Yesterday’s post about the impact of individual wealth on happiness started me wondering about flush toilets, washing machines, and cars. As our nation became wealthier and produced more goods and services, how did that affect our happiness? To get some answers, I looked at Stanley Lebergott’s Pursuing Happiness: American Consumers in the Twentieth Century.
Talking about a typical housewife in 1900, Lebergott says that she needed approximately 7 hours each week to do the laundry. During one year, for one child, she washed more than 4,000 diapers. Lacking modern plumbing (15% of all families had flush toilets), she hauled 9,000 gallons of water into the house annually. To do a wash, this woman had to boil the water, use her scrub board, wring out the water, hang up the clothes, and carry out the dirty water. The Model T? Not yet.
Statistically, today’s economy can be described through trillions, billions, and millions: trillions of dollars of production, billions of dollars of government spending, millions of business firms. Compared with 1900, we are talking about longer lives, better health, and many more labor-saving devices. Is this more happiness? Lebergott says, “Yes!”
The Economic Lesson
The GDP is the money value of goods and services produced in one country during a specific time period. The four components of the GDP are consumption expenditures (consumer spending), gross investment (primarily business spending and residential housing), government purchases, and exports minus imports (usually a negative number). The consumer component is the largest segment of the U.S. GDP.