The Encyclopedia of Libertarianism

Material Progress

Were one asked, “If one were to use a time machine to transport Julius Caesar from 44 B.C. to George Washington’s time, what would most impress the Roman general?” I suspect that what Caesar would find most impressive was gunpowder, and perhaps equally the discovery that entire continents existed about which he and other ancient Romans knew nothing. He would likely be astonished at the relatively low-cost printed materials made possible by the printing press and at improved harnesses for draft animals, improved sails for seagoing ships, and looms powered by water.

Despite these changes, however, Caesar would nevertheless recognize the world of the 18th century and be familiar with its basic shapes and rhythms. He would not be surprised by the fact that the vast majority of people lived and worked on farms and that a portion of the population were enslaved. He would know that sailing ships take weeks to travel great distances, and he would realize that infant mortality was high and that many women died as a result of giving birth. Just as in the Rome of 1,800 years earlier, no houses would be lit artificially; no cars, planes, or even bicycles would zip by; and the only human voices to be heard would be those coming from persons standing within earshot. Dysentery would be a familiar major killer, and everyday skin cuts would—as in Caesar’s time—pose major risks of fatal infections.

Compare this scenario to the differences in life from 1776 to the early 21st century. Although the time separating George Washington’s early America from modern America is only a small fraction of the time separating Caesar’s Rome from 1776, Washington would surely be far more stunned and confused by our world than would Caesar be of Washington’s world.

Only a tiny fraction of today’s population works on farms. Most people live in suburbs or in cities with buildings that appear to scrape the sky and whose streets are free of horse dung and swarms of flies. Airplanes fly overhead and automobiles zoom around at speeds completely outside 18th-century experience. Nearly every home has indoor plumbing, artificial lighting, and dozens of electrical appliances that perform tasks that Washington’s household slaves did for him, in addition to a host of other appliances such as TVs, cameras, and computers, which perform services that Washington never dreamed possible. Ordinary people regularly vacation thousands of miles from their homes, often on other continents. They frequently hold little plastic devices to their ears in order to talk in real time to people hundreds of miles away.

Today, antibiotics, refrigeration, plastics, and modern cleansers dramatically reduce risks posed by bacteria. Most children are born in hospitals, and impressively large numbers of them grow up and graduate from college. Few will ever need dentures, and those unlucky few will not have their dentures made of wood. Nearly all of these people will bathe daily for their entire lives. Americans’ life expectancy at birth is today at 77.8 years, well more than double what it was (35 years) during Washington’s time. Indeed, 21st-century American society would be almost beyond recognition to a resurrected George Washington.

There can be little doubt that standards of living for the bulk of the inhabitants of those parts of the globe that embrace commerce and industry are today hugely better than they were for nearly everyone who existed prior to the industrial revolution.

With respect to more recent trends, some analysts have argued that the standard of living of the average American has stagnated since the mid-1970s. However, the evidence is overwhelming that this determination is incorrect. Although the median wage rate paid to nonsupervisory workers, when adjusted for inflation using the Consumer Price Index (CPI), shows little increase since 1973, this fact is too weak to support the conclusion that Americans’ living standards have stagnated. This essay is not the place to discuss the challenges of analyzing economic data. It is sufficient to note that the CPI likely overstates inflation, especially by poorly accounting for improvements in product quality, and that if policy or economic changes enable the workforce to employ greater numbers of low-skilled (and, hence, lower paid) workers, the median wage can be pulled down even though everyone’s wages are rising. In addition, wage-rate data ignore income received from nonemployment sources, such as investments and government. Finally, median inflation-adjusted total compensation for nonsupervisory workers has indeed risen steadily, even since the mid-1970s. (Total compensation is a measure of wages plus the dollar value of fringe benefits, such as employer-provided health insurance and employer contributions to workers’ retirement funds.)

We can avoid parsing such data and look at other empirical indicators of recent trends in living standards. At least two such alternative indicators were used by W. Michael Cox and Richard Alm in their 1999 book Myths of Rich and Poor. One of these indicators is to look at what people consume. Data on household consumption show that, in 1994, the percentage of poor households in the United States that have appliances such as washing machines, clothes dryers, automatic dishwashers, microwave ovens, and air conditioners was greater than the percentage of all U.S. households that had such appliances in 1971. This improvement in consumption occurred despite the failure of CPI-adjusted median wage rates to rise significantly during that same time period.

Relatedly, simply listing many of the new or immensely improved products widely available today, compared with the mid-1970s, strongly suggests that today’s living standards are significantly higher than they were 30 years ago. Such a list might include: 

  • camcorders
  • disposable diapers
  • home computers
  • high-speed (and increasingly wireless) Internet connectivity
  • overnight delivery
  • antilock brakes
  • MP3 players
  • e-mail
  • high-definition TV
  • microwave ovens
  • satellite radio
  • GPS navigation
  • cell phones
  • Aspartame
  • availability of different varieties of coffees, teas, wine, and beer
  • soft and disposable contact lenses
  • LASIK surgery
  • home copiers and fax machines
  • digital cameras
  • ATMs
  • pharmaceuticals to treat high-blood pressure, depression, allergies, and impotence

This list can, of course, be extended much further.

