Everything is fine · 2:46am Oct 20th, 2014
The crime rate in the United States, and indeed, most of the developed world has been plummeting since the early 1990s, with a 50%+ decline across the board, from property crime to murder.
Globally, the rate of death from infectious disease has plummeted over time; the present-day Ebola outbreak in West Africa has killed about a fifth as many people as die of the flu in the United States alone every year.
The number of deaths in wars worldwide have been falling dramatically; even since the 1980s, the per capita death rate from war has declined by over 90%.
People are living longer, healthier lives than ever before, and we are growing increasingly wealthy, both as individuals and as people on the whole; the global GDP has continued to rise, and every one of us has within our home a computer which acts as a television, typewriter, telephone, radio, encyclopedia, library, reference manual, and numerous things which simply didn't exist or were accessible in the past. A computer today is faster and more useful than the best supercomputers in the world 20 years ago, and you carry around in your pocket a device which has more computing power than entire rooms full of millions of dollars worth of equipment did in the 1960s.
Not thirty years ago, sodomy was illegal in much of the world; today, gay marriage is legal in 15 countries and in over half of the United States, and will likely be legal everywhere here soon.
So when you hear about how awful the world is, remember: it was much worse 20 years ago than it is today. And it will probably be much better than it is today 20 years from now.
Things may not be perfect, but no matter how much the world may seem to be closing in around you according to the news, remember: on the whole, everything is fine, and getting better.
Too bad this news isn't what we see in the papers or on the telly. Perspective like this is far more valuable than the fear-mongering and misery porn we see in the news that leads so many people of today to think things are getting worse.
bhstudios.org/_img/decor/EIFNIR.png
2544668
Well, the Golden Age fallacy has existed since Ancient Greece, when they held that there once was a golden age long ago, when everything was better, and things have all gone downhill since then. Naturally, over the last several thousand years, things have continually gotten better on the whole for humanity, even while many people complained about the good old days and how things were better when they were young, or in the days when people were good and moral, unlike these modern hooligans.
The news today merely is an extension of that, with the added benefit of making money by getting people worried and glued to their TV sets waiting for the latest news of some horrible disaster or some made-up controversy or incident which can change the world as we know it, right after this commercial break.
2544674
By definition, to most individuals, it does matter how the world is doing; after all, the world is just made up of over seven billion individuals. Thus, if the world is doing better on the whole over time, then the majority of people on the planet must be doing better on the whole over time.
For reference, the deleted post was:
2544694
Correction: To most people for whom it seems like the world is closing in around them, I don't think it matters how the rest of the world is doing.
Well... on one hand, most folks around me think the world is getting worse, and they're wrong in the ways you describe.
But ya gotta watch what you say about GDP around me. I am getting pretty tired of people saying that we're doing well because GDP is increasing. The way that GDP increases in the US may be bad for most Americans.
Inflation-adjusted US GDP, as calculated by the BEA, adjusting for inflation using their consumer price index (CPI), has grown by a factor of 12 since 1970. But GDP is deceptive for many reasons:
- Inflation adjustment is more philosophy than science.
- US wealth has grown much, much more than GDP. Most wealth is in ownership, not productivity. Also, a very large amount of wealth seems to have been magically created by complex financial derivatives. It isn't even possible to say for sure anymore that we know how much money there is in the economy to within an order of magnitude. This money isn't even fully usable, in that the economy would collapse if the people who have all the money tried to spend it on physical stuff.
- If more people work, or if people work longer hours, that means they're poorer; but it makes GDP go up.
- If people shift to poorer modes of life, e.g., living in smaller apartments, moving close to work to cut commuting costs, buying cheaper foods, that changes the items included in the CPI basket of goods in a way that makes inflation-adjusted GDP go up.
- Most importantly, it tells you nothing about how much money workers are making. That is because of the curious fact that, during that time period when inflation-adjusted GDP increased by a factor of 12,
inflation-adjusted median and minimum wages increased by a factor of about 1.3 (IIRC; maybe it's 1.5 but it's certainly not 2). That means that the top 10% of Americans (who own stuff) captured something like 90-98% of the growth. Those figures imply their income grew by about 80 times as much as did the income of wage-earners. (Their wealth grew by a larger factor.)
The BEA conceals the fact that wages haven't increased since the 1960s by never reporting wages. They report stats either in terms of household income or per capita income. These have more than doubled over that time as a result of women entering the workforce and people working longer hours.
