
Most Ordinary Americans in 2016 Are Richer Than Was John D. Rockefeller in 1916 - V-2
http://cafehayek.com/2016/02/40405.html
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zimablue
This is stupid, there is one thing I value which hasn't changed much between
now and then - my time. If I owned my time I could spend it reading, talking
to friends, thinking. These things haven't changed much between now and then.

From a UK perspective, a reasonable house in London costs 1 million. So
broadly, until I have that level of assets, I don't own my time because I must
work and don't have a choice about it. I work somewhere between 10 and 12
hours a day, 6 days a week on average, on a much higher than average salary
and it will take me almost a lifetime to have the assets to own my time.

This comparison is only relevant for those people who already own most of
their time, so say $500,000 and above assets. Which is a lot of people but not
most.

~~~
brucephillips
So you would sacrifice antibiotics, advanced cancer treatment, air travel, the
internet, telephones, etc. to have more free time to talk to your friends,
read, and think?

I wouldn't.

~~~
smallnamespace
Not to be overly reductionist, but from an evolutionary perspective isn't one
of the most important things the survival of your own genes?

Seems especially in modern societies the actual cost, effort required, and
difficulty of finding a mate and raising children responsibly (e.g. so that
they might also be in a position to have children if they desire) is much
higher than it was in the past (hence the sharply declining birthrates in all
modern nations).

You have outwardly modern, prosperous nations like Japan going through slow
demographic implosions. If things are so great, why doesn't society want to,
or manage to reproduce itself in the aggregate?

Are modern conveniences, travel, time to read, travel, etc., the ends in and
of themselves, or are they just supposed to be the means to the only goal that
nature cares about in the long term, which the survival and propagation of
parts of our ourselves?

Not of the individual, since that will always perish, but our genes, our
thoughts, our values and cultures?

~~~
djrogers
> Seems especially in modern societies the actual cost, effort required, and
> difficulty of finding a mate and raising children responsibly (e.g. so that
> they might also be in a position to have children if they desire) is much
> higher than it was in the past (hence the sharply declining birthrates in
> all modern nations).

No, not at all. Sociologists do not at all believe that declining birth rates
are because its _harder_ to raise kids. It’s never been easier! Healthcare in
most of the developed world is taken care of for the majority of people, basic
education is free, and food is so cheap and abundant you’d have to actively
try to raise a malnourished child today.

The idea that delivering and raising a child was easier or cheaper 100,200, or
500 years ago is ludicrous.

~~~
Someone
Even more so for women, especially regarding the “delivering” part.
[http://www.vam.ac.uk/content/articles/r/renaissance-
childbir...](http://www.vam.ac.uk/content/articles/r/renaissance-childbirth/):

 _”Pregnancy and childbirth were dangerous times in a woman 's life, and most
women wrote their wills once they knew they were pregnant”_

~~~
smallnamespace
Is it possible that human psychology and culture evolved in a world with
difficult conscious control over reproduction, and while we have moved to a
world where conscious control is relatively cheap and easy, our instincts and
practices haven't adjusted yet to optimize reproductive fitness?

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jimmytidey
Yep, this is a classic thought experiment that is designed to show you how
fantastic markets are at delivering human happiness. The problem is that the
same could be said about Russians in 1988 after 70 years of communism.

It also ignores the prestige that accrues to those at the top of the pile.
Boudreaux says he wouldn't swap with a 1916 Rockerfeller - but would 1916
Rockerfeller want to swap with him? I suspect 1916 Rockerfeller would not want
to give up his position in society even for cars with electric windows and
wifi.

~~~
mjfl
> I suspect 1916 Rockerfeller would not want to give up his position in
> society even for cars with electric windows and wifi.

