An advertisement for a 1956 Frigidaire refrigerator has recently been making the rounds on social media thanks to the appliance’s impressive features, like a removable produce drawer and automatic ice ejector. Hundreds of thousands of people fawned over the product, claiming that it is superior to the ones available today. As often happens, the truth is more complicated.
For example, the advertisement neglects to mention an important piece of information—the price. In 1956, a top-of-the-line Frigidaire cost $469.95. Back then, the U.S. blue-collar compensation (wages and benefits) rate was around $2.16 an hour, making the time price of the Frigidaire about 217.57 hours. Today you can get a Frigidaire at Home Depot for $549.00. It doesn’t have some of the nifty features of the older model, but at nearly 14 cubic feet, it is larger and more energy efficient.
The hourly compensation rate, in the meantime, has increased to $33.39 an hour, so the time price of a refrigerator has fallen by 92.44 percent to 16.44 hours. You can get 13.23 refrigerators today for the time price of one in 1956. Refrigerator innovation has been growing at an annual compounded rate of around 4 percent. At this rate, personal refrigerator abundance doubles every 17.7 years.
In 1956, the U.S. population was about 164 million. We have more than doubled in size to over 333 million today. The total time required to earn the money to buy everyone a refrigerator in 1956 was around 35.6 billion hours. The time today is only about 5.48 billion hours. So, we have reduced the total time to provide everyone with a refrigerator by 84.66 percent.
We can measure population-level refrigerator abundance by multiplying personal refrigerator abundance by population size. In this analysis, we went from a value of 164 in 1956 to 4,406 in 2022, a 2,586.8 percent increase. Population-level refrigerator abundance has been increasing at a 5.1 percent compound annual rate, doubling every 14 years.
Elasticity measures the relationship between two variables. Every 1 percent increase in population corresponded to an 11.87 percent increase in personal refrigerator abundance (1,223.3 percent divided by 103 percent) and a 25.1 percent increase in population refrigerator abundance (2,586.8 percent divided by 103 percent).
That said, what if you want a refrigerator that’s top-of-the-line like the 1956 Frigidaire was back in its day? This 22.5 cubic foot behemoth sells for $4,899.95 and has a filtered water and ice dispenser, humidity-controlled storage, and a freezer drawer with an independent temperature range (in case you want your beer extra icy but not totally frozen). At $33.39 an hour, it would take just 146.75 hours to purchase. That’s 33 percent less working time than was needed in 1956.
The next time you open your refrigerator to enjoy a cool beverage or a frozen dessert, thank our fellow human beings who work to discover and create little bits of knowledge each day that show up in the innovation abundance all around us.
You can learn more about these economic facts and ideas in our forthcoming book, Superabundance, available for preorder at Amazon. Jordan Peterson calls it a “profoundly optimistic book.”