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Would you rather:
A. Live in 1900 and make $70,000 a year.
B. Live today and make $70,000 a year.
If you choose A., you get to be super rich; your income is roughly equal to $700,000 today. You get a mansion, servants, the whole deal.
Choice B. means you aren't rich, but you're not poor — and you don't have to worry about being crippled by polio, or killed when a cut on your foot gets infected. You also get cable TV and air conditioning.
Vote now, and we'll announce the results next week on the podcast:
On today's Planet Money, we hear from Tim Taylor, an economist who starts out his econ classes with this question. He says about 2/3 of the students choose B.
There's no right answer here. But, Taylor says, there is an implicit lesson:
The force of economic growth over time has given middle class people in America today things that would have been regarded as miracles a century ago. And having access to those miracles is worth an enormous amount.
Today's podcast is the second installment in our Econ 101 series, where we bring you great moments from intro econ classes. For more, check out the first installment, where we answered the question: How do you keep sea captains from killing their passengers?
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