That is a massive assumption and given Rockefeller's personality I think it is
very inaccurate to say that he cared about his social rank at all. What makes
you think this way?

~~~
johnchristopher
Because in this conversation Rockefeller is the placeholder/poster child for «
stereotypical rich person », not the real Rockfeller personnality. Parent's
thesis is: status > wealth.

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lumberjack
Certain political factions seem to do nothing but write articles, tell poor
people that they should not fight for their self interests.

Besides the though experiment is stupid. If I was richer than John D.
Rockafeller I would be using my influence to effectively fight climate change.
But I'm not, because a stupid shiny gadget with a tiny screen, doesn't make
you richer than John D. Rockefeller.

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sheeshkebab
I could see the point around dental and healthcare (if you can afford it now),
but otherwise the stuff they mentioned as supposedly making us richer - wifi,
movies, Skype (wtf?) - is the shit barely anyone needs, other than for
entertainment and escapism from otherwise not particularly different reality.

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thaumaturgy
So what's the point here? That income inequality doesn't exist because the
average person in the US today is better off in most ways than the average
person in the US of 100 years ago? Or that income inequality does exist, but
it's okay, it doesn't really matter, because the last hundred years have given
us more toys and comfort?

This is brought up often as some kind of contrarian rebuttal to the politics
around modern inequality. It used to be one of Paul Graham's favorite counter-
arguments. It's still as boring now as it was then.

Conjuring up a convoluted thought experiment just to try to take the wind out
of people arguing about income inequality isn't insightful. It doesn't add
anything to the argument. Literally the best point you're making is that as
long as human progress doesn't stall completely for a hundred years, we should
all be happy.

Oh, and choosing Rockefeller is hilarious, given his status as an oft-
criticized robber baron in the political discourse at the time. (I wish modern
political cartoons were as sharp and well-drawn.)

~~~
junkscience2017
sounds like you are needlessly wound-up about this. it is merely a thought-
experiment detailing some amusing anecdotes regarding the progress of society.
your idea that this is some rebuttal to undermine the issue of inequality
seems to be your strawman...if you look at it from another perspective, much
of the progress addressed in the article has resulted from the democratization
of economic growth

~~~
mikeash
We don't have to, and shouldn't, read this article in isolation. The author is
a pretty hardcore libertarian economist. If you search this blog for
"inequality" you'll come up with a bunch of articles revealing that he thinks
inequality is at worst irrelevant and at best a _good_ thing:

[http://cafehayek.com/?s=inequality](http://cafehayek.com/?s=inequality)

Example quote: "Second, in a market economy rising monetary inequality is
evidence of the expansion of choice and diversity made possible by economic
growth. As society becomes materially richer – that is, as consumption goods
become less costly and more abundant even for poor people – individuals enjoy
a greater range of options of how to spend their time and lives."

Given this context, it would be bizarre if this article was _not_ an argument
against addressing inequality.

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labster
I get that we all have nice things, but that doesn't make Americans wealthy.
If most Americans get seriously sick at the same time they've lost a job, then
they're on a one-way road to poverty. Our standard of living is higher, but
that doesn't make us rich.

~~~
brucephillips
> If most Americans get seriously sick at the same time they've lost a job,
> then they're on a one-way road to poverty.

Source? I don't believe "most" is even close to being correct.

~~~
sidlls
From a duckduckgo search of "median savings us":
[https://www.valuepenguin.com/banking/average-savings-
account...](https://www.valuepenguin.com/banking/average-savings-account-
balance). Half of households _with savings accounts_ have a balance of $5,200
or less.

That's barely one month's worth of basic expenses (rent, food, utilities) in
the Bay Area. It's perhaps 3-6 months' worth in a less absurdly expensive
area, depending on housing situation and how austere one can pare down the
life to. Throw in even a non-serious, but serious-enough sickness and that's
cut in half (or worse).

According to Here's a marketwatch article:
[https://www.marketwatch.com/story/most-americans-have-
less-t...](https://www.marketwatch.com/story/most-americans-have-less-
than-1000-in-savings-2015-10-06), 21% of households don't even have a savings
account. They'd have zero months' worth of anything if they lost a job.

So, yeah, "most" might even be a bit optimistic. I'd have used "vast
majority", "almost everyone", "just about anyone outside the top 5%-10% of
income earners", etc.

~~~
brucephillips
Low to no savings doesn't imply people can't afford insurance. You're not
accounting for government aid.

~~~
sidlls
If a person loses their job they'll get COBRA and see their premiums double or
triple. And a family on government aid in this scenario is already
impoverished.

~~~
brucephillips
> a family on government aid in this scenario is already impoverished.

No, CoveredCA, for example, provides aid to families with income up to 400% of
the poverty line.