When we say wages today, on a per hour basis, are about the same as they were in 1970, inflation-adjusted, that means one hour of work buys about the same CPI basket of goods. However, the rich folk are now getting many times more stuff per hour of work. This bids the price of luxury, status, and constant-supply goods, such as land and ivy-league educations, way, way up.
If a worker can buy the same basket of goods for one hour's work now as in 1970, despite luxury goods being much more expensive, that means mass-market goods have become cheaper. So a worker today can get more iPods, cheaper cars, computers, and beer, but can't afford an elite college or a lot of land.
The critical thing is college. The way the US works is that there is a class of people who have status and power, and they ensure that only people who go to elite universities can get into positions of status and power, and they try to ensure that only people like them can go to elite universities. Pre-1970, that was done mostly thru race and gender restrictions. Money was not much of an issue; elite universities then were cheaper than state colleges are today, and academic scholarships were very common. Today, it can't be done through race, so it's done thru money (tho possibly by accident). The prices of the ivies have gone thru the roof, and there are no more full-tuition academic scholarships at any ivy-league universities, except for, ironically, ones based on race and gender. (Around 1960, the ivies all agreed not to offer full academic scholarships, to make football competition fair. Schools had been getting around the restrictions on football scholarships by giving football players academic scholarships.)
You may argue that being able to buy more stuff on iTunes more than compensates for having to live in a tiny apartment. But it's hard to argue that having your entire socioeconomic strata made increasingly irrelevant in political elections because the rich make most political contributions, and squeezed out of positions of power because of unevenly-distributed growth that bid the price of ivy-league education up out of their range, is an improvement. It's just bread and circuses.
The correct way to calculate whether people are getting richer or poorer is to see how many hours they work. If the true value of their wages is going up--and that INCLUDES gains from increased quality of stuff (eg more-powerful computers), which isn't reflected in the CPI and which is the usual immediate defense Republican economists make when you point out wages have stagnated--then each hour of their free time is becoming more valuable. They should thus work fewer hours until the marginal value of an hour worked and an hour of free time are again equal. If the true value of their wages is going down, the stuff they can afford in their spare time is worth less, so they should work more hours. Survey says:
1.bp.blogspot.com/-lL50R_nvIkw/UNik_0qR-7I/AAAAAAAACWU/k0AUONArZzo/s1600/hrworked.jpg
The people who say things are getting worse would say the same thing to prove that things are getting worse.
2544831
It's late. but I felt it was important to write something clever about how things are getting better, but economy is getting ruinously worse[1] because those who work for a living—nearly everyone—are getting poorer and working harder (though, of course, the technological cornucopia is masking that a bit). I despaired at writing this properly but it turns out Bad Horse did this for me, better than I would have done and with graphs even.
So. Listen to Bad Horse, everybody. He speaks wisdom. Well. More than usual, I meant.
[1] For everyone. Low wages and wage stagnation (and if you are in Europe, heavy-handed austerity measures) mean a drop in aggregate demand that inevitably leads to the economy seizing up and dying. Sure, squeezing every last ounce of productivity out of every worker is great for the GDP until the whole system breaks. Hell, you can read the liquidity crisis of 2008 as being born out of consumer crediting being used to plug the vast terrifying hole in demand worsened in part by Greenspan (*spit*) all but telling homeowners to use their mortgage as an ATM by way of ruinous refinancing. But I'll grant that's a small thing compared by the Gog and Magog of criminality and stupidity that stalked (and stalk!) the banking world at the time like... two... great... stalking things. Um. That metaphor ran away from me there, a bit.
2544831
This is, honestly, the real problem. The issue is that there are incomparables; the way you're supposed to calculate inflation is by comparing how much people had to pay for a set of goods in the past versus for that same set of goods in the present, but in many cases direct comparison is either impossible or worthless, because the new goods may be superior, and in some cases may include things which either didn't exist in the past at all, or which would, if included, give us a stupidly, stupidly large amount of wealth.
This is the problem that computers present; one could make the argument that every one of us are effectively millionaires by the standards of 1993 because we have computers which would have been worth tens of millions of dollars back then. Now, it may be the case that we don't use them in the same way that those computers were used, but given that the web only barely existed in 1993, it is kind of hard to really do a comparison at all, because what we can do with modern computers is even more than what could be done with that supercomputer back in 1993.
This is, on the one hand, obviously stupid, but on the other hand, our lives are clearly better for having these computers; the world has changed immensely even in just my own lifetime.
