Class 9 - Pie Charts are Your Friends

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).

Class 8 - We're Richer and Better Off....and cancer is good?

Today we continued on our journey through the world of power point.

First we talked about how we are better off today than we were in the past. In terms of life expectancy, people are expected to live half a year longer than the people born a year before them. From ancient times until the industrial revolution, people only gained a few days each year, if that. Also, less senior citizens have diseases and less people are getting and dying from cancer. All of this data on the increase in life expectancy, along with a sharp decrease in infant mortality since medieval times, shows our socio-economic progress.

We then talked about nutrition and intelligence. Our caloric intake between the industrial revolution and today has increased by about 50%. Through techno-physio evolution we see that people are healthier and a lot taller. We then discussed how our intelligence is increasing.

We then talked about the increase in living standards. We first talked about the labor market and how household labor hours has decreased, retirement has greatly increased, and more women are working. Women actually make more money than men...until they have kids. We also talked about household amenities and how basically, 100 years ago, no one had them. Rizzo then decided cancer is a good thing because it shows progress - there are more things out there that can kill us. And finally we discussed productivity multiples. These show that we need to work a lot less to afford products we had 100 years ago. However this doesn't think about the functionality of the products. Yes we need to work say 1/12 as much to afford a comfy chair, but this would a 19th century good. Today we are so much better off because the materials we have are better. Also I am not necessarily paying for the chair, but rather something to sit on, the function it provides.