The Good Life vs. reality

Recently, a former classmate badgered me into accompanying her on a run to the supermarket. As we were checking out, I, as a person who is very dedicated to the principle of self-interest, used a handful of coupons and a discount card to lower my final tally. My companion had a judgmental reaction to the proceedings: she gave me to understand that she never sought discounts or used coupons because to do so was beneath her station. Oddly, she could see no connection between her attitude and her continuous complaints about being short on funds. It was only much later that I connected her attitude at the cash register with her frequent monologues about a “broken society,” a slight fixation on “inequality,” and an overweening sense of entitlement.  

In 1971, NBC produced a sitcom called The Good Life, not to be confused with the British series of the same name. The American series was unsuccessful, in comparison to its competition, and it was canceled after fifteen episodes. I have never seen the show as NBC has never rerun it or provided a home release of it. I first heard of The Good Life in a book, whose title I have regrettably forgotten (for a long time I thought the book was Greg Easterbrook’s The Progress Paradox but now I can’t find any allusion to the tv show in Easterbrook’s book.). The author of the forgotten book alluded to The Good Life as a watershed moment in tv history with its portrayal of the so-called super-rich – the one bit I remember was that the book described the show as “the most luxurious show [in terms of portrayal of lifestyle]” and connected the show to a sudden increase in a broad sense of entitled victimhood throughout society. The Good Life  was also, apparently, part of creating the environment conducive for the success of the soap opera Dallas (1978 – 1991).

The plot behind The Good Life is that a middle-class couple become exhausted with the pressures of suburban life and maintaining a lifestyle that’s beyond their means. Consequently, the pair decide to scam their way into the household of an industrialist multimillionaire by disguising themselves as a butler and housekeeper. The theme which (apparently) underlay the show was the idea that there is a class of people who live extravagant, exotic lives (the proverbial good life) and therefore can afford to support some sponging malcontents.

When researching the show, one thing that struck me about it was how prescient it was in terms of foretelling some of the themes which are present in our current socio-political discourse. The two con-artists are reasonably successful college graduates who believe that society promised them the good life as a reward for going to college and having careers; however, when the pair see the lifestyle shown in glossy magazines – mansions, tennis courts, Rolls-Royce cars – the couple feels that society has reneged on its promise. The logic of the show’s premise is that the couple has been pushed by society – that wicked, amorphous “they” – toward a life of deception because there is no other path to riches open to them.

LitHub ran an article titled “How the well-educated and downwardly mobile found socialism.” The article isn’t worth reading, but the title touches on what began as the fictional premise of The Good Life and has become a full blown, ideologically fraught, issue today. What happens when perception of status is overblown and there is no sense of timeframe to temper expectations? 

Thinking of the popularity of AOC or Andrew Yang and the manner in which they have successfully tapped into the tropes of “unjust society” of “inequality,” the modern millennial (my own generation) seems to have embraced the premise of The Good Life. The tv show contained a very subtle, and completely subversive, inversion of the moral order: because “society’s promises” were broken, the dishonesty of the protagonists was not immoral. The extension of such reasoning is that the industrialist was obligated to support the swindlers anyway due to his greater wealth.

Capx just ran a terrific article by Jethro Elsden, “Jane Austen, the accidental economist,” in response to the new film version of Emma. One of the interesting tidbits the author found was that in modern terms, Mr Darcy’s £10,000 per annum income is probably equivalent to £60 million today, which would make his wealth around £3 billion. Even then Elizabeth Darcy had to “make small economies” once she decided to support her sponging sister and feckless brother-in-law. Granted the economies might have been the result of not telling her husband, but still the point remains that no one can long support spongers.

Elsden alluded to the logic of social pressure and the malignant effect it had on Austen’s characters who feel compelled to engage in an “arms race.” A major reason the swindlers of The Good Life turn to dishonesty is that they feel pressured to look like successful suburban college graduates. The problem was that  in the case of Austen’s characters and the tv show from 154 years later, the definition of “success” in relation to appearances was fungible. Rationally, it is ridiculous for the youngish couple of The Good Life to be in same place financially and socially as their mark, the middle-aged, widower industrialist whose lifestyle (but not work ethic) they covet.