So when we talk about "inflation-adjusted wages", are we really talking about things which even can be directly compared? That's ignoring the fact that just about everything has gotten better since the 1960s - cars are vastly more efficient and work better, appliances are more reliable and energy efficient, we produce less pollution to do the same amount of work, ect. all of which adds up as well.
I went through Vanderbilt University, which is one of the best universities in the United States (and indeed, in the world), on a scholarship which paid for pretty much my entire tuition; I graduated with a little bit north of $10k worth of debt, which I quickly paid off.
The Ivy Leagues are decaying as a result of their policies, and becoming less prestigious by comparison; Vanderbilt University is mentioned very frequently when people cite experts on the news, as are MIT and CalTech, but how often are most of the Ivy League colleges mentioned? Harvard and Yale come up frequently when it comes to law stuff and similar things, and I sometimes hear Cornell, but Brown, Darthmouth, Columbia, and even Princeton are not mentioned nearly as much anymore on the news. When people are going to ask experts for their opinions, I'm hearing less and less of people from the Ivy Leagues. And that hurts them by comparison, because when you hear "someone from X" on the news all the time, and X is a college or university, that increases their prestige. I mean, how often do you hear about the University of Pennsylvania?
It simply isn't true that they're the only ones with power and influence, and they appear to be on the wane and growing less important.
I'm pretty sure they set that chart as hours = 100 and then were measuring the percent change over time; according to the OECD, the average worker in Japan works 1735 hours per year, whereas the average worker in the United States works 1788 hours per year. The average worker in Germany, by comparison, works 1388 hours per year.
In any case, I don't think it really means much of anything at all; working less hours per week may indicate a high unemployment or underemployment rate (i.e. there just isn't enough work for you to do, but you'd be willing to do it if it was offered), or that the marginal value of work was lower in that country (it is worth noting that an hour of work in the US is worth nearly half again as much as an hour of work in Japan according to the OECD), or that the marginal cost of work is higher in that country (longer commute times or an otherwise more expensive commute, more unpleasant working conditions), or any number of other things. The value of an hour of free time going down relative to an hour spent working in the United States is not necessarily an indication of anything bad, and indeed, may well indicate that you can spend your money better there, or simply that the work is more available in the US than it is in Germany.
The actual cause is most likely the fact that many European countries have capped the number of hours people can work legislatively, and they have a lower statuatory definition of working full time than the United States does. The US's standard number of working hours per week is simply higher than it is in Germany, and so people in the US work more. The actual value of an hour of work in each country are only marginally different (the US is somewhat higher), so it seems most likely that the actual cause of the difference is cultural and legislative rather than having much of anything to do with rational decision making; if in one country you are expected to work 40 hours per week, and the other expects you to only work 30 (or 35, with much longer vacations, thus driving down total annual hours worked per year, as is the case in much of Europe), then you're going to see a pretty significant difference, but it has nothing to do with rational decision making - it has to do with whatever arbitrary limit we set up.
Most good jobs require you to work full time according to the definition of whatever country you live in. Thus, you end up with a difference becaue rational people choose to work full time because that gives you the best ROI on hours worked:income earned, but the definition of full-time work differs by country, so you end up with large differences which aren't really based on personal decisions but on cultural factors which may well not be rational, or which may be related to extrinsic factors about what you consider most important about your economic growth and stability.
i.imgur.com/Vkd1I01.png
2544831 THIS! This this this this this SOOOO MUCH Thank you!
2544897
1) Great post.
2) But I am with Bad Horse on economics.
3) The graph you posted is pretty misleading because the "mean wage" has the same problems that GDP does as a measure of national wealth. The rich are getting so much richer that it's skewing everyone else's data.
See, for instance, here, which contrasts the mean American wage with the median wage. The SSA uses different methods to calculate wages than the OCED, but the difference between mean and median is dramatic, and if your graph was adjusted accordingly the US' showing would be even more shocking than it already is.
2544965
The problem is that the wealth of the rich exaggerates the mean income of all countries; using the median wage makes no real difference in this case. The median household income in the US is $30,932, whereas the median household income in Germany is $24,623, while Japan is all the way down at $19,974. If you run the numbers, while the median household income is significantly lower than the mean wage, as it turns out the median household income per hour worked in the US and Germany is pretty much the same; the Germans work 78% as many hours annually and make 80% of the money annually. Germans and Americans, thus, get paid about as much per hour, Americans just work more hours and thus earn more money.
I will note that NBER (the National Bureau of Economic Research) claims that median income in the United States is undercounted by the OECD pretty consistently and that the actual median household income is $37,228, which is possible but unfortunately I'm not nearly familiar enough with the data in question to say whether or not that's true.
