It’s rare to see any economist get this philosophical, but it is an essay by Brad DeLong:
Our goods are not only plentiful but cheap. I am a book addict. Yet even I am fighting hard to spend as great a share of my income on books as Adam Smith did in his day. Back on March 9, 1776 Adam Smith’s Inquiry into the Nature and Causes of the Wealth of Nations went on sale for the price of 1.8 pounds sterling at a time when the median family made perhaps 30 pounds a year. That one book (admittedly a big book and an expensive one) cost six percent of the median family’s annual income. In the United States today, median family income is $50,000 a year and Smith’s Wealth of Nations costs $7.95 at Amazon (in the Bantam Classics edition). The 18th Century British family could buy 17 copies of the Wealth of Nations out of its annual income. The American family in 2009 can buy 6,000 copies: a multiplication factor of 350.
No wonder Thomas Jefferson died essentially bankrupt.
Books are not an exceptional category. Today, buttermilk-fried petrale sole with pickled vegetables and parsley mayonnaise, served at Chez Panisse Café, costs the same share of a day-laborer’s earnings as the raw ingredients for two big bowls of oatmeal did in the 18th Century. Then there are all the commodities we consume that were essentially priceless in the past. If in 1786 you had wanted to listen to Mozart’s The Marriage of Figaro in your house, you probably had to be the Holy Roman Emperor, Archduke of Austria, with a theater in your house—the Palace of Laxenberg. Today, the DVD costs $17.99 at amazon.com. (The multiplication factor for enjoying The Marriage of Figaro in your home is effectively infinite for those not named Josef von Habsburg.)
Today we still spend about one dollar in five on food—down from the half of income that Americans spent in 1776. The share hasn’t fallen more because some of us buy buttermilk-fried petrale sole with pickled vegetables and parsley mayonnaise cooked, served, and cleaned up by others rather than (or in addition to) oats in the gunnysack. One reason is that the oats-for-five-meals-out-of-six-diet of 18th Century Scots was monotonous, and we are glad to escape it. Another is we play status games: oats taste worse when you know somebody else is tasting petrale sole and, conversely, the fish tastes better to those of us with money and luck enough to dine at Chez Panisse.
Ultimately, I agree with DeLong’s point in all this:
We are simply not built to ever say “enough!” to stuff in general.
My fear is, however, that the extent of progress over the centuries can be used as a means to deny economic justice.* Can’t you just hear it now?:
“At least the poor don’t have to eat oats every day!”
“Poor people are much better off than they were 100 years ago!”
Of course they were, but that’s no excuse for letting the distribution of wealth revert to eighteenth century levels. Or to put it another way, everyone in America is not middle class (no matter how much we think otherwise).
* DeLong’s not doing this, but we all know what happens when good arguments get in the hands of the wrong people.