Russ Roberts

Easterbrook on the American Standard of Living

EconTalk Episode with Gregg Easterbrook
Hosted by Russ Roberts
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Author Gregg Easterbrook talks about the ideas in his latest book, The Progress Paradox: How Life Gets Better While People Feel Worse. How has life changed in America over the last century? Is the average person getting ahead or are the rich taking all the gains? Easterbrook argues that life is better for the average American in almost every dimension. The paradox is that despite those gains, we don't seem much happier.

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Readings and Links related to this podcast

Podcast Readings
HIDE READINGS
  • Gregg Easterbrook's Home page
  • The Progress Paradox: How Life Gets Better While People Feel Worse, by Gregg Easterbrook, at amazon.com
  • A Moment on the Earth: The Coming Age of Environmental Optimism, by Gregg Easterbrook, at amazon.com
  • The Economics of Religion. Podcast with Larry Iannaccone.
  • Industrial Revolution and the Standard of Living, by Clark Nardinelli. Concise Encyclopedia of Economics.
  • Highlights

    Time
    Podcast Highlights
    HIDE HIGHLIGHTS
    0:55Is the average person sharing in the increased prosperity in America? What is the evidence? Living standards have been rising since the end of WWII. Housing size, television, cars, education, longevity up. Crime, pollution, discrimination, disease rates down. Divorce rate, drinking, unwed births. Recessions still occur but are shallower. Since 1991 recession, unemployment low, inflation low, productivity keeps rising. "We are now in our twelfth year of what would have been considered full employment in the '60s and '70s."
    7:44Middle class income growth is low, but stall is at highest level ever. Immigration affects measurement of middle-class income, insurance rates, school test scores, but doesn't mean existing citizens' experiences in those categories have deteriorated. Pessimists cherry-pick data to paint a gloomy picture without considering demographics. Health care, knee replacement example.
    14:34Transition over last 100 years. One hundred years ago living conditions were dramatically worse. Freedoms, education were much lower. Quote from p. 82 on living conditions in the first decade of the 20th century. We selectively romanticize life in the old days, but daily life was much harder than today.
    18:59How was book received? "Good news scares people or makes them angry." Reporters, politicians institutionally prefer scandal and claims of doomsday to evidence of progress. Optimism seems to imply to some that there's nothing left to do. Establishment press reviews sneered at book as Pollyana-ism, but everyone else has loved it.
    29:54Why aren't we happier? That's the paradox. Psychological data indicate that, despite all these increases in the standard of living, percentage of Americans who describe themselves as happy has not increased. But what is being measured? What do we mean by "happiness"? Is what people say about their happiness different from their behavior? Daniel Kahneman: order of questions matters. Evolutionary psychology: likely that we are descended from a discontent of the past. Maybe humans are predisposed to complaining. Stress, anxiety, cortisol. Belief in meaninglessness (reduced religiously or ethically based sense of purpose), college education. Larry Iannaccone. Is number of people who believe life has meaning in decline? How does Europeans' happiness compare to Americans'? Ireland, Japan, France, Germany, Scandinavia; honesty.
    39:10Maybe unhappiness may be default human condition simply because it's easier to obtain than happiness! Materialism is an easy goal. Much harder to contemplate how to get develop a philosophy of life than to shop! Is discontent actually good for society because it generates productivity? Christmastime spending illustrates confusion: the economy is what those who live in it want it to be. Shorter hours may be what people want; byproduct would be lower measured income. Edward Prescott, European tax policies.
    44:22Why are people pessimistic? Even educated guesses routinely underestimate improvement in last 100 years. Drumbeat of negativity may affect people's perceptions. Abundance denial: How much money is needed to "live well"? Answer is always twice as much as they earn, regardless of how much they earn. Ability to dream and plan for future unique to humans. PBS reality shows, "Frontier House," Victorian House, etc. What can I do to improve my sense of well-being? New field of Positive Psychology points to gratitude, forgiveness, and optimism as actually making people happier.

