Adding to the Prosperity Pool

by Don Boudreaux on April 21, 2008

in Standard of Living

One of my earliest posts at the Cafe — dated June 28, 2004 — is on what I call "the prosperity pool."

This article in today’s Wall Street Journal, about new technology on automobiles to help protect drivers from crashes, offers yet another example of the countless ways that our lives become materially more prosperous, almost on a daily basis, in small steps — steps so small that we seldom notice any one of them, but so large in number that they make us much wealthier than we realize.

Here’s the article’s sub-headline:

Systems Are Trickling Down From Luxury to Mainstream Vehicles

And here’s the article’s opening sentence:

Sophisticated technology that helps drivers avoid a crash is
accelerating its descent from the rarified reaches of super luxury cars.

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{ 19 comments }

Leland Carlson April 21, 2008 at 12:59 pm

Don: There was a recent article at wired.com discussing the disappearance of the window crank in automobiles. This appears to be another example of the trickle down of luxury into the lives of everyday consumers. Thanks for keeping the torch lit.

spencer April 21, 2008 at 1:11 pm

You are right, this type of improvement is almost constant.

It is such a pattern that for decades the people at the BLS who construct the CPI use the shift of an item from a luxury extra to a standard feature as one of the ways they adjust the CPI to capture changing quality standards.

It is really a shame that some PhD economist wrote a newspaper article for a Pittsburgh newspaper that was based on the premise that the CPI does not incorporate this type of quality adjustment.

What do you think of a professional who misleads newspaper readers like this?

I wonder if he he did it deliberately.

James Hanley April 21, 2008 at 2:48 pm

"the disappearance of the window crank in automobiles"

I guess I'm a luddite. I miss the crank window–it was more reliable, and cheaper to fix, than electric windows, and assuaged my personal phobia of driving off a bridge into water, in which case the electric window would short out, making it harder for me to escape the car.

Still, I'm sure I'm in such a minority that this does in fact qualify as one of those quiet little changes that make most of us better off.

M. Hodak April 21, 2008 at 4:11 pm

James,

If it's any consolation, the water pressure on the window would likely prevent you from cranking it down. I would hope you never find yourself in such a situation, but your best bet would be to break the window in either case.

FreedomLover April 21, 2008 at 6:46 pm

All that matters are high-paid union jobs with guaranteed pensions!!!!

/leftist crank

Charlie April 21, 2008 at 6:54 pm

I like this example more than some from the past because it transcends material progress and goes into the realm of saved lives. While I do not need to be convinced that material prosperity alone is incredibly important to other forms of prosperity such as physical well-being, cynics and progressives among us will value this example as an unequivocally good result of free markets. Thanks Don! Governments do not create prosperity, people create prosperity.

Gil April 21, 2008 at 8:17 pm

I'd argue technology creates prosperity. The free market greases the wheel to make it easier. I'm sure many quaint farming villages that haven't much changed over the centuries would count as free markets though they aren't prosperous in the modern sense of the word. But where does the Government fit in? I do believe it has a basic minimalist function.

brotio April 22, 2008 at 12:10 am

"But where does the Government fit in? I do believe it has a basic minimalist function." – Gil

I'm wondering if there really are two 'Gil's posting now. The contrarian that I'm used to seeing post here would call the Gil that posted the above quote an anarchist for suggesting that government has only a basic minimalist function.

The libertarians (and Libertarians) on this blog have outlined those minimalist functions many times.

Russ Nelson April 22, 2008 at 12:29 am

FreedomLover: please stop. There are enough real leftist cranks that we don't need any fake ones.

FreedomLover April 22, 2008 at 12:40 am

I enjoy mocking leftist cranks like muirduck. I anticipate their foolishness, rendering them irrelevant.

Lee Kelly April 22, 2008 at 12:44 am

Gil,

The words 'technology' and 'technique' have a common ancestor: 'tekhne', which means 'art', 'skill', 'craft','shape', 'make', 'method' or 'system'. Improvements in technology, like technique, either perform new functions or perform older functions at a lower cost.

