fbpx
01 / 05
Cruising Has Never Been More Abundant

Blog Post | Tourism & Leisure

Cruising Has Never Been More Abundant

Over the past 50 years, the time price of a Caribbean cruise has dropped over 70 percent. Blue-collar and unskilled workers now get 3.4 cruises for the time price of one in 1972.

Summary: In the last 50 years, the time price of a Caribbean cruise vacation has dropped significantly, making it accessible to blue-collar and unskilled workers. Ted Arison’s Carnival cruise line, starting in 1972, transformed cruising from an exclusive luxury to an affordable vacation for many. Today’s cruises offer vastly improved experiences and illustrate how entrepreneurial vision can make luxuries accessible to all.


Entrepreneur Ted Arison launched his first ship, the Mardi Gras, on March 11, 1972. At the time, cruising was considered an expensive luxury for older rich people. Over the past five decades, Arison’s Carnival cruise line made this high-end experience affordable for everybody, including plumbers, schoolteachers, and college students. The Mardi Gras sailed for 20 years and created the market we enjoy today. It even gave life to a popular TV show, The Love Boat, which aired from 1976 to 1990. Carnival cruise line managed to grow from a one-ship line to the largest cruise company in the world. The first Mardi Gras cost $5 million and accommodated 1,248 passengers on 10 decks.

1972 Mardi Gras

You could book a seven-day cruise from Miami to the Caribbean for $240 to $595. Blue-collar workers at the time were earning around $4.59 an hour in wages and benefits. At $240, a cruise would cost them 52.3 hours. Unskilled workers were earning closer to $2.14 an hour, making their time price around 112.2 hours.

In 2021, Carnival launched its new Mardi Gras. This $950 million ship accommodates 6,500 passengers and approximately 2,000 crew members. It hosts “Bolt” the world’s first shipboard roller coaster, along with a water park and a sports center and is powered with liquified natural gas. The quality of the experience has vastly improved in 50 years with better food choices, entertainment, comfort, and safety. The new Mardi Gras weighs 180,000 tons, around 6.6 times more than the 27,284-ton original. This larger size dramatically reduces sea sickness.

2024 Mardi Gras

Today you can book a seven-day cruise from Carnival’s new $163 million, 188,000-square-foot terminal at Port Canaveral, Florida, to the Caribbean for $549. Blue-collar workers are now earning around $36.15 an hour in wages and benefits, putting their time price at 15.2 hours. Unskilled workers are earning closer to $16.51 an hour today, making their time price around 33.3 hours.

For these workers, the time price has dropped more than 70 percent. For the time it took them to earn the money to buy 1 cruise in 1972, they get 3.4 today. Cruise abundance has increased 240 percent. If you “upskilled” from an unskilled worker in 1972 to a blue-collar worker by 2022, your cruise abundance increased by a factor of 7.38, or 638 percent. Everybody floats first class now.

The larger the market, the more affordable things become for everyone. Adam Smith wrote about this in 1776. From 1972 to today, US population increased 131 percent from 208 million to around 340 million. Every 1 percent increase in population corresponded to a 1.83 percent to 4.87 percent increase in personal cruise abundance.

It’s visionary entrepreneurs like Ted Arison that take on enormous risks and create whole new markets and then get fabulously rich by making luxuries affordable for everyone.

This article was published at Gale Winds on June 28, 2024.

Buenos Aires Times | Macroeconomic Environment

Inflation in Buenos Aires City Slows to Monthly 1.6 Percent

“Consumer prices in Buenos Aires City rose 1.6 percent in May, lower than the expectations of most analysts and a slowdown from the previous month.

The news will be welcomed by President Javier Milei’s national government, which is awaiting the publishing of the INDEC national statistics bureau’s national figure later this week.

According to data from the Buenos Aires City Statistics Office, prices in the capital were up 1.6 percent, down from the 2.3 percent recorded in April. Most private consultancy firms expected a rate of around two percent.

Inflation so far this year in the capital totals 12.9 percent – a massive drop on the 48.3 percent recorded over the same period in 2024.”

From Buenos Aires Times.

Curiosities | Trade

The Real Story of the “China Shock”

“The total number of jobs remained largely stable in the U.S.—and even slightly increased—as people adapted to competition from Chinese trade. Trade-exposed places recovered after 2010, primarily by adding young-adult workers, foreign-born immigrants, women and the college-educated to service-sector jobs.

Lost in the alarm over jobs is that trade with China delivered substantial benefits to the U.S. economy. Most obvious are the lower prices Americans pay for everything from clothing and electronics to furniture. One study found that a 1 percentage point increase in imports from China led to about a 1.9% drop in consumer prices in the U.S. For every factory job lost to Chinese competition, American consumers in aggregate gained an estimated $411,000 in consumer welfare. This so-called Walmart effect disproportionately helped middle- and lower-income families, who spend a bigger share of their budget on the kinds of cheap goods China excels at producing.

