WORK LESS, OWN MORE, STOP COMPLAINING :

In response to a post below about how thoroughly the U.S. economy has outperformed Europe, several folks questioned whether our economy was really that superior and why they don't feel better off than their parents. Here's a really good essay about how such progress should be viewed :
THE NEW WEALTH OF NATIONS (Christopher DeMuth, Summer 1997, Center for Independent Studies)

That we have become very rich is clear enough in the aggregate. That we have become very equal in the enjoyment of our riches is an idea strongly resisted by many. Certainly there has been a profusion of reports in the media and political speeches about increasing income inequality: the rich, it is said, are getting richer, the poor are getting poorer, and the middle and working classes are under the relentless pressure of disappearing jobs in manufacturing and middle management.

Although these claims have been greatly exaggerated, and some have been disproved by events, it is true that, by some measures, there has been a recent increase in income inequality in the United States. But it is a very small tick in the massive and unprecedented leveling of material circumstances that has been proceeding now for almost three centuries and in this century has accelerated dramatically. In fact, the much-noticed increase in measured-income inequality is in part a result of the increase in real social equality. Here are a few pieces of this important but neglected story.

First, progress in agriculture, construction, manufacturing, and other key sectors of economic production has made the material necessities of life - food, shelter, and clothing - available to essentially everyone. To be sure, many people, including the seriously handicapped and the mentally incompetent, remain dependent on the public purse for their necessities. And many people continue to live in terrible squalor. But the problem of poverty, defined as material scarcity, has been solved. If poverty today remains a serious problem, it is a problem of individual behavior, social organization, and public policy. This was not so 50 years ago, or ever before.

Second, progress in public health, in nutrition, and in the biological sciences and medical arts has produced dramatic improvements in longevity, health, and physical well-being. Many of these improvements - resulting, for example, from better public sanitation and water supplies, the conquest of dread diseases, and the abundance of nutritious food - have affected entire populations, producing an equalization of real personal welfare more powerful than any government redistribution of income.

The Nobel prize-winning economist Robert Fogel has focused on our improved mastery of the biological environment - leading over the past 300 years to a doubling of the average human life span and to large gains in physical stature, strength, and energy - as the key to what he calls `the egalitarian revolution of the 20th century' (here and elsewhere I draw heavily on Fogel, forthcoming). He considers this so profound an advance as to constitute a distinct new level of human evolution. Gains in stature, health, and longevity are continuing today and even accelerating. Their outward effects may be observed, in evolutionary fast-forward, in the booming nations of Asia (where, for example, the physical difference between older and younger South Koreans is strikingly evident
on the streets of Seoul).

Third, the critical source of social wealth has shifted over the last few hundred years from land (at the end of the 18th century) to physical capital (at the end of the 19th) to, today, human capital - education and cognitive ability. This development is not an unmixed gain from the standpoint of economic equality. The ability to acquire and deploy human capital is a function of intelligence, and intelligence is not only unequally distributed but also, to a significant degree, heritable. As Charles Murray and the late Richard J. Herrnstein argue in The Bell Curve, an economy that rewards sheer brainpower replaces one old source of inequality, socioeconomic advantage, with a new one, cognitive advantage.

But an economy that rewards human capital also tears down far more artificial barriers than it erects. For most people who inhabit the vast middle range of the bell curve, intelligence is much more equally distributed than land or physical capital ever was. Most people, that is, possess ample intelligence to pursue all but a handful of specialized callings. If in the past many were held back by lack of education and closed social institutions, the opportunities to use one's human capital have blossomed with the advent of universal education and the erosion of social barriers.

Furthermore, the material benefits of the knowledge-based economy are by no means limited to those whom Murray and Herrnstein call the cognitive elite. Many of the newest industries, from fast food to finance to communications, have succeeded in part by opening up employment opportunities for those of modest ability and training - occupations much less arduous and physically much less risky than those they have replaced. And these new industries have created enormous, widely shared economic benefits in consumption; I will return to this subject below.

Fourth, recent decades have seen a dramatic reduction in one of the greatest historical sources of inequality: the social and economic inequality of the sexes. Today, younger cohorts of working men and women with comparable education and job tenure earn essentially the same incomes (Furchtgott-Roth and Stolba 1997). The popular view would have it that the entry of women into the workforce has been driven by falling male earnings and the need `to make ends meet' in middle-class families. But the popular view is largely mistaken. Among married women (as the economist Chinhui Juhn has demonstrated), it is wives of men with high incomes who have been responsible for most of the recent growth in employment.

Fifth, in the wealthy Western democracies, material needs and desires have been so thoroughly fulfilled for so many people that, for the first time in history, we are seeing large-scale voluntary reductions in the amount of time spent at paid employment. This development manifests itself in different forms: longer periods of education and training for the young; earlier retirement despite longer life spans; and, in between, many more hours devoted to leisure, recreation, entertainment, family, community and religious activities, charitable and other nonremunerative pursuits, and so forth. The dramatic growth of the sports, entertainment, and travel industries captures only a small slice of what has happened. In Fogel's estimation, the time devoted to nonwork activities by the average male head of household has grown from 10.5 hours per week in 1880 to 40 hours today, while time per week at work has fallen from 61.6 hours to 33.6 hours. Among women, the reduction in work (including not only outside employment but also household work, food preparation, childbearing and attendant health problems, and child rearing) and the growth in nonwork have been still greater.

There is a tendency to overlook these momentous developments because of the often frenetic pace of modern life. But our busy-ness actually demonstrates the point: time, and not material things, has become the scarce and valued commodity in modern society.

There are few more specious complaints in American life than the Democrats mantra that middle class living standards have declined. Posted by Orrin Judd at July 2, 2002 7:54 AM