CHAPTER 7: GETTING RICHER OR POORER? SAFER OR RISKER? MORE OR LESS EQUAL? This chapter is about social issues and the quality of life. Here we shorten the time horizon to examine how we have been doing during the past decade or so, a period during which many people believe we have been doing worse rather than better. About Quibbling: When people hear that air and water pollution in the United States are less now than they were thirty or forty or fifty years ago, they often reply: But what about compared to 200 years ago? And when they hear that there are more trees growing now than there were twenty or thirty years ago in the United States, people then say: But what about compared to a thousand years ago? These questions truly are quibbles, because they avoid the issue that we must all agree is central here: What is the trend that pertains to the future? And what is the trend that pertains to the future relative to health? There is a fallacy here which may be called the "compared to what? fallacy," or the "Voltaire fallacy." It chooses an unreasonable point of comparison in order to make a rhetorical point. This sort of quibbling emerges when the hearer is unwilling to accept the particular proposition, usually because the quibbler sees the particular proposition as part of a larger complex that he/she believes in strongly. And of course a skilled quibbler can go on forever finding quibbles that will satisfy him/herself, even if they become more and more far- fetched. Getting Richer or Poorer? Measured in the most basic of ways -- by what we own and what we use -- we have been getting richer. We have more cars, more telephones, a wider variety of foods, more appliances of all kinds -- you name it, we've got it. [Tony: The data will be shown in some graphs beginning at the turn of the century, and continued to the end of the decade, based upon the attached Table 7-1.] Table 7-1 --Assets And Consumption Housing deserves special attention, because of the fallacious belief that it is getting harder for us to afford decent housing. We see in Figure 7-2 that the price of renting has not been increasing over the decades, and the stock of housing, in both physical and dollar-value terms, has been going up rather than down. This squares with the data that show increasing quantities of floor space, number of rooms per person, central heating, and indoor toilets. Figure 7-2 -- Housing But Is This The Result Of Borrowing And Mortgaging Our Future? Here we begin to pitch our way through Quibblers Row. No matter what data one cites in rebuttal to the objection Quibbler has just made, still another "but what about the..." objection is raised. It will never be possible to exhaust the last "but what about." The only hope is that, as we continue meeting the objections one after the other, some fair-minded bystanders will realize that the picture of continued improvement in the human condition is not a mere illusion, not some false soothing optimism concocted by liars who would pull the wool over the unsuspecting public's eyes, on behalf of a big-business conspiracy. So, to show that our increase in possessions is not due to increased borrowing which mortgages our future, we first see that our net worth has been increasing, as in Figure 7-3. Figure 7-3 -- Net Worth [I hope to be able to also present data to show that this is true not only for the net worth of the mean person, but also for various the median and various deciles, to show that it is not only the rich who have been getting richer. See Warren Brookes.] Figure 7-4 shows that our rate of saving has not been falling over the decades, but rather has been a stable proportion of our increasing income. This is another measure showing that we are not living it up in the present at the expense of our future welfare and that of coming generations. Figure 7-4 -- Saving Rate But What About The Trade Deficit, The Budget Deficit, And The Exchange Rate Of The Dollar? When the dollar rises, as in 1986, there is panic. When the dollar falls, as in 1989 (?), there is panic. Much the same is true of the trade deficit. These issues are like turnovers in football -- what one team loses, another team gains, and the very nature of the game is turnovers back and forth. This does not mean that some bad thing is happening. The budget deficit is a more complex animal. A deficit by itself is not a bad thing, with all due respect to politicians and journalists. Please be aware that economists, whose business it is to understand these things and who created the very data systems that measure deficits, are less worried by deficits than are non-economists, and the economists also tend to notice the recent decline in the deficit as a proportion of national income (Figure 7-5). The main issue is total government spending, whether financed by deficit borrowing or by taxes, and that is a (largely) congressional decision and not necessarily a sign of economic ills. (I believe that high spending often causes social ills, but that is beside the matter here.) Figure 7-5 -- Deficit As A Percent Of GNP But What About Our Declining Earnings? Earnings are a tricky issue because they can be measured in many different ways -- per family, or per person; holding age constant or not; holding education constant or not; average or median or in various income deciles; standardized by which deflator? [Tony: I'll try to make some sense of this matter. The overall picture does not show decline, almost surely, and may show modest increase during the past decade.] Figures -- Earnings But What About Productivity? This is another complex issue where the most recent data has the U. S. looking pretty good. The reports of our death have been highly exaggerated. See Figures 7-0 and 7-0. Figures 7-0 and 7-0 -- Productivity But What About The Poor? The most