Who Wants to be a Billionaire?


Route 66 Plaza at old 11th Street Bridge ID’d by Ryan Mahoney and Greg Morris

My title plagiarizes a column by George Will, the bow tied conservative whose column, often published in the Tulsa World, usually causes my blood to boil, except when he writes about baseball.  I’m taking a break after discovering another Limited Thinker at the 1889 Institute in my recent posts Miserables Love Company, Later, Sooner and Double, Double, Toil and Trouble, and from critiquing the Oklahoma Council of Public Affairs that is desperately trying remain relevant this legislative session as the Governor and Legislature grapple with the results of the Oklahoma Council of Public Affairs fiscal policy that assured Oklahomans cutting taxes would increase revenues.  I’ll get to a post by Oklahoma Council of Public Affairs Vice President for Strategic Initiatives (wow!) Trent England who claims in “The Bogus Budget: Money for Schools” that public schools’ expenditures are increasing by about a billion dollars from FY 2016 to FY 2017.  I sent an email request for his data, to which he forthrightly replied, and after a quick look predict that it will be easily de-bunked.  We’ll see how accountable this Strategic Initiator is, or is he like another Oklahoma Council of Public Affairs limited thinker Dave Bond who just makes stuff up.  (see Done Waiting for Mr. Bond and Waiting for Dave Bond)

The George Will Column, is based on a post by “Don Boudreaux, an economist at George Mason University’s Mercatus Center and proprietor of the indispensable (Will’s adjective) blog Cafe Hayek, entitled “You are as rich as John D. Rockefeller. Richer, actually.””  I like it because it is an important reminder to our current citizens who are not geezers like me about just how far we have improved the quality of life for the average American in the last 100 years.  I tried, with less eloquence, to do the same in my post They Made It Look Easy.  Will and Boudreax graphically demonstrate the improvements we enjoy, leading them to posit that a middle class American actually enjoys a better quality of life than J. D. Rockefeller in 1916—and I agree.

But I bet we don’t agree on the reasons.  Will is a self-professed “conservative”.  Boudreaux reveals his colors by naming his blog “Café Hayek”.  You see Frederick von Hayek is the author of the Road to Serfdom which is a classic among academic economists, like Paul Ryan’s fave “Atlas Shrugged” by Ayn Rand, is among self-professed worshipers of “free” markets.  He was Austrian and apparently experienced a very bureaucratic governmental system that stifled private sector economic initiative.  It was the kind of bureaucracy that inspired Kafka’s novel/play “The Castle” which Linda and I enjoyed seeing a few years ago performed by Philadelphia’s Idiopathic (a new word to me) Theater where the main character tries without success to penetrate the mysterious bureaucracy that controls the village where he has arrived.

Every example Boudreaux provides of progress in our quality of life has behind it, in my opinion, an important part that government played in making it happen—government that has acted with purpose and intelligence to make improvements that can and should be accomplished collectively.  But this is not Hayek’s, nor The Castle’s, view of government and probably not Boudreaux’ either because there is no mention of it.  So what follows is Will’s column interspersed with some of the government actions that supported the improvement in our quality of life over the last 100 years.

Who Wants to be a Billionaire (in 1916)?  By George Will

“Having bestowed the presidency on a candidate who described their country as a “hellhole” besieged by multitudes trying to get into it, Americans need an antidote for social hypochondria. Fortunately, one has arrived from Don Boudreaux, an economist at George Mason University’s Mercatus Center and proprietor of the indispensable blog Cafe Hayek.

He has good news: You are as rich as John D. Rockefeller. Richer, actually.

Some historians estimate that on Sept. 29, 1916, a surge in the price of Rockefeller’s shares of the Standard Oil Co. of New Jersey made him America’s first billionaire. Others say he never reached this milestone and that Henry Ford was the first. Never mind. If Rockefeller was the first, his billion was worth $23 billion in today’s dollars. Boudreaux asks if you would accept this bargain: You can be as rich as Rockefeller was in 1916 if you consent to live in 1916.

