We need to learn quickly to keep up with the massive change around us so we don't get run over. We need to outrun change.
Previously discussed the twentyfold drop in the cost of eggs compared to hourly wage of a teacher. What caused the change?
Technology change which enabled productivity improvements.
This discussion is based on The Price of Everything, by Prof. Russell Roberts.
When my father was a child living on the farm, every year the family would get several hundred newborn chicks. Continue reading “What caused the drop in hours it takes to buy eggs?”
Found an incredibly helpful explanation of the radical change in the standard of living over the last 100 years. It is an explanation of the change in the price of eggs provided by Prof. Russell Roberts in his book The Price of Everything. I’ve been discussing this book in the last several posts starting here and continuing here and here.
A challenge I have had when looking at history, particularly the Civil War, is trying to relate salaries or costs from back then to today. It’s one thing to say a soldier made $10 a month or a skilled laborer made $100 a month or a set of uniforms cost $17 or a barrel of flour went from this price to that price in the South. However, I can’t relate that to anything.
How do those prices compare to now? Adjusting for inflation doesn’t really work. Comparing those prices to the cost of an ounce of gold or an ounce of silver helps a little, but that brings in distortions from inflation that we have seen in the last 30 years along with the odd things in today’s economy.
How about using a comparable job to buy a comparable product then and now?
I will drill down in my review of Mr. Roberts book by pulling together several ideas into one linear discussion.
Got to thinking about Russell Roberts’ comment in The Price of Everything that today poor people have servants.
Realized I have lots and lots of servants in my life. Here are a few:
Continue reading “I have dozens of servants in my home and business”
I have discussed Russell Roberts’ book, The Price of Everything, here, here, and here. At one point in the book, he suggests that today even poor people have servants.
As a way of measuring increasing standard of living in the last hundred years, the main character in his book compares a rich guy served dinner by a waiter today to a rich guy 100 years ago served dinner by a servant.
As a starting point, consider one of Prof. Roberts’ comparisons: the rich guy back then had an expensive, fancy watch while the servant had no watch. Today, the rich guy has an exquisitely expensive, fancy watch, while the waiter has an inexpensive digital watch.
Which do you suppose keeps better time and requires less maintenance?
Walter Russell Mead is travelling in China. As all travelers know, this produces lots of insight. I still cherish the learning time I experienced during a number of overseas field audits for a client. But I digress.
In Chasing China Up The Food Chain, Mr Mead says:
The other day I was looking for a pair of gym shorts in Guangzhou and stopped at a sporting goods store. I found some — with a label proudly advertising “Made in Thailand.”
I’ve long read that manufacturers looking for the lowest cost are now building in Vietnam and Cambodia. That is a very serious problem for China.
The solution? Continue reading “Opportunities and challenges in China”
Amazon is moving into the publishing arena. Not just e-publishing books in Kindle format, but the full-blown publishing gig.
I’ve only started to understand what they are doing, but it will be one more radical change in the publishing world.
This is a continuing review and commentary on The Price of Everything (introduced here and here). At one point the characters discuss how much better off we are today than 100 years ago. The main character, Prof. Ruth Lieber, makes a guess on the improvement in overall standard of living:
A good guess is that we’re somewhere between five and 15 times better off in terms of material well-being than we were 100 years ago. Maybe more.
A good point estimate is that our standard of living has increased tenfold in the last century. Not 50% better. Not 100% better. But perhaps something range of 1000% better.
I’ve previously mentioned that freer countries are richer countries. See
What does freedom have to do with countries getting richer?
Russell Roberts offers a partial explanation in his book The Price of Everything – A Parable of Possibility and Prosperity
Continue reading “What are the underlying drivers of economic development?”
Mark Perry points out an article about a company called Taphandlers that moved their production to the US from China because the cost advantage had disappeared.
The post: “Back in the USA” –Seattle Manufacture Provides A Lesson on Reshoring. Expect More of It. Lots More.
Reasons summarized: Continue reading “Reshoring”
I’m going to have a series of posts discussing a fiction book that teaches economics. I just finished reading it for the second time. Enjoyed it more the second time than the first!
In the last few years I’ve thoroughly enjoyed books that are called “didactic fiction.” These are teaching tools written in the form of a novel. This gives the author the opportunity to teach in an entertaining format.
Russell Roberts offers an explanation of the price mechanism in his book The Price of Everything – A Parable of Possibility and Prosperity. As a bonus, the author explains how we developed into a rich economy.
A few weeks ago I attended the Dave Ramsey Live! event in Long Beach. Here is just one of the many great comments he had:
If you are in business, you should be reading these three authors:
- Jim Collins
- Seth Godin
- Malcolm Gladwell
I wholeheartedly agree.
At my other blog, Attestation Update, I’ve posted a list of some great books from these authors that can help you stretch your brain.
Previously discussed Seth Godin’s idea that we are in two overlapping recessions. One is cyclical and will end. The other is systemic and permanent.
I don’t know what we are going to call the new work world. Doesn’t seem to be a description in use that has caught on.
Whatever it’s called, the transition to this new set of rules is going to be horribly painful.
Seth Godin has generated discussion from his post, The forever recession (and the coming revolution).
He suggests that we are currently in two recessions:
The first is the cyclical one, the one that inevitably comes and then inevitably goes. There’s plenty of evidence that intervention can shorten it, and also indications that overdoing a response to it is a waste or even harmful.
The other recession, though, the one with the loss of “good factory jobs” and systemic unemployment–I fear that this recession is here forever.
The first one will end. Continue reading “Two overlapping recessions? One cyclical and temporary. The other systemic and permanent.”
Reshoring = Unwinding offshoring.
Or, bringing jobs back to the US that previously had been moved overseas.
There isn’t much reshoring taking place, yet it is happening. It goes against conventional wisdom of what is happening in the U.S. economy so it is something we ought to ponder.
I’ve been reading for some time that China has lost its place as the low-cost producer. Manufacturers seeking the lowest cost are going to Vietnam and other places in Asia.
This has changed the economics of offshoring.