To return, finally, to the anecdote regarding my shopping expedition, the episode is an example of a type of path that begins with frivolous preconceptions and ends with The Good Life on the comic end and the rise of Andrew Yang, Bernie Sanders, or Elizabeth Warren on the other. These politicians have located a demographic which has no sense of progression of time, stages of development, or realistic expectations. A perfect example is my ex-classmate, who has subjected herself to a fantasy regarding her own realistic expectation and now believes that the social contract has been broken.  For such a demographic, the emotional trumps the rational. It is easier to believe themselves wronged than as merely victims of their own imaginations.

2019: Year in Review

It’s been a heck of a year. Thanks for plugging along with Notes On Liberty. Like the world around me, NOL keeps getting better and better. Traffic in 2019 came from all over the place, but the usual suspects didn’t disappoint: the United States, United Kingdom, Canada, India, and Australia (in that order) supplied the most readers, again.

As far as most popular posts, I’ll list the top 10 below, but such a list doesn’t do justice to NOL and the Notewriters’ contribution to the Great Conversation, nor will the list reflect the fact that some of NOL‘s classic pieces from years ago were also popular again.

Nick’s “One weird old tax could slash wealth inequality (NIMBYs, don’t click!)” was in the top ten for most of this year, and his posts on John Rawls, The Joker film, Dominic Cummings, and the UK’s pornographer & puritan coalition are all worth reading again (and again). The Financial Times, RealClearPolicy, 3 Quarks Daily, and RealClearWorld all featured Nick’s stuff throughout 2019.

Joakim had a banner year at NOL, and four of his posts made the top 10. He got love from the left, right, and everything in between this year. “Elite Anxiety: Paul Collier’s ‘Future of Capitalism’” (#9), “In Defense of Not Having a Clue” (#8), and “You’re Not Worth My Time” (#7) all caused havoc on the internet and in coffee shops around the world. Joakim’s piece on Mr Darcy from Pride and Prejudice (#2) broke – no shattered – NOL‘s records. Aside from shattering NOL‘s records, Joakim also had excellent stuff on financial history, Richard Davies, and Nassim Taleb. He is also beginning to bud as a cultural commentator, too, as you can probably tell from his sporadic notes on opinions. Joakim wants a more rational, more internationalist, and more skeptical world to live in. He’s doing everything he can to make that happen. And don’t forget this one: “Economists, Economic History, and Theory.”

Tridivesh had an excellent third year at NOL. His most popular piece was “Italy and the Belt and Road Initiative,” and most of his other notes have been featured on RealClearWorld‘s front page. Tridivesh has also been working with me behind the scenes to unveil a new feature at NOL in 2020, and I couldn’t be more humbled about working with him.

Bill had a slower year here at NOL, as he’s been working in the real world, but he still managed to put out some bangers. “Epistemological anarchism to anarchism” kicked off a Feyerabendian buzz at NOL, and he put together well-argued pieces on psychedelics, abortion, and the alt-right. His short 2017 note on left-libertarianism has quietly become a NOL classic.

Mary had a phenomenal year at NOL, which was capped off with some love from RealClearPolicy for her “Contempt for Capitalism” piece. She kicked off the year with a sharp piece on semiotics in national dialogue, before then producing a four-part essay on bourgeois culture. Mary also savaged privileged hypocrisy and took a cultural tour through the early 20th century. Oh, and she did all this while doing doctoral work at Oxford. I can’t wait to see what she comes up with in 2020.

Aris’ debut year at NOL was phenomenal. Reread “Rawls, Antigone and the tragic irony of norms” and you’ll know what I’m talking about. I am looking forward to Dr Trantidis’ first full year at NOL in 2020.

Rick continues to be my favorite blogger. His pieces on pollution taxes (here and here) stirred up the libertarian faithful, and he is at his Niskanenian best on bullshit jobs and property rights. His notes on Paul Feyerabend, which I hope he’ll continue throughout 2020, were the centerpiece of NOL‘s spontaneity this year.

Vincent only had two posts at NOL in 2019, but boy were they good: “Interwar US inequality data are deeply flawed” and “Not all GDP measurement errors are greater than zero!” Dr Geloso focused most of his time on publishing academic work.

Alexander instituted the “Sunday Poetry” series at NOL this year and I couldn’t be happier about it. I look forward to reading NOL every day, but especially on Sundays now thanks to his new series. Alex also put out the popular essay “Libertarianism and Neoliberalism – A difference that matters?” (#10), which I suspect will one day grow to be a classic. That wasn’t all. Alex was the author of a number of my personal faves at NOL this year, including pieces about the Austro-Hungarian Empire, constructivism in international relations (part 1 and part 2), and some of the more difficult challenges facing diplomacy today.

