This assumes that wealth is a zero-sum game, so it can be traded around but not created.
It's hard to reconcile that view with the fact that standards-of-living have been growing, more or less worldwide , for the two centuries.
This is an honest question as several people have mentioned the standard of living argument before on HN. I've read however that the rich-poor divide is growing and thus am just wondering about this..
[0]http://www.economist.com/node/21548963 [1]http://www.washingtonpost.com/blogs/wonkblog/wp/2013/12/13/a...
I don't have time to dig up sources but it's not hard to research. Wikipedia is a good place to start.
A 2013 "middle class lifestyle" might be far ahead a 1950 "middle class lifestyle" in pocessions, access to products, etc, but there are important differences too.
For example, in all likely the 1950 "middle class" family could get all they needed by only one person working. And that person work an 8 hour day, with benefits and security. He was also quite sure that'd he keep his job if he was half decent at it permanently. He rarely was in debt.
Today's middle class starts of with a large debt (college loans), both in the couple have to work their asses of, and are not very far from falling off middle class, should anything bad happen (from a market crash to a medical emergency).
As for the increased luxuries and such (compared to 1950), those don't mean nothing to them, as they are the assumed zero-level for all middle class in their time.
Keep in mind that this is only a couple of decades (at most) from the Great Depression. Even if the 1950s were clearly better, it's a rather cherry-picked data point considering how much worse the 1930s clearly were.
That being said, I'm not too excited about the intangibles of the 1950s. The Korean War was in the 1950s and Jim Crow was in full swing. Life expectancy was much lower. Just about any consumer good from today is clearly superior to the 1950s equivalent.
And no, it's not "movies and television". There are numerous books studying the decline of the middle class since the seventies.
Heck, there's even an accepted term "Great Prosperity" (as opposed to the "Great Depression" that describes the era after World War II for the USA and the West in general.
http://en.wikipedia.org/wiki/Post%E2%80%93World_War_II_econo...
Here are some factoids:
Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs.
According to one study, between 1969 and 2009 the median wages earned by American men between the ages of 30 and 50 declined by 27 percent after you account for inflation.
Back in the year 2000, more than 64 percent of all working age Americans had a job. Today, only 58.7 percent of all working age Americans have a job.
The home ownership rate in the United States is the lowest that it has been in 18 years.
In 1989, the debt to income ratio of the average American family was about 58 percent. Today it is up to 154 percent.
Consumer debt in the United States has risen by a whopping 1700% since 1971, and 46% of all Americans carry a credit card balance from month to month.
Back in the 1970s, about one out of every 50 Americans was on food stamps. Today, about one out of every 6.5 Americans is on food stamps.
Compare the lives of minorities and women in America 60 years ago to their lives now. Quality of life for the majority of Americans has undeniably improved. You have massive tunnel vision if you cannot recognize this.
Remember that white American men are a plurality, not a majority.
It actually was a pretty good time, if you were American and white. The post-war boom was in full swing, American economic growth was at its highest in the 20th century (stats for earlier periods are harder to estimate, though long-term data series such as those collected by Angus Maddison might show this -- and the railroad and industrialization booms of the 1840s and 1880s were likely close). The US was the world's largest producer of oil (though it had just begun importing from Saudi Arabia), and it had essentially no rivals for industrial production (Europe and Japan had been seriously damaged by the war and were rebuilding, Korea and China wouldn't emerge for decades).
The Korean War was in the 1950s
For three years, 1950-1953. The US's troop commitment was 300,000. That compares with 16 million US troops in WWII. Fatalities alone were nearly as much as the Korean War deployment at 292,000. Korea was significant, but much less significant.
and Jim Crow was in full swing.
And starting to crack. Though it peaked in the 1960s, the Civil Rights movement had its roots in the 1950s, particularly the 1955 Montgomery Bus Boycott. No, it wasn't great, and there's still a huge amount of inequity, but things were finally starting to change.
And yes, there's a reason Nina Simone (and many others) left for France. https://www.youtube.com/watch?v=hBiAtwQZnHs
Life expectancy was much lower.
Not all that much especially when compared with improvements over the prior 50-100 years. Life expectancy at birth was about 66 years in 1951 for white males, 72 for women, vs. 75 and 80 years in 2004. That compares with 38 and 40 in 1850. The biggest single-decade jump for men was between 1911 and 1919 (six years), about the same for women. Much of that came from improved safety (particularly industrial conditions and automobiles), some in behavior and environment (decreased smoking, drinking, and air pollution). It was earlier advances in antiseptics, anesthesia, sanitation, waste disposal, food preservation, nutrition, and pharmaceuticals which accounted for the big jumps. For men, 1900 - 1950 saw an 18.08 year increase, 1950 - 2000 an 8.49 year increase.
http://www.infoplease.com/ipa/A0005140.html
Just about any consumer good from today is clearly superior to the 1950s equivalent.
