“Many people have a memory of some ancient, avocado-green washing machine or refrigerator chugging along for decades at their grandparents’ house. But even then, decade-spanning durability was uncommon.

Although I couldn’t find a ton of hard data on appliance lifespan over the past 40 years, nearly everyone I spoke with — service technicians, designers, engineers, trade-organization representatives, salespeople — said that kind of longevity was always the outlier, not the norm.

‘Everybody talks about the Maytag washing machine that lasts 50 years,’ said Daniel Conrad, a former product engineer at Whirlpool Corporation who is now the director of design quality, reliability, and testing for a commercial-refrigeration company. ‘No one talks about the other 4.5 million that didn’t last that long.'”

From New York Times.

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.

Professor Mark Perry recently posted his updated “Chart of the Century,” featuring price and wage data from the Bureau of Labor Statistics (BLS). The chart tracks 14 items over the 24 years from January 2000 to December 2024 and includes both the overall inflation rate and changes in average hourly wages.

To examine the data from a different perspective, we calculated the change in time prices of these 14 items relative to the change in the average hourly wage. We then determined the abundance multiplier—a value that indicates how many units of an item you could buy in 2024 for the amount of work time it took to buy one unit in 2000. If there were no change, the abundance multiplier would equal one. A value below one indicates decreasing abundance, while a value above one reflects increasing abundance. We also calculated the percentage change in abundance for each item.

This analysis illustrates that things can become more expensive in dollar terms while simultaneously becoming more affordable in time prices. For instance, while the general Consumer Price Index (CPI) rose by 87.3 percent, average hourly wages increased by 123.3 percent. As a result, time prices fell by 16.1 percent. For the time it took to purchase one CPI basket in January 2000, a consumer could buy 1.192 baskets in December 2024—an abundance increase of 19.2 percent.

Notably, categories such as housing, food and beverages, new cars, household furnishings, and clothing all increased in money prices. However, after adjusting for rising wages, they became more affordable in time-price terms. Although 10 of the 14 items rose in nominal prices over the 24 years, only five had a higher time price when accounting for the 123.3 percent increase in hourly wages.

We also created a chart showing the percentage change in abundance for the general CPI and each of the 14 tracked items:

Find more of Gale’s work at his Substack, Gale Winds.

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