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The Cost of Air-Conditioning Fell by 97 Percent Since 1952

Blog Post | Adoption of Technology

The Cost of Air-Conditioning Fell by 97 Percent Since 1952

How much are you paying to stay cool? The cost of air-conditioning may surprise you.

Last week, heatwaves resulted in record-breaking temperatures across Europe. The United Kingdom, France, Belgium, Germany, Luxembourg and the Netherlands, all experienced their highest temperatures since records began. Across the pond, the weather wasn’t much better, with more than two-thirds of the United States being gripped by what the Washington Post described as a “potentially deadly heatwave.”

With all that sweltering weather, it is worthwhile to take a moment and think about air conditioning – the simple invention that provides us respite from the summer heat, enables humans to inhabit previously inhospitable places, increases our work productivity and has saved millions of people from suffering heat-related deaths. It is used by hundreds of millions of people around the world and, thankfully, it is also becoming ever more affordable.

Air-conditioning was first invented 117 years ago in 1902 by Willis Carrier in Brooklyn, New York. Carrier invented the unit for a local publishing business, which was having problems caused by the hot and humid conditions in their factory. Sweltering Brooklyn summers meant that the printing paper in the publisher’s factory would often soak up the moisture from the air, which in turn caused the paper to expand and change shape. That ruined the alignment of colors on the printed page – causing financial losses.

Although air-conditioning was originally used for industrial purposes, during the post war economic boom of the 1950s it surged in popularity and its use expanded to offices, hotels, stores, movie theaters and private homes. One of the most impressive things about the invention of air-conditioning is how quickly it went from a luxury good reserved for only the richest in society, to becoming affordable to the masses.

Consider the following. According to Measuringworth.com, in 1952 an average production (i.e., blue-collar) worker’s hourly wage was $1.72. Back then, as Michael Cox and Richard Alm found in their 1997 report Time Well Spent: The Declining Real Cost of Living in America, the average cost of 5,500 BTU air-conditioning unit was $350. That meant that a blue-collar worker had to work 203 hours to earn enough money to buy an air-conditioning unit in 1952.

Today, Walmart sells a far more efficient 6,000 BTU air-conditioning unit (with a remote control) for only $178. With the current hourly salary of a blue-collar worker standing at $32, it now takes just 5.56 hours of labor to buy such an air-conditioning unit. That means that the time price (the number of working hours needed to earn enough money to buy a product) of air-conditioning has fallen by more than 97 percent since 1952.

Put differently, for the same amount of labor that it took to buy one air-conditioning unit in 1952, you can buy more than 36 units today.

Had the entire population of the United States (158 million) bought an air-conditioning unit in 1952, it would have required 32.1 billion hours of total work time. Even though the population of the United States increased by 109 percent to 330 million people, today it would take just 1.8 billion hours of work for every single American to be able to afford an air -conditioning unit. That means that even as the population grew, the affordability of air-conditioning drastically increased.

We call the phenomenon of the time price declining proportionally faster than the population increases “superabundance.” To learn more about “superabundance,” check out  HumanProgress.org’s new Simon Project website. The Simon Project counterintuitively shows that as the population increases, the time price of goods and resources decreases. Rather than causing scarcity, additional people make goods and resources more abundant.

The declining cost of air-conditioning is a common trend across nearly all household appliances, from toasters to televisions, from dishwashers to microwaves, from grills to blenders. As we wait for the cooler weather to return, we should be thankful that a machine that has saved and improved millions of lives around the world is continuing to become ever more affordable and abundant.

Blog Post | Cost of Technology

MacBooks Galore! Laptop Abundance since 1991

Since 1991, laptop abundance has increased by a factor of six up to a factor of infinity.

In 1991, Apple introduced the PowerBook 100 priced at $2,500. Blue-collar hourly compensation at the time was $14.93, so the time price was around 168 hours. Today you can pick up a 13.3-inch MacBook Air for $999. With blue-collar hourly compensation around $36.50 today, the time price is just over 27 hours. You can get six MacBook Airs today for the time price of one PowerBook 100 in 1991.

The PowerBook 100 weighed 5.1 pounds and featured a 640×480 monochrome LED screen, 2 megabytes of memory, and 20 megabytes of storage. The battery was good for three hours. The MacBook Air has 13.3 times more pixels (in millions of colors), 4,000 times more memory, and 12,800 times more storage than the PowerBook 100. It weighs 45 percent less, and the battery lasts six times longer. The MacBook Air has Wi-Fi, a 720-pixel camera, and stereo speakers and comes with 32 apps ranging from music programs to spreadsheets.

While it’s hard to make a direct comparison, a simple way to do an analysis is to ask MacBook Air users how many PowerBook 100s they would need to give up their one Air. Most users now think the PowerBook 100 has negative value due to the disposal costs. That would make the MacBook Air infinitely more valuable.

This article was published at Gale Winds on 11/7/2023.

Blog Post | Cost of Technology

Atari to Xbox

Get two Xbox Series X consoles for the time price of one Atari 2600.

The Atari 2600 was introduced in 1977 and was priced at $199. Unskilled wages at the time were $3.15 an hour, so the time price was around 63 hours. Today you can pick up an Xbox Series X for $499. With unskilled wages today being around $16.50 an hour, the time price is just over 30 hours. You can buy two Xbox Series X consoles today for the time price of one Atari 2600 in 1977.

Atari 2600 home video console system next to an Xbox series X

The Atari had a chip running at 1.19 megahertz (or 1,190,000 cycles per second) and had 128 bytes of random access memory. The maximum resolution was 160×192 with 128 colors.

Combat (video game) for the Atari system, and Gears 5 (video game) for the Xbox series x

The Xbox Series X graphics chip runs at 12 teraflops, or 12 trillion floating-point operations per second. It has 16 gigabits of memory and 1 terabyte of storage and can display billions of colors on an 8K display.

The Series X can display 1,080 times more pixels in millions of more colors 10 million times faster with 125 million times more memory. In the past 46 years, computer creativity has grown exponentially abundant—just as Gordon Moore and George Gilder predicted.

A version of this article was published at Gale Winds on 10/24/2023.

The Human Progress Podcast | Ep. 37

Stephen Barrows: The Economic Madness of Malthusianism

The economist Stephen Barrows joins Chelsea Follett to discuss the intellectual history of population economics, the benefits of population growth, and what we can expect from a future of falling fertility.

Blog Post | Cost of Technology

Portraits Were Just Expensive Selfies

This was originally published on Pessimists Archive.

In the process of exploring reactions to the advent and development of photography, we came across a fascinating article about ‘sun pictures, ’an early name for photography. One notable observation—something we don’t think about today—was that photography extended portraits to everyone. What was once only for kings, queens and titans of industry became available to everyone. This got us thinking, weren’t portraits just expensive selfies? And aren’t selfies just the portraits of modern times?

The full article can be read here and is well worth your time.