December 01, 2005
Inflation???
Karl Marx's notion that capitalism emmiserates the working class is the basis of the argument for Communism. The more workers become better off under capitalism, the more desperately its foes try to convince them they are in fact miserable. One of their tools is envy - it doesn't matter how much better off you are, the lot of the people at the top is improving faster, and that is supposed to mean you are somehow suffering, tho I've never figured out how. Another of their tools is the magic word inflation. Merely invoking it is supposed to prove people are worse off than they were, which would be true if in fact the cost of living were going up faster than incomes.
I was digging out the basement of the you know house today; the wee wifey expects us to actually be living there within a month. In one of the torn cartons of left-behind junk I happened upon a Sears catalog from the spring of 1980. Comparing prices from then to now makes for an interesting look as to whether today's consumers are actually well off.
Everyone knows about the massive improvement in computer power, but we tend to forget that the thousand dollar home computer of 1980 did not come bundled with all the peripherals. The printer was another $599, and printed 40 characters across on cash register roll paper. The external disc drive was a big improvement over the bundled tape deck, but it was single sided, single density, and cost $749. The same factors which make these prices so extreme also impacted other electronic products. The VCRs Sears offered then used the technically superior Beta format, but the base model was $735 and the deluxe was $985. They offered TV cameras you could attach to the VCR to "create your own home movies", black and white for $297.50, color for $799.95, and color zoom, with a black and white electronic viewfinder for $1145. I've never shopped for a camcorder, but my understanding is that these sort of prices would pay for serious professional gear today. Semiconductor technology has even brought down the cost of flourescent lighting. In 1980, a 20 watt screw-in ring light cost $12.98; right now a 20 watt compact flourescent (marketed as equal to a 75 watt incandescent) is one buck at Ace after in-store rebate. It's hard to compare car stereos, since none in 1980 were able to play MP3s off a CD-R/W or USB memory stick like the one I just got for $109, but even the $239 cassette players can't match the digital tuning capability or power output.
Even more significant are price comparisons on items not influenced by Moore's Law. Right now Aldi's is offering a sewing machine and a blender which are roughly comparable to the cheapest ones Sears offered in 1980, for just about the same price. Because of the season, right now Sears themselves are closing lawn tractors which, with what were options now included, are half what the same function would have cost. Today's high end bicycles hadn't been developed back then, but basic kid's bikes have come down in price. Steel-belted radials, on which Sears was an early market leader, haven't quite held steady on pricing, but a 44,000 mile warranty wouldn't cut it for a premium tire today. Blue jeans were less expensive then, even with all the extra fabric they had below the knee, but not by that much, running $12 to $15 a pair for their private label brands, and men's cotton briefs, at $4.95 for a 3-pack were more than I pay now.
It is actually quite easy to make the case that consumers are better off today, even if wages at the median aren't going up as fast as those at the top. If the numbers I've cited aren't enough to prove this, let me know and I'll scan and post images of the Whimsical Frog Family Coordinates for your kitchen and the Shirts and Shorts for Contemporary Guys.
Posted by triticale at December 1, 2005 07:17 PM | TrackBack