Outrun Change

Another farm illustration of improved productivity

Previously discussed the mind-boggling improvement in productivity in egg production.

I’m a city boy and don’t understand farms.  However, I have one last comparison.

Read more…

What caused the drop in hours it takes to buy eggs?

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.  Read more…

How the price of eggs show we have seen a twentyfold increase in the standard of living in the last 100 years.

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.

Read more…

100 years ago only the very richest people had servants – today even the poor have servants

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?

Read more…

Have things gotten better in the last 100 years? Hint: there’s no better time to be alive than today.

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.

Read more…

What are the underlying drivers of economic development?

I’ve previously mentioned that freer countries are richer countries. See

• Economic development makes every country healthier and richer
• “If you care about improving peoples lives, then you really care about economic freedom”

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

Read more…

Introduction to The Price of Everything

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.

Read more…