Wake Up and Smell the Economy

Did you know that most people make economists so mad? It’s not because people are irresponsible with their money or anything like that. It’s because no matter how good things are, people still claim that society is on its way to Hell, like a nation of door-to-door evangelists.

Every step of the way we look back fondly. The 1960s are often referred to as the economic “Golden Age” where everything was perfect and life way so easy. Starting in 2008, the national shopping spree was called off in the United States and everyone agreed that times were tough. Even though nearly any economic measure our quality of life was superior then to what it was in the Golden Age, journalists still referred to that period as The Great Recession. For a bit of fun, let’s compare lifestyles of the The Great Recession with lifestyles of The Golden Age. During The Great Recession we consumed close to 2x the energy per capita. We built 3x more floor space per person in new homes. We flew 7x the flights per person and we owned 1.6x the cars per worker. And those cars all had air conditioning.

But, times sure do look tough through the windshield of a Lexus.

A five speed blender was a luxury item in 1963 at $247.53 US (325.51 CAD) in today’s dollars. A microwave with a twenty-five minute timer and a signal bell in 1977 was sold for $269.95, which would be like spending $1013.71 US (1333.06 CAD) today, plus tax. Today, better versions of these devices are available for free in a back lane near you.

If you look farther back, you really start to see how things ain’t half bad economically these days. Two thousands years ago, not very long ago in human history, you would have needed to work 50 hours to pay for the luxury of a single hour of light from a sesame oil lamp. Today it takes around half a second to earn enough to pay for the same amount of light. That’s prosperity.

You have a chance of convincing a middle class person to take their dog to a certified dog chiropractor these days. That’s prosperity.

We live in a throwaway culture, not a hoarding culture, but the self-storage industry is still exploding out of nowhere. That’s prosperity too.

Our poor people have TVs, folks.

Luxuries become needs

“I need to fly to Vancouver”, said no middle class Torontonian in the 1960s.

Today, the temperatures our recent ancestors lived with indoors are illegally low in rental units (In Toronto and Winnipeg the minimum legal temperature is 21 degrees Celsius, which is t-shirt weather in the winter). We have become laughably sensitive to temperature in our homes. Long underwear and sweaters are no longer a reasonable solution to winter cold.

We have running water, electricity and even toilet paper these days. That’s more than many of our grandparents could say about their upbringings. Not only do we have these things, but they aren’t considered luxuries anymore. They aren’t even considered nice-to-haves. They are considered basic needs.

Basic need: Food

There was a day when many would have raised an eyebrow when a middle class person spent as much on a latte as they would need to feed a family of three for the day. Below is a recipe for a rice and lentil meal that’s synonymous with “food” in Nepal -- breakfast, lunch and dinner there. It covers your nutritional bases, tastes pretty good and an adult on this diet eats for $10 a week, one hour of work at minimum wage.

Dal Bhat (translates to “Lentils Rice”)

Rice

2 cups rice
4 cups water

Lentils

1½ cups lentils
4 cups of water
½ tsp turmeric
1 tsp garlic, minced
3/4 cup sliced onions
2 chilies
Salt (to taste)

Rice:

1. Put rice and water in a pot and bring to boil
2. Reduce temperature so that it’s just barely boiling and cook for 20 minutes.
   

Lentils:

1. Soak lentils in water for 10 minutes.
2. Drain water.
3. Add fresh water and bring to a boil.
4. Add the spices.
5. Reduce heat and cook for 20 to 30 minutes until lentils are soft.
6. Optional: In a small pan, fry the onions, chilies and garlic. Then put it all into the lentils and cook for a few minutes more.

Basic need: Shelter

More Canadians are living alone than ever before in history. This is a formerly luxurious way to live. We have unprecedented expectations of privacy, whether that’s having our own house or summer cabin, or just our own room. Canadians enjoy 2.5 rooms per person in an average home. That’s a lot of space to ourselves.

It’s only university aged kids who are willing to live with their friends in shared houses, by far the cheapest way to live in Canada. (It is also mostly young people who are willing to hitchhike and live without a car. It’s expensive to appear to be a mature adult, living the grown-up way, filling fake grown-up needs.)

On the edges of our La-z-Boys

Our GDP per capita is about 3x higher now than it was in 1960, adjusting for inflation. Our GDP per hour we work is well over 2x higher now than in the 1960s. How should we respond to such abundance? The obvious answer has nothing to do with digging our nails into the walls of an imagined economic pit and pretending we are poor. We could shift to the edges of our La-z-boys and wait for the Chinese take-over. But we could also be a generous nation and help those less fortunate. There is also no short term need for us to be sacrificing clean air, clean water and other natural resources that might come in really handy in the future. It would be classy to hand them over to future generations intact. Most of all, we can relax, knowing that there is enough… and that there’s always lentils.