Steve Horwitz on Cost of Living
By David Henderson
LearnLiberty has an excellent short video featuring St. Lawrence University economics professor taking on the myth that the cost of living has risen over the years.
He does it in two ways:
1. First, he looks at the prices of goods, not in dollar terms, but in amount of labor time you would have to spend to get the wherewithal to buy the goods. This is the technique Brad DeLong used some years ago in my favorite piece he has ever written, “Cornucopia: Increasing Wealth in the Twentieth Century.”
2. Second, for goods like cars whose prices in terms of labor hours have risen, Horwitz shows that we are getting so much more for our labor hours: comfort, safety, luxury features, and durability. What would have been interesting, although maybe the data would be hard to get, would be to look at labor hours spent per thousand miles of driving. I bet that has gone down.
One annoying feature, to me at least, is the background music. Steve has a rich voice that needs no musical back-up and the music was both boring and distracting.