U.S. businesses also reaped advantages. Manufacturers who use imported parts or materials benefited from cheaper inputs, making them more competitive globally. An American appliance company, for example, could buy low-cost Chinese components to lower its production costs, keep its product prices down and potentially hire more workers.”

From Wall Street Journal.

Curiosities | Cost of Services

Service Costs Aren’t Exploding Anymore

“The trend of increasing service costs defined many of our economic debates for a decade. There was just one small problem — by the time we started talking about how to address this trend, the trend had changed…

Until around 1990, health spending rapidly ate up a bigger and bigger portion of our national income. Then the increase slowed down, but it did go up some more until around 2009. But after that, it leveled off; in 2024, Americans didn’t spend a greater percent of their income on health care than they did in 2009…

Higher education has been getting more affordable for years, and the decrease in affordability in the late 2000s and 2010s was significantly overstated. The popular narrative that college is getting less and less affordable is wrong…

These changing trends don’t mean that services are cheap and we can stop thinking about service costs. First of all, there are still some services that are getting less affordable over time — most notably, child care. Second, the recent mild increases in affordability for health care and higher education haven’t erased the big cost increases that happened in the 1980s, 1990s, and early 2000s; Americans still pay a lot more for these things than Europeans or Asians do, relative to their incomes. So there’s still probably scope to bring down the costs of health care and college.

But with all that said, the change in the trends in service costs and service productivity mean that our debates about these topics need to change.”

From Noahpinion.

Blog Post | Cost of Material Goods

From Silk Stockings to Synthetic Diamonds

Capitalist innovation makes luxury commonplace.

Summary: The economist Joseph Schumpeter explained capitalism’s power to transform luxuries for the elite into affordable goods for the masses. From silk stockings once reserved for queens to synthetic diamonds now within reach of everyday consumers, capitalist innovation drives this democratization of consumption.


In his 1942 book Capitalism, Socialism and Democracy, the Austrian economist Joseph Schumpeter explained one of the most important characteristics of free market economies. He wrote:

It is the cheap cloth, the cheap cotton and rayon fabric, boots, motorcars and so on that are the typical achievements of capitalist production, and not as a rule improvements that would mean much to the rich man. Queen Elizabeth owned silk stockings. The capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within the reach of factory girls.

Schumpeter’s anecdote about Queen Elizabeth and silk stockings illustrates capitalism’s remarkable ability to democratize consumption.

Initially, silk stockings symbolized privilege reserved only for royalty and elites. Yet capitalism’s true achievement, Schumpeter argued, is not merely supplying luxury to the rich but making such goods affordable for ordinary people. Entrepreneurial innovation, mass production, competition, and technological advances – driven by profit incentives – bring previously unattainable products within everyone’s reach.

This phenomenon elevates the living standards of the less fortunate by breaking down class barriers and spreading prosperity more broadly. Capitalism’s transformative force, according to Schumpeter, lies in continually converting luxuries into everyday essentials, thereby enhancing human well-being across social strata.

The diamond industry today exemplifies Schumpeter’s insight perfectly. Historically, diamonds represented wealth and exclusivity, accessible primarily to the affluent. However, technological advancements, particularly synthetic diamond production via High Pressure High Temperature (HPHT) methods and Chemical Vapor Deposition (CVD) technology, have dramatically changed this dynamic.

Chemical Vapor Deposition (CVD), for example, is a technique for creating synthetic diamonds by depositing carbon atoms from a carbon-rich gas onto a substrate. In this method, a diamond seed crystal is placed in a vacuum chamber filled with gases such as methane and hydrogen. When heated to very high temperatures, these gases break down, and carbon atoms accumulate layer-by-layer on the seed crystal, slowly forming a diamond. This process enables precise control over diamond purity, size, and quality, making it highly efficient and cost-effective compared to traditional diamond mining methods.

Not only have synthetic diamonds become more widely affordable, but they have also placed a downward pressure on natural diamond prices. As a recent article in The Guardian explained:

Natural diamonds cost 26% less in shops than two years ago, a drop during a time of high inflation that would be extraordinary were it not dwarfed by the poor fortune of their identical twins, lab-grown diamonds, which are now 74% cheaper than in 2020.

Furthermore, synthetic diamonds may appeal to modern consumers by offering ethical and environmental advantages over mined diamonds. Instead of sourcing diamonds from some of the world’s bloodiest conflict zones marked by human rights abuses and environments destroyed by primitive forms of mining, today’s diamonds increasingly come from the lab.

Much like silk stockings transitioned from royal exclusivity to widespread accessibility, diamonds today are undergoing a similar evolution. Synthetic diamonds eliminate historical barriers of price, scarcity, and exclusivity, transforming diamonds from symbols of privilege into everyday commodities.