Eating Our Oats J. Bradford DeLong University of California at Berkeley and NBER brad.delong@gmail.com http://delong.typepad.com +1 925 708 0467 January 27, 2009 Back on March 9, 1776 Adam Smith's Inquiry into the Nature and Causes of the Wealth of Nations went on sale for the price of 1.8 pounds sterling at a time when the median family made perhaps 30 pounds a year. One book (admittedly a big book and an expensive book) cost 6% of the median family's income for a year. In the United States today median family income is $50,000 a year. And Adam Smith's Wealth of Nations doesn't cost $3000-which is what 6% would be--but instead $7.95 at Amazon (if you buy the Bantam Classics editon). The median British family in 1776 could buy 17 copies of the Wealth of Nations out of its annual income. The median American family in 2009 can buy 6000 dead-tree copies: a multiplication factor of 350. Books are not an exceptional category. Today our buttermilk-fried petrale sole with pickled vegetables and parsley mayonnaise as served at Chez Panisse CafÊ costs the same share of a day-laborer’s earnings as the raw ingredients for two big bowls of oatmeal cost in the eighteenth century. Back in 1776 a day-laborer's wage in London would buy him 6000 calories of the cheapest grain--oats. A day-laborer in California today clears $80. A 25 pound bag of wheat flour is $6 at Costco and contains 75000 calories-meaning that a day's unskilled work that could only score 6000 calories in 1776 could score 1000000 calories today: a multiplication factor of 170.
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William Nordhaus of Yale calculates that the multiplication factor for artificial light since the 1760s is 1500: quite a change from candles to compact fluorescent bulbs. And there are all the commodities that we consume that others could not have consumed at any price in the past. If back in 1786 you had wanted to watch and listen to Mozart's The Marriage of Figaro in your house, then you could do it if you were were Holy Roman Emperor, Archduke of Austria, and had a theater in your house--i.e., your Palace of Laxenberg--large enough to hold the cast. Today the DVD is $17.99 at <http://www.amazon.com/>. The multiplication factor for watching The Marriage of Figaro in your home is effectively infinite--at least for those of us not named Josef von Habsburg. We have, from the standpoint of every century before the industrial revolution, reached the frontier of mass material comfort—enough food that we are not painfully hungry, enough clothing that we are not shiveringly cold, enough shelter that we are not distressingly wet, and enough entertainment that we are not bored—and blown out the far side. We—at least those of us lucky enough to be in the global middle and upper classes that still largely cluster around the North Atlantic—have lots and lots of stuff. We have reacted to the power that our machines and factories have given us to get more and more stuff by getting more and more stuff—or at least more better-quality stuff. I am fighting hard to spend as great a share of my income on books as Adam Smith did of his: I present my 10,000 book library as proof. In America today farmers are down from the three-quarters of the workforce that they were in 1776 to less than one-seventieth of the workforce, but we still spend about one dollar in five on food—we just buy buttermilk-fried petrale sole with pickled vegetables and parsley mayonnaise served at Chez Panisse Café rather than (or in addition to) oats in the gunnysack. Some of this is because the oats-for-five-meals-out-of-sixdiet of Scottish peasants in the eighteenth century was monotonous, and we are glad to escape it. Some of this is because we play status games: oats taste worse when you know that somebody else is tasting petrale sole and that makes the sole taste even better to those of us lucky enough to be the petrale sole eaters. Some of this is because we cannot collectively think of
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anything better to do with our productive capacities other than try to give one another more comfortable lives. Nearly eighty years ago John Maynard Keynes did the math on economic growth and concluded that within a couple of generations—by the time of his peers’ grandchildren—the economic problem of too-scarce resources and too-few goods would no longer be a big problem for humanity. On that day, Keynes thought—and he thought we would have reached it by now—“We shall once more value ends above means and prefer the good to the useful. We shall honour those who can teach us how to pluck the hour and the day virtuously and well, the delightful people who are capable of taking direct enjoyment in things, the lilies of the field who toil not, neither do they spin.” But when I look around, all I can say is: not yet. Everybody I know can easily imagine how they could spend up to three times their current income usefully and productively. (It is only beyond three times current spending that spending becomes absurd and wasteful.) And everybody I know finds it very difficult to imagine how people can survive on less than one-third of what they spend. (Never mind that all of our preindustrial ancestors did so all the time.) All the evidence is that Keynes was wrong: that there is a point at which we say “enough!” to more oats porridge, but that we are simply not constructed in such a way as to allow us to say “enough!” to stuff in general.
References John Maynard Keynes (1931), “Economic Possibilities for Our Grandchildren” Wolfgang Amadeus Mozart (1786), The Marriage of Figaro Adam Smith (1776), An Inquiry into the Nature and Causes of the Wealth of Nations
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