Economics

100 years ago only the very richest people had servants – today even the poor have servants – 5

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 at a restaurant 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?

Have things gotten better in the last 100 years? Hint: there’s no better time to be alive than today. – 4

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 1,000% better.

The characters argue about whether we are really better off or not. The professor’s monologue, with a few of my comments: (more…)

By Jim Ulvog, 12 yearsJanuary 8, 2013, 8:37 am ago

Crony capitalism is not Capitalism

Rigging the system in favor of your business is not capitalism. It seems like the same and sounds alike, but it isn’t. Here is a better description of crony capitalism: [youtube=http://www.youtube.com/watch?v=2aO9tA5DWJM&feature=player_embedded] Capitalism is when you get the rewards from your effort and drive, not take rewards from others Read more…

What are the underlying drivers of economic development? Freedom. – 3

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

The main character in the book makes a lot of great points in a monologue discussing why rich countries are rich. A few of the comments and my thoughts:

(more…)

Economics

This is a good assessment: “more often than not, politicians are very poor when it comes to making business decisions.”

Crony capitalism is the pretend version of capitalism when you gain sales or market access or funding because you can get favors from government instead of having a product that the market wants and finds appealing.

Success through favors instead of superior products.

Today’s illustration is from a failed video game company, 38 Studios, founded by a former Red Sox pitcher. Anthony Fisher has the story – 38 Studios: Curt Schilling’s Crony Capitalism Debacle.

By Jim Ulvog, 12 yearsJanuary 4, 2013, 7:36 am ago

Economics

Introduction to “The Price of Everything” -2

This is the start of a series of posts discussing a fiction book that teaches economics.

Russell Roberts offers an explanation of how prices coordination the actions of people throughout the economy resulting in the market delivering what people want at the time and location they want it. Check out 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.

Improvements in our standard of living and ‘The Price of Everything’ – 1

I previously discussed a book that describes the power and beauty of the pricing mechanism on my other blog.

I’m going to bring that discussion to this blog. The discussions will be slightly revised.

The focus is on the radical improvement in the standard of living we have seen over the last 100 years. Why are things so incredibly better now? If we can grapple with that question we have a good shot at sustaining that improvement.