1973: Utopia or dystopia?
The long post-WWII boom came to an end around 1973. That period saw rapidly rising productivity, and fast rising real wages. Lots of people look back on it as a sort of Golden Age for average Americans.
At the same time, many of these same people have a set of beliefs that imply this was a nightmarish period, a period of horrible living standards. I’ll discuss four examples, but I could cite dozens more.
Here’s the Economist:
In the 1970s eight in ten American children’s blood contained at least double the “elevated” level of lead that now prompts the authorities to intervene. In 1980 the average Australian child contained similarly high amounts. By then, medical studies had made it clear that even smaller amounts could damage children.
When I was young we had large sheets of lead in our garage. I’d chip off pieces and put them into a little pot, where I melted them down. Then I’d pour the lead into a mold to create lead soldiers. If the rifle became bent, I’d stick in in my mouth to straighten it out. As a kid, I’d help my dad restore old houses, scraping paint off the windowsills. Anyone wearing a mask would have been laughed at, called a sissy. Then there was leaded gasoline. I can’t even imagine how much lead I was exposed to. (Please, no “that explains . . . ” jokes.)
In 1973, America was a Flint, Michigan-style dystopia.
Then there was second hand smoke. You could smoke everywhere; in restaurants, offices, airplanes, etc. Bob Lucas used to smoke while he taught us macroeconomics. Younger Americans who can’t stand second hand smoke would be horrified by life in 1973.
Have you ever visited China and seen the air pollution? Many American cities were like that in 1973.
Horrified by the recent gun violence? The murder rate back then was twice as high as today.
So here’s the question. Have living standards for average Americans improved dramatically since 1973, or not?
I think they have improved dramatically, but for reasons that have nothing to do with the points I just made above. To me, it’s obvious that America is a much richer country than in 1973. Average people splurge on everything from jet travel to pedicures, which were considered luxuries back in 1973. Or cell phones, which didn’t exist. But I find the environmental gains to be especially interesting. If you really believe that lead paint, second hand smoke, air pollution, etc., are horrible problems, and clearly the media believes that to be the case, then why would you think that 1973 was some sort of golden age? Life was miserable back then. Right?
And keep in mind that these issues are not unrelated. One reason why productivity growth slowed sharply after 1973 was that more resources were put into cleaning up pollution, which does not show up in the GDP data. One reason why real wage growth has recently slowed is that housing prices in many areas are artificially inflated by NIMBYism, which also came out of the environmental movement. (Admittedly a perversion of that movement.)
PS. Don’t say “we expect life to get better over time.” I know that. My point is that life is getting better over time; 1973 was not some sort of golden age. Why would anyone think otherwise?