What’s the correct reference point for living standards?

March 11th, 2015 at 2:58 pm

I respond to Megan McArdle…it would appear that we have different reference points for evaluating living standards and even liberty!

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12 comments in reply to "What’s the correct reference point for living standards?"

  1. Tammy Gottschling says:

    This is a wonderful article, Jared Bernstein. I remember when reading, “The Audacity of Hope: Thoughts on Reclaiming the American Dream” by then senator Barak Obama, being pleasantly surprised that Obama is a proponent of Robert Gordon’s economic analysis.

    • Fred Brack says:

      McArdle’s essay was a giant fish in a tiny barrel, Jared, so it was easy for you not to miss. Nonetheless, you shot holes in the beast while maintaining your characteristic civility. So your principal accomplishment was an impressive display of self-discipline. Few others responding to McArdle’s libertarian contortions are able to maintain even a thin veneer of politeness.

  2. Robert Salzberg says:

    In 1948, the Universal Declaration of Human Rights set forth the basic rights and living standards for humanity. While it has never been fully realized in any country, it is the standard most countries agreed to and to which all should aspire.

    Here’s a relevant section:

    “Article 25.

    (1) Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.”

    • Carl says:

      Rights are wonderful and nice things to declare, but until they are actualized and enabled through institutions, markets individual agency, just saying that they exist is just like banging your fist against your desk and saying “Well, that’s how things should be!”

      • Dave P says:

        That’s true enough if you or I were to proclaim them for ourselves, but these were adopted by governments which then did little to implement the economic rights while castigating others for failing to uphold the political ones. And its governments’ job to enforce rights: markets exist to distribute goods and services for profit, not to implement human rights.

  3. D. C. Sessions says:

    We can dance around the productivity growth issue all we like, and it’s true that Moore’s Law has made our toys both better and cheaper [1]. However, while comparing toys of today to toys of the past may muddle the issue it’s only a distraction. Better cars aren’t much use to people who don’t drive, after all.

    The most basic issues of “living standards” are, after all, the basics: food, shelter, clothing, health, and education. If we compare the median cost of those to their costs a generation ago (after all, what more appropriate standard for comparison than our own upbrining?) it doesn’t look at all good. The median hours worked to pay for food, shelter, clothing, and health care has gone up quite a bit. The cost of education has gone up enormously. And for too many of us, “health care” hasn’t even managed to maintain the life expectancies of a generation ago.

    When our (grand)children are eating as well, housed as well, and educated as well as we were we can talk about toys.

    [1] That’s not a criticism — I made a very good career out of producing those toys. But I’m realistic about them.

  4. Chris G says:

    Nice essay. (Yours. Not hers particularly.)

    > We would never trade, he argues, plumbing, running water, and air conditioning for Twitter.

    This is an important point. Fundamentals are more important than gadgets.

    McArdle also doesn’t really address changes in ones sense of security about their place in the world. Matt Taibbi wrote a few years back “You fail to receive a few past-due notices about a $19 payment you missed on that TV you bought at Circuit City, and next thing you know a collector has filed a judgment against you for $3,000 in fees and interest. Or maybe you wake up one morning and your car is gone, legally repossessed by Vulture Inc., the debt-buying firm that bought your loan on the Internet from Chase for two cents on the dollar. This is why people hate Wall Street. They hate it because the banks have made life for ordinary people a vicious tightrope act; you slip anywhere along the way, it’s 10,000 feet down into a vat of razor blades that you can never climb out of.” (Link: http://www.rollingstone.com/politics/news/how-i-stopped-worrying-and-learned-to-love-the-ows-protests-20111110) While life and opportunities are certainly much better for some segments of the population than they were 30-40 years ago I’ll wager that there a now lot more people who feel “You slip anywhere along the way, it’s 10,000 feet down into a vat of razor blades that you can never climb out of.”

    I was a kid growing up in a rural middle class environment. I remember the 70’s pretty well. Fashion and disco aside, I have no complaints about the decade. The 2010’s are certainly very different that the 70’s but I can’t say that overall I perceive the present to be better – just different. There are certainly elements of life that have improved, e.g., quality of high end health care, food (beer, bread, and coffee in particular), comfort and reliability of automobiles. Computers? Meh. Changes home life but not an overall improvement. Job opportunities and job security? Seems worse but then I wasn’t looking for a job in 1978 so maybe my perception isn’t accurate. I could go on but I’ve gone on long enough. Things are certainly different than they were 30-40 years ago (about as far back as I can remember) but I can’t say that overall the quality of life seems better. Some aspects are better and some seem worse.

  5. Smith says:

    If the cost of education is going up, and you value knowledge above most other pursuits, then cheaper anything means little, MOOCs and the internet notwithstanding, that’s not progress.
    If you value your own time spent on what you want to do, but the demands of full time jobs that require more hours at work than in the past, that’s not progress.
    If you’d willingly trade extra money for more time raising children, but lack of factory jobs and union wages requires two income households, that’s not progress.
    Don’t need to even talk about living standards declining, which McArdle can rightly assert are affected by progress, what about life expectancy? What about declining life expectancy due to obesity and rising rates of smoking among women? What about declining health, and the diabetes epidemic?
    In 1900, more than 1 in 3 workers were employed in agriculture (p82) and 1 in 2 lived on farms (p81). http://www2.census.gov/prod2/decennial/documents/41667073v5p6ch4.pdf It may have been hard work, but compared to what? Working in an office where the mere act of sitting shortens your life? http://health.usnews.com/health-news/family-health/heart/articles/2010/07/22/the-longer-you-sit-the-shorter-your-life-span-study
    Is there something lost from the era of the independent farmer (though dependent on grain storage, rail roads and speculators, ignoring the sharecropping south) in the age of the factory, and then corporation?

    There is a bidding war and changes where you can’t go back to living in an earlier era with less conveniences. Farmland lost to McMansions, costs too much and undercut by agribusiness with gmo corn, fertilizers and pesticides which predominate.

    There are studies showing hunter gatherers worked less. http://pacificecologist.org/archive/18/pe18-hunter-gatherers.pdf
    Yes we can’t go back to that way of life due to land per capita constraints, but it doesn’t necessarily spell progress either. Social and cultural evolution are not necessarily any more directed than biological evolution.

  6. Tom in MN says:

    There are a couple of absolute measures: homelessness and hunger. It’s absurd that we have either in our country today, especially among children who can’t be blamed for their predicament. In addition these have net costs for everyone and thus would raise everyone’s living standards if they were eliminated.

  7. Name says:

    Overall, living standards are better in ‘first world’ nations. Growing human population is relying on more complex, therefore tenuous, technology to increase efficiency. Countering that is excessively marketed ‘affluenza’, which tends to be unreliable, non-durable — even when less subject to rapid obsolescense.
    I think common health care is better. Diabetes for example.
    However the incidence of diabetes is said to be higher. otoh, did more people die younger from diabetes in ye olden years?

    (In the U.S.) I’m not convinced that political corruption is much worse than has been in the past. not so long ago:
    (overt) jim crow.
    lack of voting rights for women
    Both seem insane now, but demonstrate that even in an purportedly ‘enlightened’ (exceptionalist!) country far past revolution or conquest/renewal, human/political rights are perpetually fragile.

  8. Name says:

    fix: obsolescence