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rdlecler1
I read about a study where Harvard grad students were offered $50k/year as a
stipdend but they’d get half of their peers, or $25k/year but they’d get
double their peers. People tended to choose the later. Happiness at least
above some poverty threshold is relative to where you stand in relation to
others. I would bet that JD wouldn’t have traded his life for mine no more
than Bill agates would trade his to be an average joe in the year 2120.

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ahussain
I have noticed a strange effect where as new technologies arrive to replace
old ones, the old technologies become obsolete and we assume that the old
technologies never existed in the first place.

For example, we now have the internet and can search for information online,
so we imagine that pre-internet people had no access to information. But this
is simply not true. There were libraries, bookshops, letters, conferences and
workshops, and a whole infrastructure around knowledge-sharing which has now
become obsolete.

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teilo
I tend to agree with the Austrian school of economics, but this entire article
is idiotic, and I'm certain that Hayek would tear it to shreds.

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mattnewton
In the topic of trading places, you would lose substantial buying power, but
you would gain a crazy opportunity to establish a legacy through generational
wealth. People would sacrifice internet and dentistry and all other modern
amenities for such an incredible shot. Better to reign in hell, as the saying
goes.

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oceanghost
I know some Rockafeller descendants personally. Believe me they're STILL
vastly, vastly richer than ordinary Americans.

The value of their wine cellar alone is several times my peak salary-- and
they do fuck all nothing. Just attend social functions.

They're actually really nice people, just so completely divorced from reality.

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mikeash
I wish articles like these would also discuss what would be superior about
being the rich guy in 1916. I tend to agree with the overall point, but it's
so one-sided it makes me suspicious.

It's absolutely true that my medical care, personal entertainment, and climate
control options are _way_ better than his were. But it's not quite as one-
sided as this article makes it sound. For example, I have to spend a decent
chunk of my time working for other people, otherwise I'll lose all those fancy
modern things I so enjoy. What is it worth to be able to do what you want,
when you want, all the time?

For example, I own (one third share of) an airplane that's far better, in the
aspects I care about, than anything that existed in 1916. I also flew it less
than half a dozen times in the past year because it's hard to find the time
among all the other stuff I have going on. Is it better to have a vastly
superior airplane I get to fly a few times a year, or to have a state-of-the-
art 1916 airplane I can fly whenever I feel like it? I don't think the answer
is obvious.

What's better, the ability to call people on the other side of the planet for
essentially free, or the ability to hang out on the beach for weeks or months
at a time? Again, this is not obvious.

Or just to get down to the very basics, what's better: lots of technological
toys, and medical care that will probably keep you in good health for decades
if it doesn't bankrupt you first, or the near certainty that no matter what
you do, your financial future and that of your immediate descendants is
certain?

The comparison makes me think of slaveowners handing out little baubles and
telling their slaves, "see how good you have it?" while growing fat off the
fruit of their labor. Some lower-middle-class American has a nicer car than
existed in 1916 and a smartphone and good heat and air conditioning at home,
woohoo! Never mind that he needs the phone so his manager can call him in at a
moment's notice, needs the car to get there quickly because he'll be fired if
he's late, and is one paycheck away from losing that nicely heated and cooled
home, while the company he works for makes more in profit from his work than
he does.

What is financial security worth? How much is it worth to have control over
your own life? Maybe it really is better to have modern technology instead,
but it should be addressed.

Aside from these concerns, the article also suffers from terrible temporal
provincialism. It spends several paragraphs talking about how much richer we
are today because we have rock and roll and modern movies. I'm pretty sure
that 1916 had _great_ music, and even if it didn't have the technology to
reproduce that music with high quality, who cares when you can afford to just
pay top-quality musicians to come play it live? And I'm pretty sure that 1916
had great stage plays too, and like music, the technological weaknesses in
reproduction are easily erased with money.

~~~
bambax
> _even if it didn 't have the technology to reproduce that music with high
> quality, who cares when you can afford to just pay top-quality musicians to
> come play it live?_

Agreed! One of the most ridiculous part of the article. You don't need a
stereo or Airplay or Sonos if you have an orchestra... or several.

~~~
brucephillips
Latency and the UI of the orchestra are quite a bit worse.

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anthonyleecook
What I got out of this article was be thankful where we all are today, and
let's all work towards a better future solving hard problems. and fight for
things which are good, and against things which are bad.

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danharaj
If this logic holds, why aren't we all cripplingly depressed about how good
those assholes in 3016 have it?

This is sophistry.

