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Is this a conflation between wealth and standard of living?

by joshvm 7y ago

snowwrestler 7y ago
I think the point is, you have to conflate them more and more the farther back in time your inflation calculation tries to go. Some things are pretty much the same today as they were 200 years ago, like land or a person's time. Relative wealth--relative to your surrounding society--allows you to buy those. That was true 200 years ago, and it's true today, although it might cost you a bigger pile of nominal currency (e.g. more British pounds) today than back then. But no amount of wealth in the early 1800s could have bought you a 6-hour journey from London to New York, NY. Whereas, today it is something that many people can afford, at least occasionally. No amount of money in the 1800s could have bought you high-fidelity recordings of all Beethoven's works that you can carry with you anywhere on your wrist. So which category better represents inflation since the early 1800s? In terms of things you could buy back then, like land or people's time, you can do a pretty straight calculation. But when you get to brand new categories of things to spend money on, like penicillin or an electric scooter trip, you're essentially "dividing by zero" because these things did not exist at all back then. You have to invent some sort of way to value a thing in past dollars that could not have actually existed at that point in the past. The farther back you go, the more it just becomes guesswork.
conjectures 7y ago
If you think this is a conflation, perhaps you could explain how and why they shouldn't be?
- joshvm 7y ago
  Standard of living is a function of wealth, but wealth is not the sole factor. It also includes quality of the environment, crime levels, access to good medical care, education standards, civil rights, house affordability and so on. Most people nowadays are poorer than Mr Darcy in a monetary sense, but probably have a higher standard of living. The sibling post makes the point that in the past, being wealthy was a much bigger component of this - if you're rich you can afford a doctor (versus none), you can eat when others go hungry, you can afford to travel at all, you can be educated, etc. As I understand it, standard of living is objective - you can quantify it fairly well. Quality of life is subjective.
  - conjectures 7y ago
    What does it mean to be 'poorer in a monetary sense' if it leads to comparisons where person A has better healthcare, transportation, information access etc than person B but B > A? Your comment focuses on standard of living issues. But your earlier claim was that these are separate from 'monetary wealth'. I think you would need to specify what 'monetary wealth' is separate from 'standard of living' in order to make a convincing argument. You'll find this hard to do, because any wealth measurement is either a thing, or an instrument that will get you a fraction of the things other people have. Financial wealth is cashed out in stuff. So cross temporal comparisons are going to involve comparing the stuff two people can command. And the stuff they can command is embedded in the technology and society of their respective times.

Is this a conflation between wealth and standard of living?

by joshvm 7y ago

Is this a conflation between wealth and standard of living?

I think the point is, you have to conflate them more and more the farther back in time your inflation calculation tries to go. Some things are pretty much the same today as they were 200 years ago, like land or a person's time. Relative wealth--relative to your surrounding society--allows you to buy those. That was true 200 years ago, and it's true today, although it might cost you a bigger pile of nominal currency (e.g. more British pounds) today than back then. But no amount of wealth in the early 1800s could have bought you a 6-hour journey from London to New York, NY. Whereas, today it is something that many people can afford, at least occasionally. No amount of money in the 1800s could have bought you high-fidelity recordings of all Beethoven's works that you can carry with you anywhere on your wrist. So which category better represents inflation since the early 1800s? In terms of things you could buy back then, like land or people's time, you can do a pretty straight calculation. But when you get to brand new categories of things to spend money on, like penicillin or an electric scooter trip, you're essentially "dividing by zero" because these things did not exist at all back then. You have to invent some sort of way to value a thing in past dollars that could not have actually existed at that point in the past. The farther back you go, the more it just becomes guesswork.

conjectures 7y ago

If you think this is a conflation, perhaps you could explain how and why they shouldn't be?

joshvm 7y ago
Standard of living is a function of wealth, but wealth is not the sole factor. It also includes quality of the environment, crime levels, access to good medical care, education standards, civil rights, house affordability and so on. Most people nowadays are poorer than Mr Darcy in a monetary sense, but probably have a higher standard of living. The sibling post makes the point that in the past, being wealthy was a much bigger component of this - if you're rich you can afford a doctor (versus none), you can eat when others go hungry, you can afford to travel at all, you can be educated, etc. As I understand it, standard of living is objective - you can quantify it fairly well. Quality of life is subjective.
- conjectures 7y ago
  What does it mean to be 'poorer in a monetary sense' if it leads to comparisons where person A has better healthcare, transportation, information access etc than person B but B > A? Your comment focuses on standard of living issues. But your earlier claim was that these are separate from 'monetary wealth'. I think you would need to specify what 'monetary wealth' is separate from 'standard of living' in order to make a convincing argument. You'll find this hard to do, because any wealth measurement is either a thing, or an instrument that will get you a fraction of the things other people have. Financial wealth is cashed out in stuff. So cross temporal comparisons are going to involve comparing the stuff two people can command. And the stuff they can command is embedded in the technology and society of their respective times.