Comparonomics: Why Life is Better Than You Think and How to Make it Even Better

Copyright © 2022 Grant J Ryan

Grant J Ryan asserts his moral right to be identified as the author of this work.

All rights reserved. No part of this publication may be produced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or information storage and retrieval systems, without permission in writing from the copyright holder.

Published by Big Idea Publishing Company

Contact: www.bigideapublishingcompany.com

Website: www.comparonomics.com

A catalogue record for this book is available from the National Library of New Zealand.

ISBN 978-0-473-59466-4 (paperback)

ISBN 978-0-473-59467-1 (EPUB)

Credits: Cover design and emoji – jeroentenberge.com

Contents

What is the problem?

I. How are we doing?

1. Comparonomic graphs: how to represent change over time

How to show direction and size of change over time

Adding details of how things change

Comparonomic graph summary

2. How does your life compare to King Louis XVI’s?

Health/sanitation

Education/information

Travel

Food/beverage

Housing

Entertainment/recreation

Communication

Summary of how to live like a king

3. Why comparonomic graphs are important and useful

When is comparonomics useful and when is it not?

How to mathematise comparonomics

4. How does our life compare to 50 years ago?

Health

Education/information

Travel

Communication

Food/beverage

Housing

Entertainment/recreation

Summary of how the average person is getting on after 50 years

How conventional economics views the last 50 years

The middle billion is the 1% from a historical perspective

Chapter conclusions

5. Changes in social trends

Changes in social trends are subjective

Society in 18th-century France

Social trends over the last 50 years

Sexism

Intelligence

Economic inequality

Violence

Sexual freedom — homophobia

Racism

Social status

Perception of happiness

Summary of social changes over 50 years

Chapter conclusions

II. How do we think we are doing?

6. if things are so much better, why do we feel so bad?

7. Information-gathering biases

Media — we have evolved to seek bad news

Social media

Pervasive advertising

Negative information bias

Digital screen addiction

Summary of information biases

8. Thinking biases

We have time to think

Nostalgia bias — why the past feels so good

Headwinds/tailwinds asymmetry

Confirmation bias

Availability heuristic

Pessimism bias

Summary of thinking biases

9. Social expectation biases

Natural Level of Grumpiness (NLG)

Positivity is unpopular

Cultural expectations of happiness

Need for social status

Summary of social expectation biases

10. Economic model biases

Conventional economic models are wrong

Nagging need for progress

Summary of economic model biases

11. Economic inequality biases

Inequality — seems so unfair

People can’t participate due to inequality

Belief in meritocracy

Summary of economic inequality biases

12. Summary and discussion of feel-bad factors

List of all the feel-bad factors

Are there any feel-good factors that are relevant?

How do the feel-bad factors interact?

Conclusions about feel-bad factors

III. How can we do better?

13. Conventional goals to make life better

Economic growth

Social mobility

More equality

Chapter summary

14. Model mania — better models of how the world works

Experts tell us how to think about things — what if they are wrong?

Change how we think about stuff

Changing how we think about the feel-bad factors

15. The last great ‘ism’

Definition of statusism

Impact of solving statusism on feel-bad factors

Chapter conclusions

16. Statusism — changing how we think about social status

What is social status and how do you get it?

Is social status justified?

Games you can play

A word on the 1% of the 1%

Will society change? Can we solve statusism?

Language matters

No downsides to rejecting social status personally

Policy implications for comparonomics

Left right out

Conclusions about how to change statusism

17. Summary and conclusions

Summary of Part One

Summary of Part Two

Summary of Part Three

Final thoughts

Appendix 1: Alternative economic growth theory

Appendix 2: Other uses for comparonomic graphs

Notes

References

Acknowledgments

About the Author

What is the problem?

This book has been brewing for a long time. It started with a nagging sense of inadequacy from economic growth theory studied academically many years ago. It was followed by decades in the real world of technology, business, non-profits and even government (calling government real world is a stretch, I know). The odd thing is that all of us use goods and services that a billionaire couldn’t have used 10–15 years ago but there is a widespread belief that wages have been stagnant for years and we were better off in the past.

