We Are Richer Than Our Parents. So Why Do We Feel Poorer?
More Prosperity. Less Security.
There is something economists should probably explain better.
By almost every conventional measure, citizens of developed economies are richer than their parents were.
Our homes contain technology that a billionaire could not have bought in 1985. A smartphone combines a telephone, television, camera, map, library, bank branch, travel agency, newspaper, music collection and computing power that once required an entire room.
Air travel is accessible to millions. Medicine has improved dramatically. Cars are safer. Information is almost free. Entertainment is unlimited.
And yet ask a 30-year-old in Milan, Madrid, London, New York or Toronto whether he feels economically privileged compared with his parents at the same age.
The answer may contain language unsuitable for an economics textbook.
This is one of the most interesting economic paradoxes of our time:
we have become extraordinarily rich in products and surprisingly poor in economic certainty.
Perhaps the problem is not that living standards have stopped improving.
Perhaps we have confused two very different concepts:
the ability to consume more things and the ability to afford a life.
Those are not the same thing.
The €1,000 television and the €500,000 apartment
The modern economy has been extraordinarily good at making manufactured goods cheaper, better and more accessible.
Televisions became larger and cheaper.
Computers became exponentially more powerful.
International communication became virtually free.
Clothing became cheaper.
Consumer electronics became almost disposable.
But consider the things that define adult economic security rather than consumer entertainment:
housing;
education;
childcare;
healthcare in several countries;
eldercare;
insurance;
and, increasingly, retirement security.