and nursery school GDP should be removed from the figures. Are there any other things which people did gratis in the 1950s and are paid services now ?)

  83. Gravatar of No Airliner Technological Stagnation » PROSPECT Blog No Airliner Technological Stagnation » PROSPECT Blog
    8. February 2011 at 16:17

    [...] progress has declined in the last several decades, Matt Yglesias responds to the idea that advancement in the airline industry has slowed: “Today’s planes are, in fact, technologically superior to the planes of yore. But the [...]

  84. Gravatar of q q
    8. February 2011 at 17:08

    @scott — how much value do you place on the discussion on your blog? because that would not have happened in 1973, no matter what price you were willing to pay.

  85. Gravatar of Mark A. Sadowski Mark A. Sadowski
    8. February 2011 at 17:41

    Chris T.
    You wrote:
    “I’m 25 and have been very impressed by how much things have changed since my childhood.”

    Well that tells me alot from my perspective (I’m 46). Sure things have changed for the better in most ways for the last 15 years. But things got a lot worse in many ways from 1973 through about 1985. You’ll never get me to discount my memory of the “Dark Ages” (especially as far as cars are concerned). Hopefully things will getter in every which way from this time on foreward.

  86. Gravatar of Mark A. Sadowski Mark A. Sadowski
    8. February 2011 at 17:57

    “getter = get better”. “Insert” was pressed. Still the compression kind of makes sense doesn’t it?

  87. Gravatar of libfree libfree
    8. February 2011 at 20:19

    I’m trying to wrap my head around some of these metrics. We look at the prior explosion in mortality rates and then point out that they have slowed dramatically. Why? Here are some reasons.

    1. We’ve picked all the low hanging fruit from past medical paradigm shifts and now we have to slog through the details until we shift our focus again in some radical way. (regenerative medicine, nano medicine ect)

    2. We’ve changed focus from Quantity of Life to Quality of Life. Our metrics are much more geared toward measuring Quantity rather than quality.

    3. We are victims of our own success. We make high volumes of calorie dense food because we have reduced the margins on manufacturing one more piece of food. That food contributes to our day to day desires of not being hungry but thwart our longer term goals of healthy, long lived lives. Ie. calorie restriction is thought to be a cause of longevity. People spend dramatically less time in calorie restriction now.

    4. We are victims of our own success. Children that traditionally wouldn’t have survived child birth are brought into the world and lead partial lives that end early. Now counted as a living person, previously counted as dead before birth.

    5. We’ve created regulatory regimes which make advancement much harder. It was easier to develop drugs when you could test on people with little to no oversight. As I understand it, Chemo Therapy was one Dr.’s attempt to cure Leukemia with some potentially deadly drugs that had little to no testing.

    Just thinking out loud here

  88. Gravatar of Chris T Chris T
    9. February 2011 at 13:33

    Sure things have changed for the better in most ways for the last 15 years. But things got a lot worse in many ways from 1973 through about 1985.

    I wonder about this. It seems most people who have been saying things are stagnant over the last fifty years are in their 40s or 50s. It is possible that the 20 or so years after 1973 were in fact somewhat stagnant, while the 20 years after have not been. Each generation may be projecting how things were in their youth to how things are now.

    Some facts to consider:
    -Patents filed by Americans were at their highest level ever per million people in 2010 (400 per million).

    -Productivity growth has been over 2.5 for all but three of the last fifteen years.

    -The first commercial cell phone was released in 1983, in 26 years 64% of the world’s population had one. It took the telephone 35 to reach a quarter of the population of the United States.

  89. Gravatar of Scott Sumner Scott Sumner
    10. February 2011 at 06:35

    Chris, We have a similar story on outhouses.

    MikeDC, No, Bryan’s thought experiment was trying to estimate the impact of inflation, so you’d want to do after-tax dollars.

    By the way, the 1965 tax code was so riddled with loopholes that the rich actually paid far lower rates than you’d think.

    Rien, A lot of people seem to be assuming that I prefer 1973 to 2011. Just the opposite is true. So there is no need to speculate about nostalgia, etc.

    st. At the same nominal income?

    tribsantos. I agree about China and India. Regarding RGDP, it does no good to point to the data, because the accuracy of the data is precisely what we are arguing about. I think growth is being overstated due to “hedonic” adjustments.