Edwin ground out a number of posts in 2019 and, true to character, they challenged orthodoxy and widely-held (by libertarians) opinions. He said “no” to military intervention in Venezuela, though not for the reasons you may think, and that free immigration cannot be classified as a right under classical liberalism. He also poured cold water on Hong Kong’s protests and recommended some good reads on various topics (namely, Robert Nozick and The Troubles). Edwin has several essays on liberalism at NOL that are now bona fide classics.

Federico produced a number of longform essays this year, including “Institutions, Machines, and Complex Orders” and “Three Lessons on Institutions and Incentives” (the latter went on to be featured in the Financial Times and led to at least one formal talk on the subject in Buenos Aires). He also contributed to NOL‘s longstanding position as a bulwark against libertarian dogma with “There is no such thing as a sunk cost fallacy.”

Jacques had a number of hits this year, including “Poverty Under Democratic Socialism” and “Mass shootings in perspective.” His notes on the problems with higher education, aka the university system, also garnered plenty of eyeballs.

Michelangelo, Lode, Zak, and Shree were all working on their PhDs this year, so we didn’t hear from them much, if at all. Hopefully, 2020 will give them a bit more freedom to expand their thoughts. Lucas was not able to contribute anything this year either, but I am confident that 2020 will be the year he reenters the public fray.

Mark spent the year promoting his new book (co-authored by Noel Johnson) Persecution & Toleration. Out of this work arose one of the more popular posts at NOL earlier in the year: “The Institutional Foundations of Antisemitism.” Hopefully Mark will have a little less on his plate in 2020, so he can hang out at NOL more often.

Derrill’s “Romance Econometrics” generated buzz in the left-wing econ blogosphere, and his “Watson my mind today” series began to take flight in 2019. Dr Watson is a true teacher, and I am hoping 2020 is the year he can start dedicating more time to the NOL project, first with his “Watson my mind today” series and second with more insights into thinking like an economist.

Kevin’s “Hyperinflation and trust in ancient Rome” (#6) took the internet by storm, and his 2017 posts on paradoxical geniuses and the deleted slavery clause in the US constitution both received renewed and much deserved interest. But it was his “The Myth of the Nazi War Machine” (#1) that catapulted NOL into its best year yet. I have no idea what Kevin will write about in 2020, but I do know that it’ll be great stuff.

Bruno, one of NOL’s most consistent bloggers and one of its two representatives from Brazil, did not disappoint. His “Liberalism in International Relations” did exceptionally well, as did his post on the differences between conservatives, liberals, and libertarians. Bruno also pitched in on Brazilian politics and Christianity as a global and political phenomenon. His postmodernism posts from years past continue to do well.

Andrei, after several years of gentle prodding, finally got on the board at NOL and his thoughts on Foucault and his libertarian temptation late in life (#5) did much better than predicted. I am hoping to get him more involved in 2020. You can do your part by engaging him in the ‘comments’ threads.

Chhay Lin kept us all abreast of the situation in Hong Kong this year. Ash honed in on housing economics, Barry chimed in on EU elections, and Adrián teased us all in January with his “Selective Moral Argumentation.” Hopefully these four can find a way to fire on all cylinders at NOL in 2020, because they have a lot of cool stuff on their minds (including, but not limited to, bitcoin, language, elections in dictatorships, literature, and YIMBYism).

Ethan crushed it this year, with most of his posts ending up on the front page of RealClearPolicy. More importantly, though, was his commitment to the Tocquevillian idea that lawyers are responsible for education in democratic societies. For that, I am grateful, and I hope he can continue the pace he set during the first half of the year. His most popular piece, by the way, was “Spaghetti Monsters and Free Exercise.” Read it again!

I had a good year here, too. My pieces on federation (#3) and American literature (#4) did waaaaaay better than expected, and my nightcaps continue to pick up readers and push the conversation. I launched the “Be Our Guest” feature here at NOL, too, and it has been a mild success.

Thank you, readers, for a great 2019 and I hope you stick around for what’s in store during 2020. It might be good, it might be bad, and it might be ugly, but isn’t that what spontaneous thoughts on a humble creed are all about? Keep leaving comments, too. The conversation can’t move (forward or backward) without your voice.

