Measuring wealth over time simply can't be done with monopoly money. Inflation adjustments are cooked books. So 50 years ago vs now... Let's chat... Text KKR
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@Antifragile
LOL at calling me out on stirring a discussion for the sake of stirring a discussion!
Kyle, I will publicly admit that in fact, I do believe that our standard of living is better than 1970 (although I wasn't alive back then yet and only know it theoretically). Kudos on calling me out on it.
But I did not just post to stir a discussion for no reason at all. I've met and talked to many people, young adults, students, employees who would say "my parents used to be able to live in a house and I can't even afford a condo". The reasons for asking more questions were to prompt a chat for those listeners who think that way.
Your points:
- You have to work less hard than in 1970 to get the same or better standard of living and care.
- We have more and larger cars. We get to travel more today than our parents etc.
- They bought cars for less money, but inflation took care of that difference, so again, you have to work less for your car.
- Living a decade longer isn't a bad thing. And fewer are starving.
- Ownership - we don't own anything. But we have some control even if a bank is another entity that too has control. So it doesn't matter how you go about getting that control. How much value did you have to create to achieve this control back in 1970s vs today?
- Love, absolutely love the reference to one of my all time favorite books "Men's search for meaning" - locus of control.
Great points. And lastly, but most important of all - people are less happy. More people are obese. More people accepted the "Rat Race" and keep working more to get even more stuff. It's like running faster on a treadmill.
And so we come full circle. Yes, the standard of living is better if you choose to live a particular way. But humans are humans, we compare ourselves to both the past we never saw and the current of "grass is greener on my neighbour's lawn". This creates competitiveness and instead of working less for a cheaper car, you get people leasing BMWs and committing to the "Rat Race" forever. This is an incredibly important topic for young people to understand.
You've talked a lot about money printing and inflation. Could be fun to dive deeper into the concept of Money (another episode?):
Money is a medium of exchange that should also be a storehold of wealth. Most of money as it stands today has no intrinsic value. They are just journal entries in an accounting ledger that can be changed (and are being changed!). What is the purpose of this
system? To help allocate resources efficiently so that productivity can grow. Rewarding lenders and borrowers - this can happen but the
system inevitably breaks at some point. We oscillate between paper (gold standard) money and fiat as part of a big cycle. Let's first agree that you cannot create more wealth by simply creating more money or more credit. To create wealth you must create productivity (value). To do that, you need to avoid inflation/deflation. So why does the gold standard peg always break? Why do governments inevitably always break this link and move to fiat?