A second alternative way to assess empirically recent trends in the material standard of living of Americans since the mid-1970s is to look at how long a worker earning the median nominal wage back then had to work to buy a sample selection of basic consumer goods, compared with how many hours of work today are required to purchase these same goods. (It is worth keeping in mind that, when adjusted for inflation using the CPI, today’s median wage appears to be barely higher than was the real median wage in 1973, suggesting that a worker earning the median wage today would have to work about the same number of hours as did his counterpart 35 years earlier to buy the same goods.) Comparing the time needed to work at each of these two different points of time avoids the need to adjust wages and prices for inflation.

Cox and Alm performed this exercise in their 1999 book. For example, they found that, according to the most up-to-date data available when they wrote their book: 

  • a gallon of milk today (in the late 1990s) costs about 30% less work time than in the 1970s;
  • a loaf of bread costs about 13% less work time;
  • oranges cost 40% less work time;
  • a coast-to-coast telephone call costs about 92% less work time; today, of course, such calls are practically free;
  • chicken costs about 36% less work time;
  • a McDonald’s Big Mac costs 20% less work time; and
  • 100 miles of air travel costs about 39% less work time.

A similar exercise using nominal hourly wage data and a 1975 Sears catalog suggests similar conclusions. If one checks a few items from that catalog that are reasonably—although hardly fully—comparable to similar items in January 2008 and then divides the average hourly nominal earnings of production workers in 1975 ($4.87 in December of that year) into the price of each of these (more or less) randomly selected items, these are the results: 

  • Sears’ lowest-priced 10-inch table saw: 52.35 hours of work required in 1975; 5.63 hours of work required in 2008.
  • Sears’ lowest-priced gasoline-powered lawn mower: 13.14 hours of work required in 1975 (to buy a lawn mower that cuts a 20-inch swathe); 8.44 hours of work required in 2008 (to buy a lawn mower that cuts a 22-inch swathe; Sears no longer sells a power mower that cuts a swathe smaller than 22 inches).
  • Sears Best side-by-side refrigerator-freezer: 139.62 hours of work required in 1975 (to buy a unit with 22.1 cubic feet of storage capacity); 61.9 hours of work required in 2008 (to buy a comparable unit with 25.0 cubic feet of storage capacity).
  • Sears’ lowest-priced answering machine: 20.43 hours of work required in 1975; 1.4 hours of work required in 2008 (and the 2008 machine comes with a telephone; Sears no longer sells stand-alone answering machines).
  • A 1/2-horsepower garbage disposer: 20.52 hours of work required in 1975; 4.22 hours of work required in 2008.
  • Sears’ lowest-priced garage-door opener: 20.1 hours of work required in 1975 (to buy a 1/4-horsepower opener); 7.6 hours of work required in 2008 (to buy a 1/2-horse-power opener; Sears no longer sells garage-door openers with less than 1/2 horsepower).
  • Sears’ only drip coffee maker (nonprogrammable, 10 cups): 7.47 hours of work required in 1975; 1.57 hours of work required in 2008 (although the 2008 model brews 12 cups).
  • Sears’ highest-priced work boots: 11.49 hours of work required in 1975; 9.0 hours of work required in 2008.
  • Sears Best automobile tire (with specs 165/13, and a tread life warranty of 40,000 miles): 8.37 hours of work required in 1975; 2.53 hours of work required in 2008 to buy Sears most expensive tire of this size (although in 2008 the warranty is not specified).

Still, close inspection of a 1975 Sears catalog alongside products for sale today at Sears.com makes clear four facts: (1) the range of products is larger today, (2) the range of different varieties of each type of product is larger today, (3) the inflation-adjusted prices are generally lower today, and (4) the quality of the products is much higher today.

Of course, these facts do not prove, in any rigorous way, that ordinary Americans’ material well-being is higher today than it was in the recent past. But they are strongly suggestive of a higher standard of living. The strength of this suggestion increases when it is considered in light of the fact that today Americans’ life expectancy is at an all-time high and that Americans’ rate of homeownership is also at an all-time high. The global market economy that began to sprout immediately after World War II continues to improve living standards.

 

Further Readings

Cox, W. Michael, and Richard Alm. Myths of Rich & Poor. New York: Basic Books, 1999.

Fogel, Robert William. The Escape from Hunger and Premature Death, 1700-2100: Europe, America, and the Third World. New York: Cambridge University Press, 2004.

Goklany, Indur. The Improving State of the World. Washington, DC: Cato Institute, 2007.

Lebergott, Stanley. Pursuing Happiness. Princeton, NJ: Princeton University Press, 1996.

Simon, Julian L., ed. The State of Humanity. Boston: Wiley-Blackwell, 1995.

Originally published .