telling indicator is that the criterion of being poor has been going up over the years, as I shall show. That is, people who have been better and better off could with the passage of time be considered poor and obtain assistance. [See Becky Blank article]. After rising for decades, the money-value income of the poor may have remained constant during the last decade, or it may have risen, but it did not fall, as Figure 7-0 shows. Figure 7-0 -- Poverty Data Table 7-0 shows that compared to the non-poor in previous decades, and compared also to people in other countries (Table 7- 0), the relative situation of the U. S. poor is not bad, even if the absolute situation of the poor is not to be envied. Tables 7-0 and 7-0 -- Comparative Poverty Data But What About Racial Inequalities? A Quibbler's Favorite is to find some measure on which some discriminated-against group does poorer than the average. By focusing on the relative effect, Quibbler leaves the impression that the general picture is getting worse. A favorite Favorite in the past decade has been the black infant mortality rate compared to the white rate. But Figure 1-0 makes it clear that the real story is the dramatic fall in all rates, to levels that only a decade ago were thought impossible. Yes, the black rate could be much better, and deserves attention. But blacks certainly are better off than they used to be, or even than whites were only a short time ago. Is this progress or is this deterioration? (When I pointed this out to a group of journalists, one sagely observed that this line of argument knocks the props out from under much moral indignation -- a stable of modern journalism.) Black versus white income and education levels constitute a similar issue. Figures 7-11 and 7-12 show how fast the gaps have been closing. [June O'Neill, and stuff in Life Is folder.] Figures 7-11 and 7-12 -- Black-White Income and Education But Isn't Most Of The Decline In Mortality Just At Birth? Contrary to much "sophisticated" belief, mortality has recently been dropping at a faster rate in the older brackets than in the younger brackets. See Figure 7-0. Figure 7-0 -- Mortality At Various Ages But What About The Increasing Likelihood Of Technology-Caused Disasters? The data show less likelihood of disasters. Mortality from major disasters declines (see Table 7-0), along with data from accidents generally (see Table 7-3 from Arlene Holen), because richer means safer, as Aaron Wildavsky puts it. An earthquake in Soviet Armenia causes tens of thousands of deaths because the homes were jerry-built, without steel reinforcment; rich countries build better, as San Francisco is better built now than in 1906. Tables 7-0 and 7-0 -- DisastersBut What About the Increase in Cancer? You ask: What about the increase in cancer? I ask: What increase? Every age-adjusted cancer rate except lung cancer has remained constant or declined. As then-head of the National Academy of Sciences Philip Handler put it, we are not facing an epidemic of cancer, we are facing an epidemic of life -- people living longer so that they die late from cancer instead of early from tuberculosis or industrial accidents. Figure -- Cancer Rates But What About The Rest Of The World? Let no one deny that there are poor and downtrodden in the world, and in some parts of the world -- perhaps even parts of the U. S. -- some groups are suffering more than in the past. But in the broadest aggregate, humanity is doing better rather than worse. The most important measure is life expectancy, as discussed in Chapter 1. And infant mortality, an important index of health and nutrition, has been falling rapidly almost everywhere in the world. (Eastern Europe is an important exception. The experience there and in sub-Saharan Africa and in China shows how dependent is human welfare upon the type of economic and social system a country has, and how it is still possible today for bad government to worsen the human predicament to a very miserable state). Other important indices include such measures of wealth as the numbers of autos and television sets in the world. Perhaps most important for the future, as well as for outlook of the young, is the rapidly increasing amount of education that is being afforded by young people at all educational levels throughout the world. (See Figure 7-00 -- [data I collected some years ago, to be updated.]) The most exciting aspect of this increase in schooling is that it demonstrates the increase in opportunity for those rural billions who only a few short decades were doomed to live out their lives in illiteracy within isolated villages. Now more and more of those people from rural places in "backward" countries are able to struggle their way to eventually become students and then talented and productive professors of engineering, biology, and computer science at the finest universities in the United States and Europe, or as research workers in the world's great laboratories, or as business people in their own countries. To those who criticize as lacking in compassion my belief in enterprise and freedom as the best promise of success, I point to this measure of human welfare -- the increasing ability of people born anywhere to realize their talents and to contribute the products of their work and imagination to the world at large. Does this vision lack compassion? Figures 7-00 -- Education But What About the _______? You fill in the blank with the matter that concerns you. But please don't conclude that because your pet concern has not been addressed here, that the data will not reveal it, too, to be a good rather than bad story, along the lines of the other matters discussed in this chapter and book. Chances are very strong that the trend is positive in any basic facet of human welfare. socioeco 1-207 whittle March 12, 1991