Brad DeLong on Cornucopia
By David Henderson
I’m sitting in a United Red Carpet Club at LAX, having just used my last coupon that expires next year. That, in itself, is evidence of Cornucopia. I’m able to get on line, get “free” booze (although I opted for the sparkling water), and get good afternoon snacks.
But that’s not the biggest evidence of Cornucopia. The biggest evidence is from the best study I know of that Brad DeLong ever did. I taught some highlights of it to my class in San Diego this morning and so I want to post while it’s fresh. It’s titled “Cornucopia: The Pace of Economic Growth in the Twentieth Century.” In it, Brad shows the number of hours you would have had to work in 2000 at the average wage to earn enough money to buy items from an 1895 Montgomery Ward catalogue and then shows the much greater number of hours you would have had to work in 1895 to earn enough to buy those same items. For all but one of those items, you would have had to work much less in 2000. The one exception, which I’ll get to in a minute, is interesting.
I pointed out to my students that if you ran the numbers in 2015, most of them would probably look even better. Take, for instance, the six volumes of Horatio Alger. DeLong computes that you would have had to work 0.6 hours to make enough to buy them in 2000, versus 21 in 1895. How about now? You can buy them for $1.99 now, which would take less than 0.2 hours at the average wage today.
The exception is interesting too: a silver sterling teaspoon, which took 26 hours in 1895 and took 34 hours in 2000. I’m a little suspicious about the 34 hours, but let that pass. As DeLong himself points out, that price is kind of irrelevant because we no longer need silver teaspoons. He writes:
For those who think that the important characteristic is that it is made of silver, it is indeed 25 percent more expensive than it was back then when you could pick the silver up off the ground in Nevada. But for those who think the most important characteristics [sic] is that it does not rust, a teaspoon today costs only one-fiftieth as much in labor times as it did a century ago.