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I suspect it's because inflation has been underestimated for the past ~hundred years. Over time, that really compounds. A fairer way to look at it is how man
by londons_explore 3y ago
I suspect it's because inflation has been underestimated for the past ~hundred years. Over time, that really compounds.
A fairer way to look at it is how many years of the average citizens salary is it.
The manhattan project was $2B in 1944, or 121,000 median-family-years of work using salary figures from the 1940 census.
Apples stock buyback was $110B in 2024, or 122,910 median-family-years of work using figures from the 2022 census.
So, the inflation figures under represent the cost by a factor of 3.5 over those 80 years.
- MattGaiser 3y agoAverage family has a ton more in material goods, both in quality and quantity. So it isn’t that inflation is underestimated. The average family truly is richer. Far more house. Far more car. Far more and better food.
- chimpanzee 3y agoQuantity? Absolutely. Quality? That’s debatable; it’s highly dependent on the goods in question and how quality is measured.
- bawolff 3y agoJust because something is higher quality does not mean it has higher subjective value. E.g. i still think i come out ahead with cheap clothes and a laptop then someone 100 years ago with higher quality clothes.
- coffeebeqn 3y agoI’d rather have a house than shitty fast fashion but your mileage may vary
- edmundsauto 3y agoA better comparison would be this: would you rather have 3 suits that you wore everyday that cost a months wages, or 30 shirts and pants that cost a weeks wages but are lower quality. (Also, IMO, houses today are much higher quality than in the past as soon as you account for safety)
- ornornor 3y agoThe answer differs whether you answer it selfishly or with the greater good in mind (resource use/waste, pollution, etc)
- eru 3y agoIf you can find a neighbourhood that's as dangerous and unsafe as those a hundred years ago, the house would be very cheap compared to GDP per capita.
- astrange 3y agoProbably don't want a common house from 1924 with lead paint, an indoor wooden stove for heating and an outhouse.
- jhbadger 3y agoAlso average houses from that time period were tiny, with about ~1000 sq ft of livable space. That people were expected to raise families in. My apartment (which is just for me and my cat) is bigger than that! https://www.newser.com/story/225645/average-size-of-us-homes-decade-by-decade.html https://www.newser.com/story/225645/average-size-of-us-homes...
- deleted 3y ago[deleted]
- throwup238 3y agoI think you're underestimating the technological development in the last 80 years to a comical degree. In 1944, half the country didn't have flush toilets!
- bombcar 3y agoAnyone who does serious work with ancient technologies knows both that the older stuff was much more repairable but also needed to be repaired much more often. Material and building science has advanced a mind boggling tremendous amount - even modern toilets are significantly better than an actual un-upgraded 40’s - if you can find it. At the same time we can mass manufacture endless cheap plastic shit.
- eru 3y ago> At the same time we can mass manufacture endless cheap plastic shit. You say it like that's a bad thing.
- amarant 3y agoGood or bad are subjective, but "endless cheap plastic shit" certainly does lower the average quality of goods available today.
- eru 3y agoWhat do you care about the overall average quality? You don't need to buy them. You only need to worry about perhaps the average of the things you buy.
- bombcar 3y agoExactly - what most people are really complaining about when they say everything is crap these days is that other people make different decisions about purchasing, or that they wish they were forced to buy the higher quality item. It is a bit annoying to have to search and find high-quality items, but it's still doable.
- maratc 3y agoOne thing that might be missing from your calculation is that "one median-family-year of work" meant "about one person working" in 1940 but means "about two persons working" in 2022.
- mgiampapa 3y agoIt's also discounting workplace efficiency gains. Both white and blue collar jobs are far more efficient than ever before.
- maratc 3y agoOTOH, an interesting point is that the Manhattan project cost 0.4% of GDP in 1940, and Apple buyback ($110B) is 0.4% of 2023 GDP ($27T).
