The Gilded Age Comes to the Masses
George Mason University economist Bryan Caplan recently opined about how well we live compared to even the richest Americans at the end of the 19th century:
I just returned from the Biltmore, America’s largest home. Built by George Vanderbilt between 1889 and 1895, the Biltmore is a symbol of how good the rich had it during the Gilded Age. I’m sure that most of the other visitors would answer “very good indeed.”
But how many would actually want to trade places with George? Despite his massive library, organ, and so on, I submit that any modern with a laptop and an internet connection has a vastly better book and music collection than he did. For all his riches, he didn’t have air conditioning; he had to suffer through the North Carolina summers just like the poorest of us. Vanderbilt did travel the world, but without the airplane, he had to do so at a snail’s pace.
Perhaps most shockingly, he suffered “sudden death from complications following an appendectomy” at the age of 51. (Here‘s the original NYT obituary). Whatever your precise story about the cause of rising lifespans, it’s safe to say that George’s Bane wouldn’t be fatal today.
I visited the Biltmore when I was in elementary school and remember being struck by the novelty and opulence of Vanderbilt’s private two-lane bowling alley. Vanderbilt no doubt spent a small fortune to build his alley and employ the servants necessary to run and maintain it, but I use far better equipment to bowl in my weekly league than Vanderbilt could ever imagine. The ball return at my alley is likely faster and more reliable, and the pins are reset far more quickly and exactly by a machine than a low-wage pin setter. Finally, whereas Vanderbilt had to keep score on his own — or pay a servant to do it — I have a friendly robot to count up my pinfall for me and give me advice on my next shot.
In many — if not most — ways, the average American lives a far better life than even the richest mustache-twisting robber barons of the Gilded Age, and it’s all thanks to steady economic growth. If two economies started at the same level and one grew by an extra 2 percent each year, it would be twice the size of its rival in a little more than 35 years. The Nobel Prize–winning economist Robert Lucas once remarked, when contemplating the differences in international economic growth rates, “The consequences for human welfare involved in questions like these are simply staggering: once one starts to think about them, it is hard to think about anything else.” A similar idea is expressed more succinctly by a quote usually (but falsely, in all likelihood) attributed to Albert Einstein: “The most powerful force in the universe is compound interest.”
Rising living standards allow us to live longer, healthier, and, yes, even happier lives. (No, you cannot buy happiness with money, but as best we can measure these things, people on the average seem to get happier as they get wealthier.) Consequently, that means we should make high growth levels a priority in economic policy, and that requires us to keep taxes and government spending low.