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    COMMENTS (8 to date)
    Ville writes:

    Thanks for the upbeat and interesting podcast! :)

    Another fascinating look at how things have improved world-wide during the couple last decades is provide by Hans Rosling in the TED talks series: http://www.ted.com/tedtalks/tedtalksplayer.cfm?key=hans_rosling The absolutely fabulous statistics tool on display is free to use at http://tools.google.com/gapminder/

    Pascal Bernhard writes:

    Sir,

    another look at why many or even most people are glum about their personal situation would take into account relative well-being compared to that of others. People tend to forget or discount their real, absolute well-being, when they see, or think, that others can afford more goods or services. As you pointed out happiness is an intrinsically personal and thus subjective feeling. So many perceive themselves to be happy only when they believe that they are at least as well-off if not more so than people they hold to be at a(justified as they see it) standard. When this is not the case, even if they do not live in poverty or face any substantial level of violence, they consider themselves unhappy. A case in point would be the outrage about the "horrendous" paypackages many managers (granted some are definitively not earned by good management performance) receive, even though it is safe to assume that many of the outraged are not personally "robbed" by holding stocks of these companies thus foregoing their dividends.
    Secondly, it is true that many cititens of continental Europe feel quite unhappy, which I coinsider justified. In the peoples' perception the overall social and economic situation in their countries have gotten worse since the downfall of the Berlin wall. We now face globalisation, international competition, liberalisation of an increasing number of markets and gone are the days of an unrealistically generous welfare state and high job protection for people in work. Most people here do not like change, they regard it rather as a threat to their known life style.
    But fact is also that the younger generations of Europe, entering the job market or younger, are less and will be less well off than their parents and grandparents. Today we have mass unemployment and our education system is failing, so it is getting harder to find a job and we do not enjoy the same (questionable but quite cosy) job protection. In addition things are getting worse because those who are in work do not want to see their status and benefits change, if it might lower unemployment. The public debt will balloon in the next decades and the dependancy ration will deteriorate. On top of that the median voter in Germany is already around 44 years old and will get older, so that parties acting in the interest of their electorate are loath to push through hard reforms, needed as they are. So things are set to stay on their path of "trend decline".
    Finally we do not believe (naively) that ours is God's own country and that we live in great nation.

    Alvin writes:

    Russ,

    I'm looking forward to listening to this podcast. I read most of the book. When I saw the name "Easterbrook," I immediately thought of the distinguished federal judge who sits on the same court with Judge Posner. Any chance of bringing Judge Easterbrook on as a guest in the near future? That would be awesome.

    Alvin

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    Richard writes:

    Have you ever thought about doing one of the shows on crime (e.g., the claimed links between abortion and crime)? How about campaign finance regulations? Don't economists do a lot of work on these topics?

    Ken Willis writes:

    Easterbrook says he wants "open borders." So do we abolish the Customs department and the border patrol? Take down the buildings and booths at the border, and put up signs in English and Spanish that say "Welcome to the United States?" I guess we might as well since they aren't very effective anyway.

    But what about the criminals and drug runners who slip into the U.S. to commit crimes and then high tail it back to Mexico? Would he concede that is not an ideal situation?

    Tomi writes:

    Is "country" really a particularly good criterion when trying to find reasons for happiness. I mean, people's happiness must vary considerably depending on such things as their working hours, wealth, and health. Thus it would have to be a much more reliable study if those things and their relation to happiness were factored in, and not so the country they happen to live in. A few concrete examples: any person who don't know if he or she will die of hunger the next day can't be happy, a person who can afford to get cured of cancer probably feels happier than a person who can't and dies of it, an average wealthy person doesn't feel happy if he or she has to work "overtime" in order to acquire the wealth, and so on.

    Anyway, if the "geo-political position" of a person is considered important, once again we heard that the Europeans are much less happy than the Americans. And once again it turned out that "Europe" meant France and Germany. In reality six out of the the ten happiest peoples are Europeans according to this recent study:
    http://www.eurekalert.org/pub_releases/2006-07/uol-uol072706.php
    The USA ranks far below many west-European countries.

    KmeleAnthony writes:

    I genuinely enjoyed the Progress Paradox, right up until Easterbrook’s analysis of the challenges facing America’s poor. Somewhere between his advocacy of minimum wage hikes, and universal health care, and the “lack of character” of 21st century American executives (how dare you take as much as someone is willing to pay you) - I began to nod off.

    I’ve since torn out the offending pages – and now lend the book out to friends and family only in its redacted format so as not to reinforce typical misconceptions they likely already hold.

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