Another farm illustration of improved productivity – 10

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.

When my dad was a boy, his dad and mom ran a 360 acre farm with help from my dad and seven siblings along with some occasional hired hands. Adjust that count anyway you wish for the lower number of hours the kids worked and their lower productivity, but that’s still 10 people to work a 360 acre farm.

I have a cousin whose husband and son run a farm today. (more…)

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What caused the drop in hours it takes to buy eggs? – 9

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.  Again, in the framework of economic and political freedom with a stable rule of law.

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How the price of eggs show we have seen a twentyfold increase in the standard of living in the last 100 years. – 8

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 most recently 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?

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I have dozens of servants in my business – 7

Continuing with the idea that today we have lots and lots of servants –

I’m a CPA. That involves working with lots of numbers and doing thousands of calculations. I print lots of documents and send them to my clients. I’ve hired a lot of servants for my business. (more…)

I have dozens of servants in my home – 6

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: (more…)

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?

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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…)

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:

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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.

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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.

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