Nightcap

  1. From Lahore to Lancashire: Untold stories from imperial Britain John Keay, Literary Review
  2. The younger sons in Jane Austen’s England had to work Richard Francis, Spectator
  3. How soon we forget Scott Sumner, EconLog
  4. Gin, sex, malaria, and American anthropology Charles King, Chronicle Review

On Translating Earnings From The Past

A few days ago, John Avery Jones published a great piece on the Bank of England blog (“Bank Underground”), investigating how much Jane Austen earned from her novels in the early 1800s. By using the Bank’s own archives and tracking down Austen’s purchases of “Navy Fives” (Bank of England annuities, earning 5%), Avery Jones backed out that Austen’s lifetime earnings as a writer was probably something like £631 – assuming, of course, that the funds for this investment came straight from the profits of her novels.

Being a great fan of using literature to illustrate and investigate financial markets of the past, I obviously jumped on this. I also recently looked at the American novelist Edith Wharton’s financial affairs and got very frustrated with the way commentators, museums, and scholars try to express incomes of the past in “today’s terms”, ostensibly vivifying their meaning.

For the Austen case, both Avery Jones and the Financial Times article that followed it, felt the need to “translate” those earnings via a price index, describing them as “equivalent to just over £45,000 at today’s prices”.

Hang on a minute. Only “£45,000”? For the lifetime earnings of one of the most cherished writers in the English language? That sounds bizarrely small. That figure wouldn’t even pay for the bathroom in most London apartments – and barely get you a town-house in Newcastle. The FT specifically makes a comparison with contemporary fiction writers:

“[Austen’s] finances compare badly even with those of impoverished novelists today: research last year by the Authors’ Licensing and Collecting Society found that writers whose main earnings came from adult fiction earned around £37,000 a year on average”

Running £631 through MeasuringWorth’s calculator yields real-price estimates of £45,910 (using 1815 as a starting year) – pretty close. But what I think Avery Jones did was adjusting £631 with the Bank’s CPI index in Millenium of Macroeconomic Data dataset (A.47:D), which returns a modern-day price of £45,047 – but that series ends in 2016 and so should ideally be another 7% or so from 2016 until May 2019.

 “This may not be the best answer”

Where did Avery Jones go wrong in his translation? After all, updating prices through standard price indices (CPI/RPI/PCE etc) is standard practice in economics. Here’s where:

untitled-1

The third line on MeasuringWorth’s result page literally tells researchers that the pure price number may not reflect the question one is asking. The preface to the main site includes a nuanced discussion about prices in the past:

“There is no single ‘correct’ measure, and economic historians use one or more different indices depending on the context of the question.”

When I first estimated Mr. Darcy’s income, this was precisely the problem I grappled with; simply translating wealth or incomes from the past to the present using a price index severely understates the meaning we’re trying to convey – i.e., how unfathomably rich this guy was. There is no doubt that Mr. Darcy was among the richest people in England at the time (his annual income some 400 times a normal worker’s salary), a well-respected and wealthy man of elevated rank. However, translating his wealth using a price index doesn’t even put him on the Times’ Rich List over the thousand wealthiest Britons today. Clearly, that won’t do.

Because we are much richer today in real terms, price indices alone do not capture the meaning we’re trying to communicate here. Higher real income – by definition – is a growth in incomes above the rise in prices. We therefore ought to use a more tangible comparison, for instance with contemporary prices of food or mansions or trips abroad; or else, using real income adjustments, such as GDP/capita or average earnings.

MeasuringWorth provides us with three other metrics over and above the misleading price-index adjustment:

Labour Earnings = £487,000
using growth in wages for the average worker, it reports how large your wage would have to be today to afford what Austen could afford on £631 in 1815. Obviously, quality adjustments and technological improvements make these comparisons somewhat silly (how many smartphones, air fares and microwaves could Austen buy?), but the figure at least takes real earnings into account.

Relative Income = £591,300
Like ‘Labour Earnings’, this adjustment builds on the insight above, but uses growth in real GDP/capita rather than wages. It more closely captures the “relative ‘prestige value’” that we’re getting at.

Both these attempt are what I tried to do for Mr. Darcy (Attempt #2 and #3) a few years ago.

Relative Output = £2,767,000
This one is more exciting because it captures the relationship to the overall economy. If I understand MeasuringWorth’s explanation correctly, this is the number that equates the share of British GDP today with what Austen’s wealth – £631 – would have represented in 1815.

