Generally, The Guardian writers are to economics as astrologers are to astronomy, and George Monbiot has been trying very hard in 2016 to win the 'Most foolish article of the year award'. However, for your humble author, Monbiot was beaten to the title at the final furlong earlier this month by Patrick Collinson, who spent a whole article trying to explain to us how people earned less in the 1960s but could afford more.
It's rare to see so much confusion crammed into one short piece of writing, but what helps Collinson achieve this feat is that he has no real clue about how inflation works. In the title he declares
"Oh for the 1960s! People earned less but could afford more."
This is factually untrue on every level: it's untrue in the sense that your earnings do very much determine what you can afford; and it's untrue in the sense that people of today can literally afford a lot more for their money than in the 1960s. He goes on:
“By chance it was the same week my 90-year-old father decided to show me his carefully filed tax returns from the 1960s (yes, that’s what counts for fun in the Collinson household). In 1963-64 his pay as an accounts clerk in
was £1,357 a year. In today’s money that equals a little over £25,000 a year
once inflation is taken into account. In some ways that £25,000 doesn’t look so
great. After all, someone working in a similar role with his level of
experience at the time might expect £35,000-£40,000 today. But then look at
what an income of £25,000 bought in 1963 in London . His granddaughter now works in the
same city, London ,
for the same pay, £25,000. But what does an income of £25,000 buy you in 2016?" London
Wowsers, this is also absurd! Apart from a few minor details that don't affect the efficacy of the point, by and large inflationary measurements mean that if £1,357 in 1963 is the same as £25,000 in 2016, then £1,357 in 1963 buys you pretty much the same value of goods and services as £25,000 does in 2016. I included the disclaimer because relative prices means different relative quantities in some goods over time, but on aggreggate considerations, inflation is calculated on the basis of comparable goods for comparable sums of money.
He then goes on another lament, this time about how much harder it is to afford property in London nowadays than it was in the 1960s, concluding that "If any government really wants to help the left-behinds, then cutting house prices and rents must be their first priority". The first glaring mistake is that governments don't cut house prices and rent - it's the private sector that determines prices. The second mistake is that it may have been easier to buy property in
London in the 1960s than it is now,
but some of the variance is down to how much more of a high quality and hugely desirable
today than it was in the 1960s. Lastly, there are numerous ways that the government
much to blame for why London
house prices are so hard to afford. London
But really, the primary criticism of Collinson's lament about how things were better in the 1960s because people earned less but could afford more is that it inanely overlooks all the absolute gains in terms of quality of life, quality and quantity of goods and services, increased leisure time, and the numerous other ways that it's better to be alive today. To illustrate this, I would ask Mr Collinson questions I first raised in this Blog post - questions I think we know perfectly well how he would answer them:
1) Would you rather go about making Sunday lunch for five guests in a 2016 kitchen or in a 1960s kitchen?
2) Would you rather need a heart operation in a 2016 hospital or in a 1960s hospital?
3) Would you rather have the holiday options in a 2016 travel agent or the holiday options in a 1960s travel agent?
4) Would you rather be defended by the
armed forces or by the armed forces in the in the 1960s? UK
5) Would you rather be a woman, or a black person, or a homosexual in
in 2016, or a woman, or a black person, or a homosexual in the in the 1960s? London
6) Would you rather have the knowledge of the world available to you in 2016 or the knowledge of the world available to you in the 1960s?
7) Would you rather have the working week of 2016 or the working week of the1960s?
8) Would you rather have the digital technology of 2016 or the digital technology of the 1960s?
9) Would you rather be driving a car of 2016 or a car of the 1960s?
I think we know which options our Guardian writer would choose - and on that note we can end.