Howard Hughes was one of the richest people in the world during his lifetime. He was also a bit of an eccentric fellow (putting it mildly). But I recently learned an interesting tidbit about his life that puts into perspective just how much wealthier we are today in ways that simply can’t be captured by mere reference to GDP accounting.
Hughes was an insomniac and a movie buff. Unfortunately for him, late night programming was very limited. He wanted to have more options available for what to watch during his sleepless nights. And, with his not inconsiderable resources, he managed to find a solution. He ended up buying a TV station, KLAS, in 1967 for the price of $3.6 million dollars, which would come out to just under $34 million dollars today adjusting for inflation. Now in control of his own private TV station, he could ensure movies would be broadcast at all hours. And apparently, it wasn’t uncommon for him to decide he didn’t like what was being shown and simply call the station to tell them to play something else instead. As a result, anyone else who was watching the station would suddenly find themselves confused as the movie they were in the middle of watching was suddenly switched to something else.
Hughes was a wealthy man. But at the same time, he had to spend what in todays money would be tens of millions of dollars in order to get a service that was vastly inferior to what anyone with a Netflix subscription has available to them today. Hughes could have burned through his entire fortune without ever coming close to gaining the dizzying variety of entertainment that you or I can have today for a trivial amount of money.
If you look at Hughes’ net worth during his life (even without adjusting for inflation!), by all standard measures he was a vastly wealthier person than I am. But I would never be even slightly tempted to exchange my current standard of living for the standard of living Hughes had during his life. And 1967 isn’t exactly ancient history. One doesn’t have to look that far back to see how the luxuries of wealthiest people alive a generation or two ago couldn’t even begin to approximate what today is so abundant as to be considered trivial.
If I suggested to someone right now that their grandchildren will have things that are beyond the reach of Elon Musk or Jeff Bezos with all their riches today, they may think that’s a fantastical claim. But it’s a claim that we can accurately make now about ourselves and Howard Hughes, or John Rockefeller, or any other wealthy person from even a generation ago. So the next time you settle down on your couch and log into your Netflix account, take a moment to be grateful that you don’t have to live like Howard Hughes. When you turn your air conditioning on to take the edge off a hot summer day, be grateful that you don’t have to live like John Rockefeller. When you put some antibiotic ointment over a little cut, thank your lucky stars that your medical care is so much better than what was available to the son of President Calvin Coolidge, who died when a blister on his toe got infected. And be grateful in the knowledge that your grandchildren will be thankful that they don’t have to live like Elon Musk or Jeff Bezos live today.
READER COMMENTS
Stephen
Sep 19 2024 at 4:22pm
I gave a short speech to a church group as part of a 2017 stewardship campaign. Below is an excerpt, on the same subject as your blog post. Historians say that the wealthiest person who ever lived was John D. Rockefeller, who at one time controlled 90% of the oil industry. Money Magazine took John D. Rockefeller’s fortune in relation to a much smaller American economy and also adjusted it for inflation. Money Magazine estimated that his wealth would be like having $250 billion today.
John D Rockefeller (Daily Mail / Getty)
100 years ago John D. Rockefeller was 78 years old—by the way he would live another 19 years—but would you trade places with him? He had an army of servants, but here’s a little of what we have and he didn’t:1) We can be in Paris in 11 hours. It would take him a couple of weeks to get to Europe from California by rail and then by ship.2) If any of us had a medical emergency, paramedics would be here in 10 minutes or less. We would be treated by methods that would be infinitely better than were available in 1917 by the best doctors in the world.3) We have the world’s knowledge at our fingertips. No matter how many people John D. Rockefeller had working for him, it would take them hours to research a topic in the Library of Congress and we can do it in minutes. For that matter, we have movies–with sound–and huge music libraries at our fingertips, too.4) I am sure each of us can think of many more examples of progress—about how we can carry on a live conversation with a relative halfway around the world and see their faces, about how we can forecast to the hour when rain is about to start, about how we no longer need to keep a stack of maps in our glove compartment to know where we’re going.When you look at it that way, hundreds of millions of us ordinary folk are each richer than Rockefeller.How much of our wealth is represented by what’s in our bank account, and how much wealth do we have merely because we are alive in this time and this place?
Mactoul
Sep 19 2024 at 10:24pm
Amusing instance in CS Lewis’s That Hideous Strength. Merlin the magician wakes up after a thousand years sleep and goes off to stay in a contemporary upper class house. He then complains — you eat off excellent crockery but your food is insipid. Your bathroom sparkles but there is no slave to bathe him. The bed is soft but no companion to sleep at the foot of it. ( he means his pages not women).
What about the claim that 50 or 70 years ago it was possible for a non-college educated man to support his family with a middle class lifestyle with his paycheck alone?
Now his wife also must work, to the detriment of the family, leading to momentous consequences.