I'll grant increased capabilities, complexity, and decreased costs, though overengineering (or lack of corner-cutting) meant that many electrical and mechanical products were more durable then. There's also the question of just how much such advances impact on quality of life.
It's simply false that you can live this way today on the same dollar amount.
I don't think it's reasonable to complain that you can't sustain a family and a house that is 1.5x what they were in the 1950s, on a single income.
However, if you go back 50 years earlier, the lower class lifestyle was not that different from the favella living in slums around the world, where entire families lived in one or two rooms and everyone in the family who was able was responsible for contributing to making ends meet.
Your second point (which I agree with) seems to imply that the US standard of living peaked in the 50's
The lower bound on lower middle class is, according to Wikipedia, $32,500. There are plenty of houses available for purchase in the $60,000 range, which is well inside of affordability ranges.
There are a plethora of rural homes available within those ranges, but that level of income isn't necessarily exclusionary to city dwelling either. Dallas, San Antonio, Cleveland, Cincinnati, St. Louis, Tampa, etc., are all very affordable, and at least according to MSN[1], has homes available for less than the lower bound on lower middle class.
[1] - http://realestate.msn.com/what-you-must-earn-to-buy-a-home-i...
> The lower middle classes can't own any house at all with just one wage earner
is not a true statement. If you'd like to qualify it further, feel free. I suspect I'd have to research more to answer, and I don't necessarily disagree with the sentiment you're suggesting, but presenting falsities as facts doesn't do any argument any particular good.
Similarly, the 'sane working hours' you mention, generally speaking, were 48 hours a week or more. In the 'upper' middle class, more hours were spent at the office as well. Today, the average worker works ~37 hours.
Assuming job accessibility (which I have no idea if there's a guarantee of or not), and more reasonable home purchasing, I think it's not "simply false" that one can live the same way as they did in the 50s on the equivalent working wage, one simply has to make more apt comparisons to see that the goal posts have shifted.
The average 1950s family only owned one car, while the average family of today owns more than one (likely, to support the second job). If each of us bought houses half the size of what we're currently buying, and half the cars, we'd likely be in greater parity with our 1950s brethren. Also, they had to pay less than half of what we did for college, and they also likely didn't borrow in order to afford it, which factors in even further in measuring debt load.
Anyway, I think your comparison is somewhat rose-colored.
Actually, it's an even greater difference than that. The median household income in 1955 was about $4k, while today it's about $50k. In 1955 the cheapest Ford cost about $2k, or half the median household income, whereas today the cheapest Honda costs about $16k, or a little less than a third of median household income.
If we just leave it at that, it sounds like things are about the same. However, the cheapest Honda today comes with airbags, air conditioning, power windows and locks, an FM radio, and a whole host of other features that were luxuries reserved for the most expensive cars (if they were even available at all). On top of that, my (and others') experience with modern Hondas is that they can easily go for 200k miles without major repairs or tune-ups, whereas 100k miles was considered a major achievement for a Ford of that era. Realistically, this difference in longevity alone means that a car from the 1950's cost about three times as many working hours as a car of today.
Beyond that, cars were still a relative novelty in the 50s, and ownership was more sparse. I'd have to research to see, percentage-wise, what the cost equated to. It's possible that their rarity meant that purchasing one car was equivalent to purchasing two, in today's age, but again, I don't have figures on that.
And, of course, I think you're dramatically underestimating the role of gender equality on the work force. Women work, many times because they choose to, not necessarily because they have to.
Regardless, the point you made simply isn't supportable by the raw facts that you presented, nor were necessarily the facts that you presented even factual. I don't disagree necessarily that the upper middle class of today is disadvantaged relative to the upper middle class of the 50s, but if that's the case, it's not because they worked less hours or owned larger homes.
I think in some ways, even the poor are better off. In some ways, even the wealthy are probably worse off. I agree that any notion of "We're all {better|worse} off than 1950" is naive without a greater degree of specificity. It's equivalent to saying that football was "better" in the 50s. How? Certainly not in player safety. Certainly not economically. In pure terms of game play, what metrics? Certainly not in passing. Etc.