Before you run screaming at the thought of economic growth theory, consider that economic growth is probably the most universally agreed aim of governments in the history of humanity. It is hard to think of anything else most of the world’s leaders agree on. Many of us spend vast quantities of our life being a cog in the economic growth machine. Economic growth determines a lot of what you do every day. It also affects how you think about and interact with people around you. It’s worth a little time making sure you understand precisely what economic growth is all about.

This book has nothing to say about the best way to achieve growth. It is an investigation of what economic growth is, whether it measures things adequately, and how it affects our day-to-day behaviour. The explanations and tools in this book are maths free and easy for a layperson to follow. The results, however, are somewhat different from what you might expect. The insights discovered are different from what I expected at the start of this investigation. It changed what I wanted to do and how I think about others. Maybe it will for you too. It is worth considering:

How much does the pursuit of economic growth affect your day-to-day life?

How much do you know about what economic growth is?

The mantra of economic growth is so universally accepted across all societies and cultures that any improvement in understanding it has vast ramifications. Tim Harford, author of The Undercover Economist, eloquently explains the importance of economics:

… this remains a wonderful time to be thinking about economics. It’s true that it often seems to let us down, but that is the nature of the challenge: there are few systems that we can study that are as complex and multifaceted as the astonishing economy that has been the cause and consequence of human civilization.

A few observations in the last few years accelerated the development of this book. One was dropping off some rubbish at the local refuse centre and seeing the types of things people left. Many of the items, in full working order, were not on the market 10–15 years ago and if they were, then you had to be wealthy to afford them.

Another observation was seeing a picture of people camping out and queuing for the iPhone 3G in an old magazine. This was a device of intense desirability and pure excitement that five years later you couldn’t give away. It seems astonishing how quickly things go from wildly desirable for the rich only to completely free.

I was surprised when reading an old economics book from Joseph Schumpeter talking about how in the 1940s we lived like kings, and if we continued to grow at 2%, all problems would be solved. ¹ This is a similar set of thoughts to Keynes who envisioned a future life of leisure. ² We seem to have all sorts of things and services people in the past could only dream of, yet it appears we are not much happier with how life is progressing. If we believe the core messages in the media, we might think the world is full of doom and gloom.

The first question investigated is ‘Are we better off now than in the past?’ Rather than answering this by debating detailed historical data, we use a new tool that allows anyone to explain this for themselves. You can decide what is important to you and communicate these views explicitly. It is not about me telling you how things are but giving you a tool, so you can answer and understand for yourself.

Agreeing how things have changed is easier than the vastly harder questions of why things have changed or how they are likely to change in the future. Most books looking at economic trends focus on why things have changed or how they are likely to change in the future given different policies. I leave these harder questions to folks smarter than me and just seek clarification on how things have changed because understanding and agreeing on this is key to understanding how we are progressing.

The new tool developed makes it clear how much better off we are than the past but leads to the more puzzling question, ‘Why don’t we feel better?’ Getting to the nub of this question is essential if we are to work out what changes may be needed to make life feel more fulfilling.

I know the word ‘economics’ puts a lot of people off, but what is discussed here is economics in the broader sense of the word that is nicely summed up by Niall Kishtainy: ³

The word ‘economics’ might sound a bit dry, and make you think of a load of boring statistics. But all it’s really about is how to help people to survive and to be healthy and educated. It’s about how people get what they need to live full, happy lives — and why some people don’t. If we can solve basic economic questions, maybe we can help everyone to live better lives.

I wrote this book as more of an intellectual mystery where the conclusions are not apparent from the start. The two reasons for this are that it reflects the genuine surprise of what I have found writing this book. More importantly, the new tools can investigate all sorts of alternative problems. If I leave the options open as long as possible, then other creative, intelligent folks will be able to draw some different conclusions that have as much chance of being insightful and useful.

