The total difference in physical resources consumed in each case is insignificant and has little relationship to the difference in price
This is an interesting departure from conventional consumer choice theory. You argue, producers bear no costs; therefore, ceteris paribus, buyer 'wealth' determines amount of premium demanded per unit 'output'? Diversity is the key to economic and political evolution.
Another problem is the difference in buying power between then and now. A loaf of bread was available at about one pence, a standard "fair price" according to a concept left over from the middle ages. With a change in the price of raw materials, the price didn't rise or fall as it would today; the size of the loaf changed.
and a Qualification 2, i.e.
In 1776 only 22% of the American population participated in the monetary economy, but that number had reached 66% by 2000. ... The numbers 22% and 66% refer to the number of people who work for money, not the number, obivously, that participate in the monetary economy.
making the marginal utility of money a somewhat problematic basis of comparing preference. Diversity is the key to economic and political evolution.
You would measure productivity, in terms of service, by the number of people a service worker can serve. But it is entirely possible to measure it in the quality of service provided too. But since quality is a largely subjective concept, how do you really know what part of income increases are due to quality improvements and what part are due to productivity improvements in the non-service part of the economy?
You can probably find a few professions where it is not easy to define the "output," and therefore is not easy to define "productivity." But they are not going to form a major component of any sustainable economic structure.
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
