Lots of basic concepts in Economics have being swirling round in my mind over the last few months and I’ve be re-thinking what I understand. Though, I haven’t written it here, yet, I’m clearer in how I think of the balance of trade but over the last few weeks I’ve been thinking about the benefits of growth.
The thought that occurred to me was how the improvement in my material well being had improved my standard of living when I compare it to my life as a boy in the 1970s and how I perceived my parents’ lives at theat time.
It occured to me that the only benefit that I really would miss, were I returned to the 1970s would be central heating; my bedroom was cold at night (getting out of a warm bed into a cold room was a challenge). Thinking a little more deeply, IT has been of some benefit to me and I suspect will be even more so in the future. Most practically, mobile phones. I recall waiting for my wife at various places in the early 90s and becoming very grumpy when she was late. Now of course, she can send my a text and say “sorry, held up on bus” and I can safely sit in the pub for a while. Mr Storey pointed out to me that the quality of goods has improved; cars being the main example, which are now safer and more efficient. and, of course, buses that go pssshhhhh.
The trouble is lots of things which appear to be better, well, may not be much better. TV is a good example, there were three channels in the 70s and my (maybe rose tinted view) is that there was a better chance of finding something decent to watch that now, when we have hundreds of channels churning out pretty dismal progamming (exception being sports broadcasting which is certainly better). Healthcare’s better, yes, sure, but the doctors my cure our diseases more often but, on average we’re fatter than in the 70s (much fatter). Is education better? My instinct is that it is not.
Before anyone accuses my of being to nostalgic for childhood, I promise I am not, in fact, I have just as much fun now as I did then. My point is that the improvements in my material well being haven’t made that much difference to my quality of life especially when we consider just how much richer we are now than in the 1970s (three times richer).
I leads me to think about recession; so what, if there were a recession? If incomes all fell by 10%, we could afford less stuff, it’s true but would that be so bad. The simplistic answer is no but, a recession is likely to hit some people much worse than others. While people in a job might see their real incomes drop and suffer without too much pain, others will lose their jobs and this, I think is very serious for them.
I’ve just been listening to another excellent podcast by Russ Roberts who casts doubt on the perception in the states that those on the median income have seen no rise in living standards since the 1980s.