Another metric I have been experimenting with is reporting the wealth number that would put somebody in the same position in the wealth distribution of our time. For example, it takes about £2,5m to qualify for the top-1% of British wealth (~$10m in the United States) distribution today. What amount of wealth did somebody need to join the top 1% in, say, 1815? If we could find out where Austen’s wealth of £631 (provided her annuities were her only assets) rank in the distribution of 1815, we can back out a modern-day equivalent. This measure avoids many of the technical problems above for how to properly adjust for a growing economy, and how to capture inventions in a price index – and it gets to what we’re really trying to convey: how wealthy was Austen in her time?

Alas, we really don’t have those numbers. We have to dive deep into the wealth inequality rabbit hole to even get estimates (through imputed earnings, capital stocks or probate records) – and even then the assumptions we need to make are as tricky and inexact as the ones we employ for wage series or prices above.

The bottom line is pretty boring: we don’t have a panacea. There is no “single correct measure”, and the right figure depends on the question you’re asking. A reasonable approach is to provide ranges, such as MeasuringWorth does.

But it’s hard to imagine the Financial Times writing “equivalent of between £45,000 and £2,767,000 at today’s prices”…

Liberty and the Novel I (Before Austen)

I’ve been working on Jane Austen and ethics recently. These ethical investigations have overlapped with considerations of politics and liberty, with regard to the progress of such ideas in the early nineteenth century when Austen was writing, along with the immediately preceding and following periods.

There is a well known Marxist view of the history of literature, which is that the novel (and other literary genres, but mostly the novel) can be seen as developing along with the development of the bourgeoisie, so that is progressive and emancipatory until the turning point year of 1848 when the bourgeois class at least in part turns against the progressive-democratic, working class, and national revolutions of the European Springtime of the Nations.

At this point the capitalist class flees from democracy, allying with the royalist and aristocratic forces to prevent a revolution that might overturn property relations as well as pre-democratic political forms. After 1848, the novel largely becomes inward looking and alienated from social reality, because of the ties of writers and readers to a bourgeois class trying to hold back socialist working class politics, or at least fears to ally with it.

The classic exponent of this view is the Hungarian philosopher Georg Lukács who was born into the Habsburg Empire and so wrote in German, very much continuing themes from German language philosophy, literary studies, and social science. The relevant texts include The Historical Novel and Studies in European Realism.

I do not write to advocate Lukács’ literary history and of course even less do I advocate his Leninist politics. However, he undoubtedly makes an important contribution. Not many people now, Marxist or otherwise, would advocate the more schematic elements of his literary history. Nevertheless he was continuing ideas he had before his turn to Marxism, as expressed in Theory of the Novel and Soul and Form and he was onto something with regard to the heroic and less heroic phases of literature.

The novel itself has non-heroic and even anti-heroic aspects. If we take Miguel de CervantesDon Quixote (1605 and 1615) as the starting point of the modern novel, a debatable proposition but not outrageously so, then the novel is something that starts with the mockery of the heroes of medieval knightly romance through a character trying to imitate them in real life Castile. It is a crude piece of social history to say this, but nevertheless it is roughly true that Don Quixote coincides with the growth of commercial Europe, trading across the Mediterranean and the Atlantic, as there is a growth of cities along with the increase in membership of the merchant and financial classes.

This is the sweet commerce rightly advocated by Charles-Louis de Secondat, Baron Montesquieu, but also the violent consolidation of European states and the growth of their overseas empires. This is not all pleasant, but then that makes it to some degree ‘heroic’, as heroism refers to struggle and triumph with limited regard for other concerns. The ‘heroism’ of Quixote is to observe the Spain of his time in his bizarre adventures, learning from experience and awakening from his illusions, if only on the point of death. He becomes disillusioned by experience so achieving a more inner awareness freed from the illusions of romances in an idea of authenticity which has its own romance. A romance that is very visible in the subsequent development of the novel.

Other inputs into the development of the novel include John Bunyan’s The Pilgrim’s Progress (1678), a religious story from England of salvation in an allegory focused on a hero called Christian. There was nothing new about texts of salvation, but this is a novel length narrative devoted to individual struggles with externalised representations of distractions from faith. It was read very widely in the English speaking Protestant world, turning theological concerns into a popular heroic narrative of release of the self from ungodly illusions, and references to it abound in later literature of a kind less guided by strict Reformation Protestantism. (to be continued)

Also posted at Stockerblog