Yes, on the global scale things are vastly better than in the past, and on most aspects, likely to keep on improving. I'd say that the only place where we're unquestionably doing worse than in the past is the environment. Sure, we've had successes there - no more leaded gasoline, for example - but the global climate change continues, and the extreme weather associated with it seems to be more and more common.
2544965 Thank you for making the point about median vs. average. But "wage" means salary, so it increases when hours worked goes up. A better measure would be median dollars per hour. But I'm still of the opinion that total hours worked is the best measure we have. Assuming people don't enjoy their work more or less now than in the past. rising hours worked means people feel poorer, and falling hours means they feel richer.
2544897 The important thing in that chart is not so much the comparison along the Y-axis across countries, which is problematic, but the slopes, which are remarkably non-problematic for economic indicators. I'd say more but I have to run.
Well, it is also dangerous to show only one side of the story. Yes in many ways things are getting better, but in many ways, things are also getting worse. It's a strange balance of good and bad that occurs, but a lot of people ignore both sides. I personally think I live in a very magical, blessed time in the world, technologically, socially, and generally, but at the same time, it is becoming increasingly dangerous culturally, economically, politically.
So while I agree with you on most of those things, that many things in the world are generally getting better, I cannot promote ignorance of the many dangers around us that still exists and are racking up. A careful balance must be maintained.
2544897
I think you're right, but as colleges become more prestigious, they raise their prices and drop their academic scholarships. MIT has no academic scholarships, and tuition is $44,720 / yr. Also note that non-ivy schools become prestigious only in certain domains:
- To get a high-paying job in finance, law, or consulting, you have to go to an ivy. Even to get a high-paying computer programming job in those fields. The ads will often say "applicant must come from a top-tier school", and if they mention examples they'll say Columbia, Harvard, Princeton, and Brown. Seriously, they'll sometimes mention Brown rather than MIT for a C-hacking job, if it's one of those C-hacking jobs that pays $300K/yr.
A quote from a Forbes article:
- I think politics still favors the ivies, but I don't know.
- Business still recruits "management material" from the ivies, but they have their additional separate list of "business-school ivies", like Wharton & Stanford.
- Television prefers ivy-leaguers for scriptwriting, but it isn't a requirement as it is in law or finance. But entertainment generally prefers New York University, USC, & UCLA.
- Tech venture capitalists care, more than anything else, that your team has one person with a degree from MIT, Stanford, or Carnegie-Mellon.
What college you went to for undergrad determines your entire career. 30 years after you graduate, people will seldom bother to attempt to evaluate what you've done since graduating, because that's basically impossible to do. The first thing they'll look at on your resume will always be your undergrad institution.
Details and politics aside, I agree with the notion "don't panic!"... so long as it isn't taken as an excuse to kick back and stop working towards bettering tomorrow. I'm not implying that you're advocating that, it's just worth noting.
2544984
Point taken about the mean/median difference affecting everyone. You're correct.
There's some churn between the country lists depending on whether you sort by mean or median income (in particular, it does knock the US down to #4), but not substantial enough to argue over.
2546194
Ironically, the US actually goes up in ranking if you go by median income; it usually hangs around #10 in terms of mean income.
The reason is that a few small countries (the United Arab Emirates, Qatar, Norway, Switzerland, Luxembourg, Singapore, Brunei, Kuwait, and San Marino) have some extremely wealthy people in them, with the UAE, Qatar, and Kuwait being especially notable for having really, really insane gaps between the rich and the poor (especially migrant workers who aren't citizens but who live there). If you look at median income, the US median income is about 60% of its mean income, while the median income in Luxembourg is something like 40% of its mean income. People talk about how messed up the US wealth distribution is, but a lot of countries have it a lot worse than we do - indeed, essentially anywhere outside of the developed world has a larger gap. By median income, only Norway, Luxembourg, and Switzerland are above the US, with a total cumulative population between them less than that of the New York or Los Angeles metro areas.
Not to say that we can't or shouldn't do better, but it is a global issue and the US doesn't even have it all that bad relative to many places.
The other... weird thing... about the US is just how enormous it is. It is really hard to get a grasp on just how big the US is relative to other countries, but the population of the US is vast. Our top 10% (which are obscenely rich by global standards, pulling in nearly 150k/year) consists of over 31 million people - about the same as the total population of Norway, Sweden, Finland, Switzerland, Singapore, San Marino, Brunei, and Luxembourg combined.