Boudreaux says that if you had Rockefeller’s riches back then, you could have had a palatial home on Fifth Avenue, another overlooking the Pacific, and a private island if you wished. Of course, going to and from the coasts in your private but un-air-conditioned railroad car would be time-consuming and less than pleasant (Today we have commercial and private aircraft that rely on the Federal Aviation Administration to regulate and keep airways safe.  Much of the development of aircraft technology was sponsored by federal military contracts.  There are also the choices of traveling on our interstate highway system or AMTRAK, both federally supported and initiated.  Railroads owe their existence to federal policy that provided right of way preferences and other support in exchange for being regulated common carriers).  And communicating with someone on the other coast would be a sluggish chore (Today we have mobile and land line telephone service available throughout the country supported by a regulatory system managed by the Federal Communications Commission and state agencies that has made orderly development possible and fair to consumers).

Commercial radio did not arrive until 1920, and 1916 phonographs would lacerate 2017 sensibilities, as would 1916’s silent movies. (Again the Federal Communications Commission has set the framework for over the air radio and TV broadcasts by controlling access to bandwidths, something a private market would make shambles of).  If in 1916 you wanted Thai curry, chicken vindaloo or Vietnamese pho, you could go to the phone hanging on your wall and ask the operator (direct dialing began in the 1920s) to connect you to restaurants serving those dishes. The fact that there were no such restaurants would not bother you because in 1916 you had never heard of those dishes, so you would not know what you were missing.  (Land grant colleges, state university research, city-county health departments and extension programs, etc. are all government programs that have enhanced the variety and safety of our food supply).

If in 1916 you suffered from depression, bipolar disorder, a sexually transmitted disease or innumerable other ailments treatable in 2017, you also would not know that you were missing antibiotics and the rest of modern pharmacology. And don’t even think about getting a 1916 toothache. You can afford state-of-the-art 1916 dentures — and probably will need them. Your arthritic hips and knees? Hobble along until you cannot hobble any more, then buy a wheelchair. Birth control in 1916 will be primitive, unreliable and not conducive to pleasure.  (The federal Centers for Disease Control and Prevention and the National Institute of Health, along with many state funded university medical and dental schools and hospitals, have been leaders in medical improvements and knowledge that made those improvements possible).

You could enjoy a smattering of early jazz, but rock-and-roll is decades distant, and Netflix and Google even more so. Your pastimes would be limited, but you could measure the passage of time on the finest Swiss watch. It, however, would be less accurate than today’s Timex or smartphone.  (Remember it was a federal research project, as Al Gore reminded us, that led to the development of the Internet).

As a 1916 billionaire, you would be materially worse off than a 2017 middle-class American; an unhealthy 1916 billionaire would be much worse off than an unhealthy 2017 American of any means. Intellectually, your 1916 range of cultural choices would be paltry compared with today’s. And your moral tranquility might be disturbed by the contrast between your billionaire’s life and that of the normal American.

Last year, a Bureau of Labor Statistics paper described the life of workers in 1915. More than half (52.4 percent) of the 100 million Americans were younger than 25, life expectancy at birth was 54.5 years (today, 78.8) and less than 5 percent of Americans were 65 or older. One in 10 babies died in the first year of life (today, 1 in 168). A large majority of births were not in hospitals (today, less than 1 percent).  (My comments above about the CDC, NIH and state universities, largely explain this also).

In 1915, only about 14 percent of people ages 14 to 17 were in high school, an estimated 18 percent age 25 and older had completed high school, and nearly 75 percent of women working in factories had left school before eighth grade. (State and local government support for universal public education is what made this possible.)  There were 4 renters for every homeowner, partly because mortgages (usually for just five to seven years) required down payments of 40 to 50 percent of the purchase price.  (This changed dramatically after the Federal Housing Administration was put in place as part of the New Deal and enhanced by the GI Bill benefits from the federal government for World War II veterans.)

Less than one-third of homes had electric lights. Small electric motors — the first Hoover vacuum cleaner appeared in 1915 — were not yet lightening housework. Iceboxes, which were the norm until after World War II, were all that 1915 had: General Motors’ Frigidaire debuted in 1918.  (Local and state utility regulators brought order to the expansion of electricity in urban areas; the Rural Electric Administration, another New Deal program, provided federal help to assure electricity was available throughout our country).

So, thank Boudreaux for making you think about this: How large would your net worth have to be to get you to swap the life you are living in “hellhole” America for what that money could buy in 1916?”

Lunch on me to the first to ID the photo location.


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