In class today we discussed more about productivity multiples. We touched again on the functionality of goods and how we don't consume the good, say the comfy chair, but rather its function.
We then discussed how we do a lot less market and non-market work today, creating more leisure time. Then came the pie charts to prove this.
The pie charts showed what percentage of our time and money is spent on various things in 1790, 1900, and 2005. The 1790 chart showed that 91% of time and money was spent on basic necessities (i.e. food, shelter, clothes). The 1900 chart showed some growth with only 72% spent on necessities, but there was the introduction of leisure time and recreational activities. Finally the 2005 chart showed that today we only spend 38% on necessities and have created so many other parts of the pie. Between 1900 and 2005, we see that half as much is spent on necessities and we are also 7 times richer; this shows that we are actually 14 times richer than a hundred years ago.
We saw that income understates economic growth. And that things don't matter, but it's the service that those things provide. Living standards doesn't show the availability, capability, quality, conveniences, or safety of goods.
We then compared America to the world. We spend $1.2 trillion on military - that is the GDP of Australia. We then saw that 5% of Americans are still richer than 70% of the world. We saw that income has increased for the whole world, and that the rich are getter richer but not at the expense of the poor.
We then finally looked at car safety and how deaths have stayed the same, but deaths per million show a great decrease. (BTW. 1970's had an increase in car deaths because the drinking age was lowered between 1970 ad 1975).
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