If I buy a more efficient car then that car has a more efficient form, shape, or structure, perhaps we could say that it has a more efficient tekhne. If I discover a new method of doing my job which makes me more productive, then the form, shape, structure or tekhne has increased its efficiency.

The free market, even in the absence of technological development, improves the tekhne of society, the form, structure, or shape. There are incentives, even at the levels of existing technology, to allocate jobs to those who are best able to do them efficiently, or to use time more wisely, or to improve techniques for achieving ends.

The free market improves the tekhne of society, its shape, form, structure, arrangement, and allocation of resources. The improvement of technology is only part of this imrovement of tekhne, and not the whole.

Gil April 22, 2008 at 2:56 am

Well, brotio, I should have added (why didn't I think of it before I posted it I'll never know :( ) was that it should have been a question. "The government has a basic role but what?" When I did criticise certain people about the anarchist/minarchist quip it was because of 1. How do can you justify some Guvmint and taxes whilst still jabber on about thugs and theft. and 2. Some have used a definitino that's so minimalist as to be non-existent and I would argue at that level it'd probably be better if there was no Guvmint at all.

But I still disagree somewhat L.K. in that some people (such as the Amish) voluntarily choose the way of low-technology. By doing this they are free. Will reality catch up with such people in a way they'll suffer the calamities of yesteryears when people didn't have technology to counter natural events or will they wuss out and call upon modern society to alleviate their problems then return to the low-tech lifestyle at their convenience?

I_am_a_lead_pencil April 22, 2008 at 5:46 am

Spencer said:

"It is really a shame that some PhD economist wrote a newspaper article for a Pittsburgh newspaper that was based on the premise that the CPI does not incorporate this type of quality adjustment."

Please post this link – let folks read it (perhaps again) and let them decide.

vidyohs April 22, 2008 at 8:44 am

Methinks,

Hi. Back and posting on the discussion thread of Wed 4/16.

James Hanley April 22, 2008 at 11:11 am

"If it's any consolation, the water pressure on the window would likely prevent you from cranking it down."

Gee, thanks, Hodak! Now I feel even worse. ;)

spencer April 22, 2008 at 6:47 pm

Just as I expected, you are not man enough to admit that you made a mistake on the CPI issue.

I would have loved to have had a chicken shit coward like you in my platoon in the Marine Corp.

I gave years of my life and put myself in harms way to defend your freedom of speech.
I have never regretted that there were many free riders on the sacrifice I made, including raciest, communist and KKK members. But the more I read your bull shit the more I begin to doubt that my sacrifice was worth while.

I challenge you to explain how the bull shit you teach is consist with your being just another bureaucrat employed by the state of Virginia.

If you really believed half of the stuff you claim you would not be working for the government.

How can you really believe the anti-government vile you spew and collect a salary from the government? I can only conclude that you do not really believe the idelogical bull shit you spout..

vidyohs April 22, 2008 at 9:14 pm

Der Fatherland Uber Alles, spencer, kill dem swines dat don't obey de Fatherland!

Der Fatherland can do no wronk, vee must obey!

You right good soldier, spencer, convert dem to lovink der Fatherland or kill dem!

Heil! Heil! Heil!

brotio April 23, 2008 at 1:08 am

"1. How do can you justify some Guvmint and taxes whilst still jabber on about thugs and theft." – Gil

It is with that quote that you paint everyone who is a non-socialist as an anarchist.

I see a difference between government taking my money and giving it to Murthaduck so that he can have his teeth cleaned and government taking my money and using it to build and maintain roads. You have told me many times that you see no difference at all.

Hammer April 23, 2008 at 9:41 am

Well, there is an argument to be made that any coercive tax system is just theft by another name. There have been proposals on how to have a voluntary tax system. The trouble with them is that they would not be able to fund the vast amount of crap the government currently does. That is also one of their greatest strengths.

Much like immigration and other philosophical issues, there is a necessary first step to getting rid of the tax issue, and that is to make the government much much smaller. Only then can one really address taxes in a meaningful way.

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