    Morgan, You said;

    “How can you advocate an economic policy based on the fact that you are an old man?”

    I can’t. Which is why I’ve never advocated an economic policy based on my views of progress.

    libfree, Yes, living conditions in health terms have improved lots since 1973, but even more before 1973.

    Chris T, I agree, but people were also much less likely to be diabetic, as they got more exercise.

    q, Some value, but not as much as having a six figure income in 1973.

    libfree, You said;

    “We’ve picked all the low hanging fruit from past medical paradigm shifts and now we have to slog through the details until we shift our focus again in some radical way”

    Sounds exactly like Tyler Cowen.

  90. Gravatar of Morgan Warstler Morgan Warstler
    10. February 2011 at 17:03

    “I can’t. Which is why I’ve never advocated an economic policy based on my views of progress.”

    Scott the basic tenet of Internet Economics is FREE.

    Let me give you an example:

    Traveling 60 miles an hour (a car long ago) you could make it across the country in what 4 days?

    Now in a 767 it takes 4-5 hours.

    That’s 100:4, 25:1

    Meanwhile the cost of bandwidth, processing costs, storage just in the past 15 years blows past 100:1.

    I’ve got an old 2GB HDD from 14 years ago that cost what I get 2TB for today. 1000:1

    Why are you not far more impressed with this massive gain in productive value?

    —-

    So NOW, let’s say soon storage becomes almost invisible as a cost.

    Her’es my question – what if real 5% productivity is supposed to be NO INFLATION? The digital becomes 80% of the economy, and growth means prices for everything everyone wants go down…

    How do you square that circle?

  91. Gravatar of Master of None Master of None
    10. February 2011 at 19:27

    Scott,

    I offered your question to a table of colleagues at lunch today.

    The guys all agreed that either the 1960s/70s would have been a pretty good deal.

    However, one person at the table wouldn’t bite. She made a good point: At what other time in the history of this country would one want to be a woman?

  92. Gravatar of Scott Sumner Scott Sumner
    11. February 2011 at 19:06

    Morgan, You said;

    “Traveling 60 miles an hour (a car long ago) you could make it across the country in what 4 days?

    Now in a 767 it takes 4-5 hours.”

    It took exactly as long in the 1960s as today—there has been little progress in commercial aircraft technology. Fares are lower due to deregulation.

    Master of None, There is an interesting question about what factors get held constant. Just economic changes, or social changes as well? I don’t know.

  93. Gravatar of Scott Sumner Scott Sumner
    11. February 2011 at 19:08

    Chris, There is no doubt in my mind that the last 20 years have seen the biggest change at the world level, so we agree there.

    You may be right about age being a factor here.

  94. Gravatar of Chris T Chris T
    12. February 2011 at 14:24

    It took exactly as long in the 1960s as today—there has been little progress in commercial aircraft technology.

    There’s no possible way the airline industry could support today’s level of demand if there had been little progress. Total passenger service in 1969 was 171 million for U.S. carriers. In 2007 (peak before recession) it was 835 million, nearly a five fold increase!

    http://www.bts.gov/programs/airline_information/

    You may be right about age being a factor here.

    It’s been my general impression that most people tend to take whatever trends held when they were in their 20′s and reference it for the rest of their lives. Crime was on the rise in the 1970′s? Then for them crime has been rising every year since then.

  95. Gravatar of ssumner ssumner
    13. February 2011 at 08:22

    Chris, I disagree, but responded in a different thread.

  96. Gravatar of GOOD QUESTION!: Would You Rather Be Middle Class in 2011 or Rich in 1973? | Con Games GOOD QUESTION!: Would You Rather Be Middle Class in 2011 or Rich in 1973? | Con Games
    13. February 2011 at 13:25

    [...] professor Scott Sumner, on the other hand, writes at The Money Illusion that he would travel back to 1973 “in a [...]

  97. Gravatar of VABALOG › Tyler Cowen’i “Suur Stagnatsioon” VABALOG › Tyler Cowen’i “Suur Stagnatsioon”
    11. May 2011 at 10:36

    [...] The Modern World – Scott Sumner [...]

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