[londons_explore]

I suspect it's because inflation has been underestimated for the past ~hundred years. Over time, that really compounds.

A fairer way to look at it is how many years of the average citizens salary is it.

The manhattan project was $2B in 1944, or 121,000 median-family-years of work using salary figures from the 1940 census.

Apples stock buyback was $110B in 2024, or 122,910 median-family-years of work using figures from the 2022 census.

So, the inflation figures under represent the cost by a factor of 3.5 over those 80 years.

[maratc]

One thing that might be missing from your calculation is that "one median-family-year of work" meant "about one person working" in 1940 but means "about two persons working" in 2022.

[Retric]

The difference isn’t quite that large as many households are just single people and while the female labor force participation rate increased (34% 1945 vs 57% now) the male labor force participation rate declined ( 83% 1948 vs 68% now). https://fred.stlouisfed.org/series/LNS11300001

Similarly there where a great deal of households in the 1940’a with two working adults.

[spywaregorilla]

The share of dual income households has more than doubled. Your statistic seems likely to be biased by people retiring.

https://www2.census.gov/ces/wp/2019/CES-WP-19-19.pdf

I'm guessing the rise of dual income houses is much more visible in the median than are retirees dropping down the labor force participation rate.

[Retric]

You read that statement incorrectly, the share of dual incomes among married couples doubled.

Married-couple households however have dropped dramatically over time, 76% of households in 1940, 55% of all U.S. households in 1990, and 46% in 2020. “In 1940, married couples with children represented 43 percent of all households; married couples without children represented 33 percent of households”

[spywaregorilla]

Sort of interesting, but I think does not negate the point. A dual income household is not necessarily a dual income married couple. For the purpose of calculating dual income households, you have to consider non married romantic partners and even just relatives and roommates. And again, retirees dropping things down.

I cannot find stats going back, but a majority of current households today are dual income. https://www.bls.gov/opub/mlr/2020/article/comparing-characte...

This effect of the median family being dual income is likely true for now, and false for 1940. It is much stronger if you subset down to "families", but this nuance doesn't likely appear in the "median household income".

[Retric]

That’s not 54.4% as dual income households that’s 54.4% as more than 1 income.

In the 1940’s multi generational households with multiple income earners were common. In 1940 only 7.8% of all households had a single person vs 26.7% by 2010. Working adult children would frequently stay at home until marriage and sometimes past that point.

This is one of those things you need actual data based on similar definitions to compare.

[bombcar]

Female labor force participation near the end of a major world war was already probably much higher than just a few years before.

[mgiampapa]

It's also discounting workplace efficiency gains. Both white and blue collar jobs are far more efficient than ever before.

[maratc]

OTOH, an interesting point is that the Manhattan project cost 0.4% of GDP in 1940, and Apple buyback ($110B) is 0.4% of 2023 GDP ($27T).

[pmontra]

Apple gets its money from all around the world, so every country pays a part of those buybacks.

The USA in 1940 were a smaller empire than they are now so, I might be wrong, but the Manhattan project money came mostly from inside the country.

This means that it's easier for Apple to find and spend those money than it was for the USA in 1940.

[ralfd]

Population of US was also only 132 million in 1940. Today it is 333 million.

[Laremere]

This take ignores the unpaid work performed for the family and community, largely by women. When two people in a family are employed, more of their household labor (cooking, caring for the young and the old, etc) is purchased instead of provided by a family member.

[adrianN]

Housework productivity has gone through the roof since the invention of dishwashers, washing machines, dryers, etc. My grandma used to actually work hard the whole day to run the houshold. My family today manages with maybe two or three hours of light work per day.

[ornornor]

If only we did the same with other work, we’d also all only be working a few hours a day rather than 8–9 still.

[_heimdall]

People don't actually want this. We sell ourselves on the Jetsons-like idea of automating away our daily tasks so we can just live our lives, but that scares us.

Most people don't actually seem to want to have mist most of their waking hours free to do whatever they want.

[ornornor]

I do think so as well. "But what would I do with all this time?"... I find this so sad.

[mschuster91]

But how would Jeff Bezos swim in money if his underpaid parcel couriers would be able to financially survive on working four hours a day?

