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Culture War Roundup for the week of November 24, 2025

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Consider the following thought experiment, courtesy of Scott Summer

If the official government (PCE) inflation figures are correct, my daughter should be indifferent between earning $100,000 today and $12,500 back in 1959. But I don’t even know whether she’d prefer $100,000 today or $100,000 in 1959! She might ask me for some additional information, to make a more informed choice. “So Dad, how much did it cost back in 1959 to have DoorDash deliver a poke bowl to my apartment?” Who’s going to tell her there were no iPhones to order food on, no DoorDash to deliver the food, and no poke bowls even if a restaurant were willing to deliver food.

Your $100,000 salary back then would have meant you were rich, which means you could have called a restaurant with your rotary phone to see if it was open, and then gotten in your “luxury” Cadillac with its plastic seats (a car which in Wisconsin would rust out in 4 or 5 years from road salt) and drive to a “supper club” where you could order bland steak, potatoes and veggies. Or you could stay home and watch I Love Lucy on your little B&W TV set with a fuzzy picture. So which will it be? Do you want $100,000 in 1959 or $100,000 today?

I think this is a good counterpart to the AGI questions below. There is a massive conceptual gap in defining welfare across vastly different levels of technological mastery.

It also highlights that some of the analysis misses the largest factor here -- that AGI (if it happens, sadly not if it doesn't pan out) will greatly increase the quality and personalization of a large set of goods & services. If that does happen, it will dwarf the distributional aspects.

That's not how inflation works. Inflation has already taken that into consideration. $100k in 1959 would be the equivalent of $1.1 M today. If that's your annual salary, you could be hiring maids to drive to the grocery story and do your shopping for you, personal chefs to make whatever you want out of whatever recipe cookbooks you got for them, foreign or domestic, and delivery drivers to do your shopping while you sit in your home cinema.

Yes, you wouldn't have smartphones or modern medicine, but you'd have the best things available to anyone at the time. This is a bad thought experiment comparing middle class now to middle class 1950s. The entire point is that you would not be middle class, you would be rich. Why would a rich person have a little TV set with a fuzzy picture?

Yes, I would rather be rich now than rich then, if I could choose between $1.1 M now or $100k in 1959. But that's not what he said.

That's not how inflation works. Inflation has already taken that into consideration.

Not it does not. Inflation measures so called "basket of goods" and their price. The problem is, that goods and services inside the basket change a little bit from year to year, plus there are qualitative changes from decade to decade. For instance as of 2025, the price of internet access plan is part of basket of goods and services incorporated into inflation. There was nothing like that in let's say 1950. How could you possibly account for this? The same goes for qualitative change - TVs in 1950 are different from TV in 2025, just measuring the dollar price of TV does not provide the full account of change in quality baked in the price, these are not the same things.

By the way, there is a theoretical framework in economics around this, called Arrow-Debreou model specifically the subsect raleted to time, space, and uncertainty. To simplify - the "same" goods in different time and place are not the same goods. A bottle of oxygen in your local hardware store is completely different good from a bottle of oxygen near the peak of Mount Everest. The difference is so stark, that you cannot just average the price or something like that. This is a long known issue in econometrics.