At some point I’ll write another book and this point will be in it

We should change the inflation basket as tastes and incomes and spending change. But we must understand what we’re doing when we do so. What we’re not doing, by definition, is measuring the change in the price of the same lifestyle over time.

It’s the answer to those people who say that 50 years ago one wage could support a family. Sure, but the basket of goods, the standard of living being supported, was very different from what is the average we’re measuring today.

It wouldn’t surprise me at all if olive oil was in the CPI basket in the UK today. Back then it was sold in pharmacies, in dropper bottles, to cure earache.

There’s actually a project in that. If anyone would like to bung me a decent advance, say £30k, I’ll get right on it. How much would it cost today to live as the average in 1980, 1970, 1960…..we’ve got the CPI basket going back to 1945 I think and I’m sure someone has the weights around as well. I think people would be astonished at how cheaply, today, you could live as our grandparents did when they were bringing up their children.

Just think of the housing costs savings of shared bedrooms and no central heating…..

21 comments on “At some point I’ll write another book and this point will be in it

  1. How would you factor in the improvements in stuff that is largely the same? A car for instance is still just a car, it runs on petrol, it gets you from A to B. But todays car is infinitely more reliable than that produced by Longbridge’s finest on a Friday afternoon, will last twice as long, and have far more safety and driver comfort features. You can’t buy an unreliable shitheap of a car brand new nowadays, so how do you factor in that in working out what it would cost to live exactly like 1975?

  2. In as much as extravagant twattery is now considered normal and those in the past were more inclined to cut their cloth in accord with their means you are correct Tim.

    That you think modern profligacy a virtue rather than the vice it is not a good thing. As witness the UKs level of personal debt.

  3. That’s called hedonic improvement and the statisticians struggle with it but do the best they can.

  4. How would you account for the effect of monetary controls? Nowadays, people who travel abroad for a holiday can pretty much spend what they like, blowing a chunk of their yearly savings on sun, sea and sex.

    Back in the days of monetary controls, the UK gov would tell you how much you could have for your holiday and you pretty much had to try and have a good time within that budget.

  5. That’s very kind but I very much doubt that the target would be reached. Need a publisher. Preferably one with more money than sense of course.

  6. No sooner did one get to university, and therefore out of a shared bedroom, than one was looking for a girl with whom to share a bedroom.

    If you’re going to go back to ’45, though, how are you going to allow for the reduced availability of, y’know, thingy?

    Larkin: Annus Mirabilis (edited)

    Sexual intercourse began
    In nineteen sixty-three
    Between the end of the “Chatterley” ban
    And the Beatles’ first LP.

  7. @Pro Bono

    “Yes, olive oil is in the basket.
    Can I take it that you approve of writers guessing facts to support their arguments?”

    He wasn’t guessing a fact, he said it wouldn’t surprise him. From that we could extrapolate to the broader point – to sustain that broader point it wasn’t and isn’t necessary for the specific guess to be accurate, it was merely illustrative.

    You seem to disagree with the broader point (I think you’re not a fan of the Worstall oeuvre)? The way to do that effectively is to find that it is not true that we live differently (and much better) now than we did a few decades ago.

    But you have chosen (I assume) to disagree with that broader point while verifying the guess, which is eccentrically arse about face (if you don’t mind my saying so).

  8. ” Need a publisher. Preferably one with more money than sense of course”

    How about the ones who publish Spud’s illiterate diarrhoea?

  9. As two-income families became the norm after women entered the workforce surely house prices simply inflated accordingly. Subsequently, any new-formed single-income families have struggled largely because of this one effect.

  10. Sounds like it would be a perfect topic for a PHD. Perhaps Spud has some spare students who could pick it up?

  11. “That’s called hedonic improvement and the statisticians struggle with it but do the best they can.”

    Yes I’ve heard of hedonics, but thats more about working out how much the improvements in goods are worth to someone living today, with todays technology. Its not about how much cheaper you could live if you lived in exactly the same manner people did decades ago.

    My point is that you can’t live today in the same manner you would have 40-50 years ago, its not physically possible on a number of ways, so you can’t put a number on how much ‘cheaper’ it would be to live that way now. I’ve mentioned cars, there’s also houses – you’d be struggling to find a house now that wasn’t centrally heated, double glazing and didn’t have hot and cold running water. So working out how much it would cost today to live in a draughty unheated house with outside lav and leaky roof wouldn’t be possible, you can’t live like that, they’d condemn the house. You can calculate a notional value of those improvements in houses for people today, but that figure is of no use to a person in todays world because they can’t go an buy or rent a 1950’s quality house and live in it.

  12. wat,

    I’ve been pointing that out for some time only to be accused of being a misogynist etc. Pointing out obvious trade-offs to the left, and sometimes not so left, is akin to banging your head against a brick wall.

    Now that politicians talk a lot about household incomes I’ve seen a few calls for household incomes to be taxed as an entity rather people. Pointing out the obvious flaws, its going back to women being chattel being an obvious one, even with numbers is another head banging against wall task.

  13. As a counter thought, I’ve tried to think of stuff that has both increased in price and declined in quality. Here are a few examples, suggestions of others most welcome:
    Lager. Barely worth processing before pissing it on the roses.
    IKEA furniture
    Weddings (though I don’t have a large enough data base)
    Secondary education
    Old Peoples Homes
    The movies (says old fart who hardly ever goes to one)

  14. We now have the Worstall Index to add to the Worstall Fallacy.

    If it is to be valuable then it needs to last 100 years say and its meaning needs to be the same in 100 years as it is now. Indexes are designed to appear in time series and if we are charting costs then “good” is a line that goes down and to the right.

    In his article Tim has two points of reference
    * change since 1945
    * compared to our grandparents

    Thus there are two presentations
    * Cost today of living like in 1945
    * Cost today of living like your grandparents (today – 50 years)

    Tim says it about “lifestyle”, as others have noted it becomes increasing difficult to meaningfully compare lifestyles as you go further back. Therefore I suggest,

    Cost to live like your Grandparents did 50 years ago (100 == same cost).

    The first point on this index would be 1995 and therefore we would have 23 points now. I expect that they would go down and to the right like all good costs.

    Newspapers would publish Worstall’s index (Service Mark) each year together with human interest stories.

    You can buy me a pint from your first paycheck.

    Would be a sensible measure.

  15. I think if you were living in London rented your house, drank in the pub a lot and smoked you would be better of fin the past than now especially if it was a council house and is now an ex council house.

  16. The Worstall index depends on too many factors to be calculable. Under the Worstall index I would probably have had a decent life in Kensington and Chelsea 50 years ago but could not afford to live anywhere in London today.

    In the same way my new proteges can barely afford to live in the suburb of what, in Germany, passes for a city that I currently find affordable today.

  17. @Interested
    I think Tim’s broad point is right – in many ways we’re much better off than we were. For example one can look up almost anything in seconds…

  18. What about housing costs? My parents did not have to pay a small fortune in moving tax in the 80s.

  19. +1 Pro Bono
    We can do things so much quicker – want to know how to prune a tree – it would cost you 5 minutes now.
    Or going on holiday to the Highlands or Devon takes a couple of hours less driving than in 1967, despite the CPRE claiming that building new roads doesn’t get anyone there any quicker. So more holiday value for your buck.

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