A favorite pastime of economists is demonstrating how some of us are much wealthier than we think. The definitive example of this theory was provided by economist William Nordhaus in the mid-1970s, when he undertook to figure out what the relative labor cost of light was throughout history. As recounted by David Warsh in "Knowledge and the Wealth of Nations":
"Half a million years ago, Beijing man would have worked sixteen hours a week to gather wood to illuminate his cave, he estimated. A Neolithic man, burning animal fat, would have spent only a little less time chasing down and rendering the duck. A Babylonian man, on the other hand, would have worked just ten hours a week for an equivalent amount of lamp oil, and both the quality of light and the ease with which it could be controlled were much improved. Some four thousand years later, at the beginning of the nineeteenth century, candle technology had improved matters further still -- but only by a factor of ten."
But today? The amount I have to work to keep the light on in my basement is so small it barely fits on the same chart as Babylonian man. A modern hundred-watt bulb, burning three hours a night for a year, would be equivalent to burning 17,000 candles. (And we aren't even talking about compact fluorescents or LEDs.)
Examples of such analysis abound. In an article for Wired, Brad DeLong similarly considers the relative cost of flour. A few weeks ago David Leonhardt waxed rhapsodic about improvements in snowblower technology in the New York Times. Heck, just last night my daughter downloaded a few hundred songs from my computer into her new iPod Nano in just a couple of minutes. Compared to the labor I would have exerted copying that many songs from vinyl to cassette, back in the day, her cost of music acquirement was dirt cheap.
The latest twist on this theme comes in an essay in today's New York Times by economist Robert Frank, who discouragingly answers the obvious follow-up question: If we're all so rich, why are we all still working so hard? Whatever happened to that leisure society we were supposed to be living in right now, where we worked one or two days a week and spent the rest of our time learning Sumerian or practicing Pachelbel's Canon on the accordion? When do we get out of the rat race?
Never, says Frank. Our relative riches quail in the face of our endless craving for increased "quality." Having become accustomed to power steering and brakes in our cars, now we can't be satisfied without GPS navigational systems, DVD players in the backseats, and satellite radio. "The desire for higher quality has no natural limits," writes Frank. "[John Maynard] Keynes and others were wrong to have imagined that a two-hour work week might someday enable us to buy everything we want. That hasn't happened and never will."
Ever since reading Frank's essay, I have felt disquiet at its implications, and unease at the general sense of self-satisfied back-scratching complacency that suffuses so many of these investigations. Is the message that workers who are dissatisfied with how slow their wages are growing should just quit their bitching, and be thankful they're not doomed to spending their days rendering duck fat? Can you really tell a worker who has just been laid off to relax, because she is still rolling in the lap of luxury compared to a 15th century French peasant?
Or should we undertake a different reading, and realize that it is nonsense to compare ourselves to the past. Isn't what really matters the relative direction things are headed in the present? If overall wealth is expanding, but some are getting less, and some are getting more, telling those who are getting the smaller slice of the pie that they are richer than their forebears seems remarkably insensitive. And that's putting aside the immorality of the entire debate, when judged against the billions of people in the world still earning less than $2 a day. Whether we are richer or poorer than our parents is an academic question. Whether inequality is growing in the present is the stuff that revolutions, or at the very least, electoral change, is made of.