Will the Cost of Living Ever Go Down?

In the twentieth century the economic game was all about getting consumers to spend more. The reason was that by this point businesses were producing significantly more than the customer could afford to buy, or was inclined to buy even when they did have the money, raising the problem of how that product was to be moved.

The result was the advent of consumer culture, complete with the advertising that said you had to have the newest and latest--and priciest--or you would, even if prepared to suffer a great deal of personal inconvenience by making do with an "inferior" product, be shunned as a social outcast (while the companies always made sure there was a newest and latest, often if this was entirely pointless). There was the built-in obsolescence that forced the consumer to buy the same thing over and over again (even before the new version came out). And, it might be added, there was some help from the prevailing politics, in which society didn't deal with problems and left individuals to cope as best they could--which is to say, as expensively as they could. (Urban life getting you down? Buy a house in the suburbs. And a car with which to get there.) And so on and so forth. In line with such a course central bankers made a point of making the borrowing that let consumers spend beyond their means (this, too, was a key part of consumer culture) cheaper than it might otherwise have been, while government "stimulated" the economy fiscally, too, to keep it running smoothly (not least, with those giant military-industrial complexes). And so on and so forth.

The economic growth model I describe here had a heyday in the post-war period--the boom years of the 1950s, the 1960s, the 1970s, when people were consuming more and the economy was growing and they made enough money out of it to consume still more than that. But before that decade was out it was clear that this model was no longer delivering the goods, because growth was sputtering out, profits down --while inflation was up too, how about that? As a result the model shifted in a lot of ways. ("Cry havoc, and let slip the dogs of finance!" is what the policymakers of the day said, minus the Shakespeare, which I suspect was well above their heads. Politicians in my lifetime haven't been the most literate bunch.) But the part about getting people to consume more stayed--in spite of those pesky environmentalists who went about saying there were "limits to growth."

For all the sound and fury we never really saw anything like the glory days of the mid-century boom, economic growth-wise. What little growth there was didn't really trickle down the way the reformers promised it would. And things have got much, much worse since, especially after the Great Recession--while that limits to growth talk has never ceased to haunt the conversation. The result is that few are really content with how things are going in 2022--not least a generation showing signs of being really and truly fed up with the associated "rat race."

For all that, it hardly seems that any dramatic change is imminent, but one may wonder nonetheless--is it conceivable that instead of so many putting so much effort into making people spend more and more, we could turn that capacity for INNOVATION! of which we hear so much (but, it can often seem, see so little) toward enabling individuals to enjoy an acceptable standard of living while spending less, consuming less, relative to today? Certainly the folks at the RethinkX think tank see us as on track toward a world where people can have "First World" comfort at "Third World" prices (and orders of magnitude less ecological impact to boot). Premised on innovations like cellular agirculture, Transportation-as-a-Service, and the "printing" of food, clothing and shelter, it can seem as if the essentials for it are things that were supposed to be near at hand for so long that this will always remain the case--while it is far from clear how well society will realize the potentials they allow even should the technologies themselves become a reality. Certainly the one part of their vision that has advanced most fully, the extreme cheapening of the price of computing and digital communications, has not quite played out the way the optimists of a generation ago hoped--while, even more than before, we live in a society which, rather than solving a problem, tells people to just "live with it." Those problems include a historic upsurge of inflation. Yet it seems that the failure gives us all the more reason to think the harder about what the conventional wisdom would have us write off as impossible.