- pmontra 3y agoApple gets its money from all around the world, so every country pays a part of those buybacks. The USA in 1940 were a smaller empire than they are now so, I might be wrong, but the Manhattan project money came mostly from inside the country. This means that it's easier for Apple to find and spend those money than it was for the USA in 1940.
- ralfd 3y agoPopulation of US was also only 132 million in 1940. Today it is 333 million.
- Retric 3y agoThe difference isn’t quite that large as many households are just single people and while the female labor force participation rate increased (34% 1945 vs 57% now) the male labor force participation rate declined ( 83% 1948 vs 68% now). https://fred.stlouisfed.org/series/LNS11300001 https://fred.stlouisfed.org/series/LNS11300001 Similarly there where a great deal of households in the 1940’a with two working adults.
- moneywoes 3y agois median family income a good measure since it represents the cost of R&D?
- scrlk 3y agoIn 1944, the USD was pegged to gold at $35/troy oz. The current spot price of gold is $2300/troy oz. 1 troy oz of gold in 1944 = 1 troy oz of gold in 2024. This gives the price of the Manhattan Project as $131 billion in 2024 dollars.
- noxvilleza 3y agoNot sure if this is that good of a metric given that I've read before that in recent history, precious metals have much higher demand where there is crisis and instability - and 1944 is certainly one of the peaks for that. I guess since 2023 it's also been quite a peak.
- chaostheory 3y agoIt’s a great metric at the moment for the reasons that you’ve given. We are living in a period of crisis and instability. Just like in that time, we are close to yet another global war. The difference is whether or not nuclear weapons will keep things from further escalating.
- eru 3y ago> We are living in a period of crisis and instability. What? We are living in a golden age of unprecedented peace and prosperity. By and large, people never had it so good.
- richk449 3y agoIt was the best of times, it was the worst of times.
- Dalewyn 3y agoThe west (and some tag-alongs like Japan) is living in a golden age of unprecedented peace and prosperity. The world at large has other ideas, especially continental Asia and the Middle East where people seemingly can't stop brutally killing each other.
- hn_throwaway_99 3y agoI understand what you're getting at, but equating wage inflation with price inflation would be a mistake that would lead to some nonsensical results. That is, if you only look at wage inflation, it would mean that you can never factor in productivity improvements to how much more people can buy with their money.
- fulafel 3y agoAlso lots of the project ingredients were not really market commodities. There could have been a lot more exchange of money involved if eg there had been a market for weapons grade uranium/plutonium or moon rockets and staff had been paid FAANG salaries. (There's of course a big opportunity cost in employing the best physicists and biggest r&d investments in nukes - eg solar energy and grid storage could have been here decades earlier in an alternative scenario.)
- roenxi 3y agoThat seems to subtly assume that a century of technological progress hasn't changed the value of what a family can produce. That is pessimistic given that computers were maybe the greatest leap forward in technology related to engineering design. A Manhattan project should be much more achievable today than it was in the WWII era.
- littlestymaar 3y ago> So, the inflation figures under represent the cost by a factor of 3.5 over those 80 years. But this is not inflation per se, it's what's counted as “economic growth”: the median family in 1940 had a much lower standard of living than the one in 2024. But of course sorting what's inflation and what's relevant economic growth is highly subjective: some things like cars and housing have literally inflated (they are enormous now compared the what they looked like even 40 years ago) and that's usually counted as economic growth, but is it really? In some way it is: having a bigger house is nice. But in other way it's not: do you really need that much space when you're older and the children left long ago? And sometime it's actually a net loss: living 30 kilometers away from work and depending on a car for everything is not a gain. Same for electronics: computers are much, much faster than they used to be in 2000, so the statistics counts that as economic growth. And it is, you couldn't do modern AI on 2000 hardware, or physics simulations for industry and all. But at the same time, for the average consumer, the gain in speed has been eaten by software consuming more and more resources. Sometimes from sheer laziness (there's literally no reason for Windows to be this slow) but sometimes it's a bit more ambiguous: today's video games couldn't run on hardware from 20 years ago, and I remember being very happy to see the graphics improve during my teenage years so it's not entirely pointless. But at the same time, it's not as if video games were more fun or enjoyable now than they were 20 years ago: the consumer surplus from video games is basically the same no matter the quality of the graphics, so maybe it shouldn't be counted as growth at all. The measure of “real” economic growth (and the measure of inflation) depends a lot on how you weight these things (it's called “hedonic adjustment”) and as we've seen, it's very difficult, and fundamentally subjective. And I wish statistics agency provided a measure of CPI without hedonic adjustment in addition to regular CPI (like they already do multiple variants of CPI depending on the basket of goods that's taken into account).