The usual way economics books designed for the general population evolve is that obscure academic papers become influential and are built upon if they are any good. The old orthodoxies start to become replaced by new theories. An author takes the time to simplify all the academic papers to something readable by the general population. My favourite examples of this are Thinking, Fast and Slow by Daniel Kahneman ⁴ and Nudge by Richard Thaler and Cass Sunstein. ⁵ Unfortunately, this process takes decades. I have purposely short-circuited this process for two reasons. The new theory is simple enough for anyone to understand and it shows some different, exciting and, I think, significant results. The main risk for you is that this new way of looking at things may be complete rubbish. This theory has not gone through the decade’s process of academic scrutiny. However, it only takes about 10 minutes to read the next chapter, and you will see a tool that is easy to understand and shows an alternative view of economic/social development. I’d back anyone to be able to read and get the gist of this new simple tool and make your mind up about how useful it is.

The book has three parts:

Part One: How are we doing? — a new tool allows you to understand how good life is compared to any time in the past.

Part Two: How do we think we are doing? — the way we think about things can be at odds with reality, and here I dig into a list of information, thinking and social biases that tend to make us think things are not as good as they actually are.

Part Three: How can we do better? — some common things we try to do to make life better are investigated to show why they may not help much. I also suggest a couple of novel alternative solutions that have some promise.

Method of analysis

This book is purposefully devoid of economic jargon as much as possible. For the examples in this book, you do not need to learn all sorts of terminology, theories, and data although a new infographic tool has been created to allow you to represent the results of your thought experiments.

As an example, to work out if life, and the economy, is getting better, I do not explain Total Factor Productivity or Consumer Price Indices and delve into years of data and trends. I ask what is important in your life and how does what we have now compare to any period in the past. You can make up your mind with a series of mini thought experiments to decide if things are getting better or worse. This style obviously has its pitfalls in that topics of vast size are dealt with in a paragraph or sentence. The jargon and detail of conventional economic analysis are considered by some to be so overwhelming that they are owned by ‘a priesthood of experts.’ ⁶ The tools developed here allow anyone to participate for themselves, or they can be used to enable more meaningful engagement with others.

The tools developed can be used for investigating not just economic but other social trends as well. As an example of the analysis style, there are only a couple of paragraphs on the evidence that society is vastly less violent than ever before in history. Luckily for us, bright folks have compiled immensely compelling evidence that documents this progress. ⁷ While some of the best examples of evidence are referenced, the inevitable nuanced arguments around each topic are not discussed. The preferred method of explanation is to offer a set of cases that are quite often in the extreme. This is typically more powerful and memorable than reams of data. I am purposefully leveraging something called the availability heuristic, ⁸ which is an academic term for the idea that we tend to remember recent stories more than anything else. For example, rather than list all the data and detailed ways that society is less sexist than in 1970, a few facts are given that seem quite astonishing. In Switzerland some women didn’t have the vote, in the US women could not get a credit card without their husband’s consent, and it was perfectly legal to rape your wife as much as you liked … gulp! While we have a long way to go with improving sexism, clearly, we have made progress since then.

I am also purposefully unbalanced with some of our examples. As discussed later there are a series of biases that make us feel pessimistic about progress, so I am countering this gloomy view already out there with in-your-face stories of why things are better (though not always). The analysis tool developed is not inherently optimistic, so you can make up your mind as you go through.

Most new economic theories are presented in great detail but typically in a tiny part of the overall picture. What is presented in this book is a broad sketch of a much larger view. A valid criticism of this work will include the fact that there is no depth in the analysis typical of ‘proper’ theories. The theories developed here are purposely a sketch, not a detailed painting, for three reasons. First is to keep it manageable size-wise. Second is that the broad outline is compelling and easy for a broad range of people to participate and comprehend. The last reason is that there are more talented painters out there that will do a better job of building out the academically rigorous details. Think of it as a division of labour to allow the painters to fill in the finer points from this sketch. Appendix 1 outlines how to mathematicise the theory along with some pointers to parts that could