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Christmas 1964 vs. 2014
We hope our readers and their families are enjoying the holidays, some time together, and maybe even a few of the high-tech toys found at the bottom of the accompanying picture.
This comparison of Christmas 1964 vs. 2014 (courtesy of AEI) shows there is no comparison thanks to “the magic and miracle of the marketplace.”
(An) American consumer or household spending $750 in 1964 would have been able to purchase the 21-inch color TV/entertainment center from the Sears Christmas catalog pictured above (includes phonograph and AM/FM radio). An American consumer spending that same amount of inflation-adjusted dollars today (about $5,600) would be able to furnish their entire kitchen with 5 brand-new appliances and buy 7 state-of-the-art electronic items for their home. And of course, even a billionaire in 1964 wouldn’t have been able to purchase many of the items that even a teenager can afford today, e.g. laptop computer, GPS, iPhone, digital camera.
As much as we might complain about a slow economic recovery, the decline of the middle class, stagnant median household income, rising income inequality and a dysfunctional Congress, we have a lot to be thankful for, and we’ve made a lot of economic progress in the last 50 years as the example above illustrates, thanks to the “magic and miracle of the marketplace.”
The “miracle” has a name – productivity – and it works its “magic” while swimming upstream against those that fight it. It’s constantly improving products, reducing costs for everyone, and creating the new technologies and conditions that make other before-their-time ideas suddenly viable.
It’s a good thing to keep in mind the next time productivity is made the boogeyman for job losses. As the old story goes, you can employ more workers if you give them spoons instead of shovels (or bulldozers).
Just as important: as $5,000 computers become $500 tablets the resulting surplus capital becomes a source of both (a) demand for even more new products and (b) investment for new ideas and entrepreneurs.