- SideQuark 3y agoMeasuring inflation by salary is misguided, since real wages are not fixed as is clearly demonstrated by an honest rise in purchasing power. Food is a much smaller portion of income is a trivial way to see the dramatic changes. Inflation is not underestimated by a factor of 3.5 over that time, as can be checked by nominal prices of a suitable basket of goods, which is the definition of inflation.
- randomdata 3y agoExcept food is less valuable than it once was thanks to changes in production techniques being able to produce a whole lot more of it for a fraction of the cost. Ideally, inflation only observes the change in value of the currency. Easier said than done, of course.
- SideQuark 3y ago> Except food is less valuable than it once was thanks to changes in production techniques being able to produce a whole lot more of it for a fraction of the cost. There is no "except." This is central to inflation definition and econometrics. As a result the average budget spends less on this component. Inflation tracks a basket of goods of what people currently buy, then compares that to neighboring adjusted baskets. For example, we don't buy as many horses and buggies any more, so that component of the basket has phased out. Electronics has phased in. > Ideally, inflation only observes the change in value of the currency. Not really, since different goods do not always correlate in price, so there is no "value of the currency". There are values of goods priced in a currency, which do not move in lockstep. Inflation is defined as the general rise in prices, and in this case is precisely measured relative to (several) baskets of goods obtained by statistical sampling of the US population. All the precise methodology, data, sampling methods, etc., are all easily found on the BLS website.
- randomdata 3y ago> Inflation tracks a basket of goods of what people currently buy Exactly. If there was no except, you could just peg inflation to an apple and be done with it. You need the basket exactly to filter out the noise that occurs when the goods in the basket see an independent change in value. Food is unquestionably less valuable today as compared to most of the past, irrespective of the change in value of the currency. > Not really, since different goods do not always correlate in price Exactly. That is because everything has its own independent value, including currency, which change over time independently. Let's say you can buy an apple for $1 today. But tomorrow a damaging storm decimated the apple crop. Now it takes $2 to buy an apple. Did the price rise because apples are now more valuable, or because the dollar is less valuable? Who knows? It is impossible to know. But if you look at the change across many items... > Inflation is defined as the general rise in prices Exactly. The general rise in price is the value of the currency declining. It is statistically improbable for all the items in a basket of goods to gain in value at a similar rate all at the same time. As such, you can conclude with near certainty that the rise in price is a result of the decline in value of currency. As it pertains to the above, if a general rise in price over a given period is 25¢, while apples are up $1 over the same period, then you can reasonably surmise that the storm caused apples to become 75¢ more valuable than the previous state with the other 25¢ being a decline in the value of the currency. There is no perfect way to measure the change in value of currency, but that's a really good way to do it. Which is why we do it.
- lumost 3y agoAs economies develop, goods become cheaper and services become more expensive. If you visit rural Peru, a massage is roughly the same price as two gatorades - or 3 liters of clean drinking water. Shoe shining is 1/10th the price of a 1 liter bottle of clean water. Contrast this with the US where a service like a massage would be >100x more expensive than a liter of clean drinking water. The same pattern holds true with other services such as shaves/haircuts etc.
- littlestymaar 3y agoYup, and it's called “Baumol's Cost disease”.