Scientists now think that King Tut may have died of malaria. As the fellow who sent me the link dryly noted, King Tut did not have good comprehensive health insurance.
All kidding aside, this is a good excuse to meditate on just how rich we are. King Tut was probably the wealthiest man in the world during his time. He died of something that wouldn't kill the most abjectly immiserated welfare mother in the United States today, because of a combination of public health efforts, and cheap antimalarial drugs.
You always need to factor in things like this when you talk about changes in living standards over time. All the positive changes in society mean that the absolute difference between the income of Bill Gates and the man who valets his car is larger than it has ever been in history. But the actual difference in comfort between the two of them is probably much smaller than the difference between JP Morgan and his stableboy. And both Gates and the valet are almost immeasurably better off than their predecessors.
Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts
February 20, 2010
On riches
From Megan McArdle:
September 16, 2009
One of the most ignorant books I've read
This is a review of Ellen Ruppel Shell's book, 'Cheap: The High Cost of Discount Culture." Using 'cheap' as an insult proves nothing so much as the speaker's class prejudices. This book falls into that same trap. In an attempt to imitate objective journalism, the book contains many true narratives and well-documented facts. Then, on top of those facts, we are given a list of the author's opinions. There is little attempt to convince the reader that one follows from the other, and, often, the facts and the opinion don't seem even theoretically related.
For instance, her section on Ikea makes some valid points. Although Ikea says its wood is sustainably harvested, they haven't proved it; some people find Ikea furniture hard to assemble (although I think it's fun); and Ikea stores are big and sparsely located, so people have to drive farther to get to them. Then, without warning, she concludes the section with this:
None of this has come out of what she wrote before. I could excuse the woman's bias if she would at least be precise about what she objects to. What has the 'notorious' Allen key done to her? It seems like a pretty useful tool to me.. Or is it the flatpack or the size of the warehouse that we should hate? An example of the power of rhetoric to describe perfectly neutral things in terms that repel. And the question of how people can think they are comfortable in a chair, while Shell knows they are not actually comfortable, is a little beyond me.
Shell doesn't understand class:
Even for a book on the subject of material things, the author is materialistic. The word 'cheap' is used solely to disparage. The implication is that people who buy cheap goods are selfish, careless or at least short-sighted. Never once does the author recognize that we might not be choosing between 'cheap' goods and quality goods, but between 'cheap' goods and nothing. She consistently equates brand with quality, and appears to think it is morally wrong for a brand to produce a cheaper version of itself, because it betrays the 'trust' she has in brands. Outlet stores, where poor people can buy the same brands rich people do, are morally suspect for this reason.
Dear God, imagine people losing faith in Coach! Actually, a person who trusts in a brand deserves to be disappointed--and incidentally, a philosopher would not be dreaming about a handbag. And if the people who shop at discount stores are content with the prestige value of their 'Coach' bags, why should the author take it upon herself to tell them they should find their purchases worthless? Buying a knockoff makes a lot more economic sense for most of us than paying full price. People who buy Coach bags don't care about the quality of the stitching. Does the author really think a handbag that costs $800 is 40 times better than the $20 one? Price may be an indicator of quality sometimes, but not here.
She doesn't understand history:
In Adam Smith's England, she thinks, people of every class bought high-quality products for a fair price. And because people knew the merchants from whom they bought, the merchants never exploited their customers. "You can only cheat your neighbor once." So, no grocer ever adulterated his merchandise, no innkeeper ever added fraudulent charges to his bill, no worker ever absconded with his wages. People were honest and good. All that changed because of international corporations and globalization.
Is this idealism, or just stupidity? First of all, there _were_ cities in the 18th century, London, for one, so people weren't always buying from their neighbors. And even in villages, people in the past didn't "buy local" in order to make a political statement--they had no other choice. And when you're buying local because transportation and communication over long distances are prohibitively expensive and take forever, you have no choice but to continue buying from your neighbor. Even if he puts vinegar in his wine or plaster of Paris in his bread (both formerly common practices). Anyone who has read a single 18th century novel or history knows that dishonesty, then as now, existed wherever dishonest people did.
And definitely doesn't understand economics:
She appears ignorant of the basic idea of comparative advantage:
Yes. That's how it works. This is an example of the author writing so as to suggest that what she describes is bad--avoiding the trouble of actually giving a reason why it's bad. She seems to think buying food when you once produced it is an unqualified evil. So farmers are a priori better off than factory workers. Also, local food is a priori better than imported food, and when business provides cheap imported food which poor people can buy, this is bad, and governments should step in:
She also thinks Americans, unlike every other people in history, are incapable of developing new skills in response to changes in economic incentives:
I am glad I read the book, although I wish I had stopped with the sociology and skipped the opinions. There are several interesting bits--for instance, I didn't realize that a store's setting one price for everyone was, at one time, a revolutionary move. A interesting aside is that printing coupons or offering rebates is really a way of offering two prices--the person who is sensitive about spending money will clip the coupon, and buy your product--the person who cares less, or is less organized, will have his attention drawn to your product, and buy it without bothering to redeem the coupon.
But, my God, this is one of the most ignorant books I've ever read. And yet I have seen no critical reviews of it. The quality of the author's mind or scholarship doesn't seem to matter so much as the fact that the conclusions she comes to sound progressive and plausible--and support the rich, liberal belief that virtue can be attained by shopping at upper-class-coded stores rather than other stores.
