Cleaned by Capitalism XXVIII

by Don Boudreaux on June 25, 2012

in Cleaned by Capitalism, Data, Growth, Seen and Unseen, Standard of Living

Below is a photo of the packaging that contained some celery that I recently bought at an ordinary American supermarket.

This packaging has a finger-press air-tight seal along the top that keeps the unused contents of the package fresh longer than would be the case if the package weren’t so snuggly resealed.  Of course, if this package didn’t have its own handy-dandy, built-in finger-press air-tight-resealing mechanism, other methods might do the trick equally well – say, rolling the opened end of the package in on itself and then securing the package tightly with rubber bands running length-wise along the package.  Before such built-in resealing mechanisms were available, we Americans didn’t wail in misery because of the trouble we had to endure to keep unused portions of the likes of celery sticks fresh.  We barely noticed such ‘trouble,’ if we noticed it at all.

This handy-dandy, built-in finger-press air-tight-resealing mechanism admittedly is a small thing.  But it’s nevertheless a genuine convenience – one that has become available only within the past six or seven years (at most) – that lowers somewhat our cost of keeping our personal environment fresher and cleaner and healthier: because of this small advance, our food is a bit less likely to spoil.

More generally, how are small advances such as this one accounted for in statistics such as the Consumer Price Index (and, hence, in turn in data on changes in real income)?  If – and I here say if” because I am insufficiently familiar with the methods used by statisticians on this front – if each such small improvement in our living standards is too minuscule to warrant being taken account of in official statistics and measures of changes in our real income and standard of living, are improvements in our standard of living underestimated in light of the fact that our world is full of many such teensy improvements?  At some point, lots of teensy improvements add up to what in fact is noticeable improvement in living standards – improvement that might be missed by official statistics.

And, do note: although teensy-weensy, each advance such as the seemingly mundane one pictured above is evidence of the frenetic innovativeness that Deirdre McCloskey correctly identifies as being the distinguishing mark of free-market capitalism.

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