There are numerous alternative measures which have been proposed, though none have been widely adopted: FISH, GPI, UNHDI, GSDP, GESDI, etc.
"Nobel Laureate: Examine Alternatives to GDP"
http://www.scientificamerican.com/podcast/episode.cfm?id=nob...
The report didn't postulate on what the actual cause might have been, or how happiness was measured (or, if it was, I've forgotten), but I found it interesting, and it does support your point here. It seems that, at least since I've been paying attention, America has been trying to optimize for wealth or income, though statistically, it seems that there is validity to the notion that money doesn't buy happiness. If we could better isolate the causes of happiness, we could start optimizing for those factors instead.
And it very much is.
>It's hard to reconcile that view with the fact that standards-of-living have been growing, more or less worldwide, for the two centuries.
Those are not personal wealth.
Increased standards of living are a kind of background element, as they are more or less shared by the population. Statistically they even out, and only differences from them matter.
A guy living in a trailer park today, with a tv, microwave, electricity, some medical access etc, would be considered living like a king, compared to a 1600's peasant working in some feudal farm. That doesn't mean he feels (or is viewed) as such in our society.
You seem to have gone backwards, and defined wealth as "only the things other people don't have", in which case of course it becomes a zero-sum. But that isn't what wealth is.
The modern understanding of Wealth is the abundance of valuable resources or material possessions. [...] In this larger understanding of wealth, an individual, community, region or country that possesses an abundance of such possessions or resources to the benefit of the common good is known as wealthy. -- Wikipedia
>And it very much is.
You may be confusing wealth with money, which is in fact a zero-sum game. Wealth, on the other hand, can be created and it's been constantly created all the time throughout history. The section on the Pie Fallacy in this article may help clarify it: http://paulgraham.com/wealth.html
So can money.
Neither wealth nor money is zero-sum.
Restrictions on housebuilding is a perfect example in the UK with its dysfunctional housing market. The older generations are happy to have their house prices artificially inflated by not allowing enough homes to be built for the younger generations and immigrants. Keeps rents and prices high while not creating any wealth.
...how does it not?
Are you seriously attempting to make the case that automobile accidents and overabundance of food have made all of our other advancements a complete wash? That is delusional.
I only gave the example to say that what's basic is relative (compared to current standards), so saying that a trailer-park person has more access to more things than a peasant doesn't mean anything.
In fact, most things people associate with the middle ages are either BS or happened at other times. Witch-huns and the Inquisition for example, are phenomena of the Renaissance, not of the middle ages. Even the Plague happened on the tail end of the middle ages entering into the Renaissance.
Heck, even fewer know that the ratio of holidays (what we'd call bank holidays today) to work was extremely higher in the middle ages compared to today.
Most homeless/coupon-living/trailer individuals would be much better off in the middle ages compared to today.
And you assume that because it's not always zero-sum, that it never is, a position just as fallacious.
Your view is hampered by your ignorance of the definition of the word value.
If people are making money (i.e. selling a product or service for a profit) they are by definition creating value by default.
The fact that you may not find what they are doing valuable is as irrelevant to the equation as the fact that I don't like broccoli.
Given your reply, I'd say it's your ignorance on display here.
> If people are making money (i.e. selling a product or service for a profit) they are by definition creating value by default.
False. This naive notion assumes everyone is honest and consumers are informed, both of which aren't true. Plenty of people make money by duping customers into thinking they're providing value when they aren't and relying on customers laziness to take the loss when they figure out it was a scam.
That someone voluntarily gave you money does not mean you provided them value. There is no value in Homeopathy, there is no value in fake magic aura balancing bracelets; these are simply people scamming stupid people for money by pretending to add value.
But on the other hand, a million dollars is in no small part worth a lot because most people don't have it; if everybody did, that wouldn't make everybody rich, it would just mean a loaf of bread now costs a million dollars. You can't just ignore that "because rising standards of living". Wealth is first and foremost a word, not an actual thing, and the associated concepts can be complex... but wealth purely in the sense of market shares, of bank accounts, even of being an expert in comparison to non-experts.. there is so much of what we tend to consider as wealth that is obviously a zero-sum game.
Much of that standard-of-living increase has been dug or pumped out of the ground in the form of coal, oil, or gas:
http://ourfiniteworld.com/2012/08/29/the-long-term-tie-betwe...
Inequality has been growing a lot the last three decades
http://www.theguardian.com/society/2013/dec/17/living-standa...