For instance, her section on Ikea makes some valid points. Although Ikea says its wood is sustainably harvested, they haven't proved it; some people find Ikea furniture hard to assemble (although I think it's fun); and Ikea stores are big and sparsely located, so people have to drive farther to get to them. Then, without warning, she concludes the section with this:
Flatpacks of medium-density fiberboard hauled out of sprawling warehouses and cobbled together with IKEA's notorious L-shaped, six-sided Allen wrench are not tasteful, comfortable furniture. They are a facsimile of tasteful, comfortable, furniture.
None of this has come out of what she wrote before. I could excuse the woman's bias if she would at least be precise about what she objects to. What has the 'notorious' Allen key done to her? It seems like a pretty useful tool to me.. Or is it the flatpack or the size of the warehouse that we should hate? An example of the power of rhetoric to describe perfectly neutral things in terms that repel. And the question of how people can think they are comfortable in a chair, while Shell knows they are not actually comfortable, is a little beyond me.
Shell doesn't understand class:
Even for a book on the subject of material things, the author is materialistic. The word 'cheap' is used solely to disparage. The implication is that people who buy cheap goods are selfish, careless or at least short-sighted. Never once does the author recognize that we might not be choosing between 'cheap' goods and quality goods, but between 'cheap' goods and nothing. She consistently equates brand with quality, and appears to think it is morally wrong for a brand to produce a cheaper version of itself, because it betrays the 'trust' she has in brands. Outlet stores, where poor people can buy the same brands rich people do, are morally suspect for this reason.
A philosopher might question whether a Coach bag of questionable quality hawked by clerks who do not know the provenance of their merchandise is the Coach bag of our dreams...the uncoupling of brand name and product can't help but confuse us and, over time, even undermine our trust.
Dear God, imagine people losing faith in Coach! Actually, a person who trusts in a brand deserves to be disappointed--and incidentally, a philosopher would not be dreaming about a handbag. And if the people who shop at discount stores are content with the prestige value of their 'Coach' bags, why should the author take it upon herself to tell them they should find their purchases worthless? Buying a knockoff makes a lot more economic sense for most of us than paying full price. People who buy Coach bags don't care about the quality of the stitching. Does the author really think a handbag that costs $800 is 40 times better than the $20 one? Price may be an indicator of quality sometimes, but not here.
She doesn't understand history:
In Adam Smith's England, she thinks, people of every class bought high-quality products for a fair price. And because people knew the merchants from whom they bought, the merchants never exploited their customers. "You can only cheat your neighbor once." So, no grocer ever adulterated his merchandise, no innkeeper ever added fraudulent charges to his bill, no worker ever absconded with his wages. People were honest and good. All that changed because of international corporations and globalization.
Shoddy clothes, unreliable electronics, wobbly furniture, and questionable food have become the norm...The combination of quality and value, once available to the many, is now affordable only to the few.
Is this idealism, or just stupidity? First of all, there _were_ cities in the 18th century, London, for one, so people weren't always buying from their neighbors. And even in villages, people in the past didn't "buy local" in order to make a political statement--they had no other choice. And when you're buying local because transportation and communication over long distances are prohibitively expensive and take forever, you have no choice but to continue buying from your neighbor. Even if he puts vinegar in his wine or plaster of Paris in his bread (both formerly common practices). Anyone who has read a single 18th century novel or history knows that dishonesty, then as now, existed wherever dishonest people did.
And definitely doesn't understand economics:
She appears ignorant of the basic idea of comparative advantage:
Haiti once exported rice. Today [after a tariff reduction], three-quarters of the rice on Haitian dinner plates comes from the United States. Paying for imported food requires cash, and acquiring that cash usually means getting a job providing the First World with something it wants--either raw materials, such as timber, minerals, or coffee, or cheap mass-manufactured goods.
Yes. That's how it works. This is an example of the author writing so as to suggest that what she describes is bad--avoiding the trouble of actually giving a reason why it's bad. She seems to think buying food when you once produced it is an unqualified evil. So farmers are a priori better off than factory workers. Also, local food is a priori better than imported food, and when business provides cheap imported food which poor people can buy, this is bad, and governments should step in:
Rather than flooding markets in developing countries with cheap food, thereby weakening incentives to grow and process food locally, aid should be given directly to the poor to help them purchase food at fair prices.
She also thinks Americans, unlike every other people in history, are incapable of developing new skills in response to changes in economic incentives:
The idea that more and more Americans can reinvent themselves into ever more challenging work is a pipe dream.
I am glad I read the book, although I wish I had stopped with the sociology and skipped the opinions. There are several interesting bits--for instance, I didn't realize that a store's setting one price for everyone was, at one time, a revolutionary move. A interesting aside is that printing coupons or offering rebates is really a way of offering two prices--the person who is sensitive about spending money will clip the coupon, and buy your product--the person who cares less, or is less organized, will have his attention drawn to your product, and buy it without bothering to redeem the coupon.
But, my God, this is one of the most ignorant books I've ever read. And yet I have seen no critical reviews of it. The quality of the author's mind or scholarship doesn't seem to matter so much as the fact that the conclusions she comes to sound progressive and plausible--and support the rich, liberal belief that virtue can be attained by shopping at upper-class-coded stores rather than other stores.
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