Wealth is the claim upon resources of the community. Rockefeller had a greater claim than a common person even now. He couldn’t have a wi-fi or Netflix but he lived in a great house, interacted with other great men, in short had a great status, which cannot be compared with AC or antibiotics, but is a separate class of its own.
john hare
Sep 20 2024 at 3:56am
You realize that a middle class lifestyle back then was a much smaller house in a one car family? Without air conditioning, microwaves, and a few other minor conveniences. I remember friends with outdoor plumbing and wood stoves as being what was probably middle class back then.
I know several one income families today that are doing alright.
Jon Murphy
Sep 20 2024 at 6:42am
What about it? The same is true today, at least in America.
MarkW
Sep 20 2024 at 7:01am
“Wealth is the claim upon resources of the community.”
No, it’s not just that — wealth consists of being able to consume society’s resource and living in a society with valuable, useful, delightful goods and services. It’s the combination — both factors are necessary. And our society’s resources are so much better than what was available 100 years ago, that you don’t have to be able to claim a very big portion at all to be wealthier than the richest person then.
“What about the claim that 50 or 70 years ago it was possible for a non-college educated man to support his family with a middle class lifestyle with his paycheck alone? ”
I’m old enough to have been a child 50 years ago. Both my parents were college-educated and only my Dad worked until I was in high school. My parents raised 4 children in a 1200 sq ft house with a single bathroom. We had just one car until I was about 10 — which was also about when we got our first color TV and a clothes dryer so my mom could stop hanging laundry (outside during warm weather on lines strung in the basement during cold or rainy weather). We also first got AC about then. All vacations were road trips in our station wagon — none of us kids flew until we were adults and buying our own tickets. We very rarely ate or ordered out. And that was a middle-class lifestyle then, but it certainly wouldn’t even be close now. That said, there are religious people (e.g. Mormons) who believe a mother should stay at home and are willing to live such a comparably ‘meager’ existence in modern times. BTW, my childhood home is on Zillow, and if you adjust the $350K estimate for inflation, you get $35K the year they bought it, which is pretty close to what they paid (and interest rates now are pretty similar — IIRC, their first mortgage was at 5 1/4 %).
“but he lived in a great house”
Without air-conditioning.
“and had a great status”
Why are those pooh-poohing modern wealth always focused on status? Of course status is zero sum, and no amount of development and societal wealth and improvement could ever make it otherwise. But higher status used to be necessary for having enough calories for your family so that your children would reach full height (as the lower classes did not even in the 19th century) and not freezing during winter. Now status has to do with freedom from envy — and there are far better ways to free yourself from envy if you suffer from it.
Jim Glass
Sep 21 2024 at 1:15am
Hey, I grew up in exactly that family! So let’s compare then to today…
My father went from high school to WWII, then came back to marry my mother and get a job. He started at the bottom but did well, was soon on the executive track (many years later, CEO). He and my mom lived in the smallest cottage I’ve ever seen, on a religious retreat campground (not even their religion). They saved their pennies and in about six years were able to buy a very nice plot of land and build their own house on it. Yea. The house had “party line” phone service (a bunch of neighbors sharing one number) and open windows for air conditioning … but they got their own number for their rotary phone soon enough, it really was a very nice house they built, give ’em that. That was where I came in.
Their first car ever (public transport until then) was a 1955 Chevy just like this one. It got 12 miles per gallon (literally) and broke down all the time, but it was a car! (Post-Depression, post-WW2, a new thing!) No air conditioning, of course. But if you look at the picture, you can see the little vents in the front of the front windows one could open to direct a stream of air. No seat belts either (much less car seats). One day as my mother was driving out of a supermarket parking lot I hit the pavement. That was where I almost went out.
Our home entertainment center was the TV, black and white, getting seven channels (in NYC seven! – most of the rest of the USA had two or three) plus AM radio, plus a record player, you know vinyl. Over 15 years the TV became color, FM radio arrived, more vinyl was added to the collection – but that was it. When I was bored there was nothing else electronic, so my mom sent me out to play on my own in the neighborhood, or to ride around town on my bike, or join my gang friends.
And to pay for all this luxury my mom didn’t work at all – on payroll. But I effectively did have two sisters, girls my mother took care of 9-5 on all work days for another woman who was divorced and worked. That was a $$$ job. Plus back then housework was work. No dishwasher. No clothes dryer, clothes were rung out and hung on a line then recovered and ironed, etc. No robot vacuum cleaners, or microwaves, no etc. No remote ordering and delivery (outside of the Sears catalogue) – if the household needed anything it was load the kids in the Chevy then off to buy whatever and lug it back.
(Today’s obesity epidemic is worse among women than men, and worst of all among non-working housewives. This is because the calorie-burning real work they used to do is gone, replaced with watching The View and Drew Barrymore.)
So let’s compare generations…
[] My no-college parents, born with life expectancies of 54, after surviving the Great Depression and World War II, for a half-dozen years (from about the ages of 27 to 33) lived in a furnished shoebox, no car, taking public transit, my dad commuting an hour each way into the city for his job, so they could save all their pennies to build their dream house. Which they did! At age 35 they had the house, with party line phone and B&W TV, and a brat kid and great dog playing in the yard. And they had that Chevy in which to see the world. They did this under constant imminent threat of real Global Warming — 5,000 degrees in 30 minutes, then and for next 35 years (70,000 nuclear weapons in the Cold War.) And I’d guess in 1955 they maybe had the median real family income of about $42,000 (2023 dollars) .
