Isomorphismes is one of the most articulate commenters on my blog. His post explores the fact that economic growth usually shows up not as a general increase in income for the same set of goods, but rather as the introduction of a new good or reduction in price for some particular good. This explains some of why people don’t “feel the growth.” People think of getting rich as moving up the ladder to the consumption bundles that those high in the income distribution have. Economic growth delivers something unexpected, which is just as good, but may not be fully appreciated.  

Here are three passages to give you the flavor of this post by isomorphismes:

The picture we are now getting in “the news media” is of rich economies (US & Europe) that have ground to a halt, are not producing jobs, median wages stagnating…

… what does capitalism look like in a rich world with many people making low wages?

I think it looks exactly like this: the poor people have a good standard of living in terms of absolute magnitude, but they have little freedom. With a tight budget constraint (near the origin) obtusely and extremely scalening off in various directions of cheap stuff (sox, packaged food with lots of preservatives, canned food [can o’ corn], modular homes, satellite TV, Budweiser beer, … the only way to live like a richie is to buy specifically the stuff that is cheap

… what does a world with high productivity, low wages to many and high wages to some, look like?

• Most obvious is envy. You are going to watch Americans go live like kings in Thailand, Brits go live like kings in Argentina, mansions in the Gran Canarias, chalets in Andorra and beach houses in Tahiti. All of this will be technologically possible but out of reach for you. So you will be aware that it’s possible and that somebody’s doing it and loving it, but not you.
• Next is opportunity. The more money our robo-programmers make, the more they are going to want to free up their time and have every service done for them. Massage therapists, personal trainers, life coaches, psychotherapists, cleaners, cooks, upscale morticians, model organic farms that you can vacation on, drug dealers, hoteliers, sycophantic investment researchers, and personal assistants all have opportunities to form the perfect life for the robo-programmers, tending to their every need and desire, and get paid for it. Service economy, ho!

Note: In a link post like this one, where the title sends you to the post I am flagging, the way to get to the page for my post (for example, to leave a comment to my post here as opposed to isomorphismes’s post) is to use the “all posts by date” button on my sidebar.