[] Today’s 35-year-olds were born with life expectancies of about 75, have enjoyed lifetimes of historically unique peace and prosperity (let’s not compare 2008 to the Depression and World War II), enjoy cars, phones, and multitudes of forms of entertainment such as my parents at that age could never have fantasized, lament that their lives are threatened by global warming of 4 degrees over 80 years – but not enough for them to do anything noticeable about it, show few visible histories of having lived frugally for significant periods of time to save to fund their current lives, and complain that they can’t live on real median family income of $100,800 (2023).
So as to them … they deserve a song of their own!
nobody.really
Sep 20 2024 at 12:18pm
What if my grandkids are a bunch of insufferable, ungrateful snits, and the idea that they’ll be living in the lap of luxury fills me with rage? I can only dream of living with the the advantages of those long past, who might have had no knowledge about the abundance that would rain down upon future generations.
In a world where ignorance is bliss, Kevin, you’re a regular Roko’s Basilisk. Thanks for nuthin’.
MarkW
Sep 20 2024 at 12:51pm
I can only dream of living with the the advantages of those long past, who might have had no knowledge about the abundance that would rain down upon future generations.
Advantages such as few of your children living to adulthood? This is really one of your worst all time takes.
Dylan
Sep 20 2024 at 5:37pm
All of the things you mention are great. And I think I’d have a hard time and be unhappy if I was suddenly transported back in time and had to do without, but retained my memories of how things currently are. Yet, in the same way I’m not filled with angst over all of the future entertainment, conveniences, and even health improvements that I’m missing out on today, I suspect the people in the past were also not that concerned. We don’t know enough to miss the things that we can’t even properly imagine.
All in all, I’m not convinced that Howard Hughes would envy me, even if he was given a glimpse of the future and was given the chance to live there or continue in his own time, I suspect most of us are the same and would choose our own time. And, that’s not even crazy. Hedonic adaptation seems like a pretty powerful force in humans and the evidence is pretty mixed on whether any of the many, many advancements in our material well being makes us happier in the long run.
Robert EV
Sep 21 2024 at 1:36am
Howard Hughes chose to do movies that Rube Goldberg way. He could have had movies and shows, on demand, a lot cheaper and a lot higher quality with a projector-based home theater and a hired servant to run it and switch out the reels. Perhaps the TV station paid for itself though, allowing him effectively free use?
When I personally think back to all of the entertainment I’ve watched over the years, the live theater and music experiences are the best. That’s something I have in common with some who lived a thousand or more years ago.
Warren Platts
Sep 21 2024 at 8:37pm
These sorts of articles bug me to no end. They can be summarized in a single line: “Quit yer complainin’ ya querulous ingrate! Ye oughta be glad ya get half a loaf!”
The idea of course is to pooh-pooh rampant income and wealth inequality because after all a person living in poverty in 2024 USA is better off than John D. Rockefeller!
Speaking for myself, I’d trade places with J.D. Rockefeller any day. (Well, not in the sense that I’d be able to run his empire as well as he did. I’d screw it up for sure.) But just in terms of his lifestyle, it was grand by any measure. His multiple mansions were way fancier than any upper middle class person in the U.S. now lives in. If it was too hot, he could travel to where it was cool in the summer. If he couldn’t fly om an overcrowded airliner, he’d take a personal train or travel above first class on the finest ocean liners. If he couldn’t have live video calls, he could send a telegram anywhere in the world and expect an answer the same day. If he didn’t have Netflix, so what, he could see the finest operas live anytime he wanted. His food was better than ours on average I’d have to guess. As for healthcare, he made it to 97 — way above the U.S. life expectancy.
(Rockefeller was also a great philanthropist: among many other projects, he pretty much single-handedly established the University of Chicago. To be sure, Rockefeller destroyed a lot of people to get where he was. In his later years, I think he had a guilty conscience and that explains the philanthropy. He was truly worried that although he had gained the world, he was afraid might have lost his immortal soul..)
john hare
Sep 22 2024 at 3:58am
One of the things that bug me is people that talk about how great it was. Another is those that focus on inequality as if destroying the wealthy would somehow help the poor. Envy of their yacht misses that many in the world are envious of your Nissan.
I am grateful to live in these times even if I’m not in the top 10%. Though contrary to the article, I am not envious of the people a few generations from now. Actually, I’m not even envious of those billionaires with thousands of times my net worth even when I would like to have some of that wealth for myself.
Robert EV
Sep 24 2024 at 2:26pm
I just read a comment of an ad in Ohio with a mother saying she’d never imagined her daughter would have fewer rights than her. This is obviously regarding abortion. When taken into the past there were rights such as freedom to migrate or to homestead that are either much more constrained now, or have been abolished entirely. The abrogation of some of these rights is what has facilitated economic and inventive progress.