It's utterly ridiculous how much of the productivity increases of the last decades ended up not distributed to the workers either in terms of wage/salary hikes or reduced working hours. Something like billionaires rarely existed for a long time, usually it was the royal family and that's it - and now, alone in the last 20 years the amount of billionaires is 6x higher than at the start of the millennium. All of that wealth has been looted from the lower classes and in quite a few cases the taxpayers.

[1] https://de.statista.com/statistik/daten/studie/220002/umfrag...

[pmontra]

Add sewing, making and repairing clothes, curtains, sheets and covers, etc. We buy them now.

[watwut]

To be fair, they were buying those in 1940 too.

[pmontra]

Yes, but they cost much more than now so it was very common to have a sewing machine in every house and use it. If you're 30 and have a sewing machine at home now, chances are that you're a cosplayer.

[leobg]

Well. The partner staying home in the 1940s also rendered services to the family. Services that now need to be purchased from outside. So really, it’s always two people spending their waking hours. Only I suspect that in the 1940s, things were a little less stressed out. Judging from today’s bestseller lists and all those productivity and hack your body / marriage / x podcasts.

[watwut]

The wife still needed to eat and get cloth. That one person needed to feed her. Also, female employment was 28% not 0 in 1940.

[lumost]

As economies develop, goods become cheaper and services become more expensive. If you visit rural Peru, a massage is roughly the same price as two gatorades - or 3 liters of clean drinking water. Shoe shining is 1/10th the price of a 1 liter bottle of clean water.

Contrast this with the US where a service like a massage would be >100x more expensive than a liter of clean drinking water. The same pattern holds true with other services such as shaves/haircuts etc.

[littlestymaar]

Yup, and it's called “Baumol's Cost disease”.

[fulafel]

Also lots of the project ingredients were not really market commodities. There could have been a lot more exchange of money involved if eg there had been a market for weapons grade uranium/plutonium or moon rockets and staff had been paid FAANG salaries.

(There's of course a big opportunity cost in employing the best physicists and biggest r&d investments in nukes - eg solar energy and grid storage could have been here decades earlier in an alternative scenario.)

[littlestymaar]

> So, the inflation figures under represent the cost by a factor of 3.5 over those 80 years.

But this is not inflation per se, it's what's counted as “economic growth”: the median family in 1940 had a much lower standard of living than the one in 2024.

But of course sorting what's inflation and what's relevant economic growth is highly subjective: some things like cars and housing have literally inflated (they are enormous now compared the what they looked like even 40 years ago) and that's usually counted as economic growth, but is it really? In some way it is: having a bigger house is nice. But in other way it's not: do you really need that much space when you're older and the children left long ago? And sometime it's actually a net loss: living 30 kilometers away from work and depending on a car for everything is not a gain.

Same for electronics: computers are much, much faster than they used to be in 2000, so the statistics counts that as economic growth. And it is, you couldn't do modern AI on 2000 hardware, or physics simulations for industry and all. But at the same time, for the average consumer, the gain in speed has been eaten by software consuming more and more resources. Sometimes from sheer laziness (there's literally no reason for Windows to be this slow) but sometimes it's a bit more ambiguous: today's video games couldn't run on hardware from 20 years ago, and I remember being very happy to see the graphics improve during my teenage years so it's not entirely pointless. But at the same time, it's not as if video games were more fun or enjoyable now than they were 20 years ago: the consumer surplus from video games is basically the same no matter the quality of the graphics, so maybe it shouldn't be counted as growth at all.

The measure of “real” economic growth (and the measure of inflation) depends a lot on how you weight these things (it's called “hedonic adjustment”) and as we've seen, it's very difficult, and fundamentally subjective. And I wish statistics agency provided a measure of CPI without hedonic adjustment in addition to regular CPI (like they already do multiple variants of CPI depending on the basket of goods that's taken into account).

[scrlk]

In 1944, the USD was pegged to gold at $35/troy oz. The current spot price of gold is $2300/troy oz. 1 troy oz of gold in 1944 = 1 troy oz of gold in 2024.

This gives the price of the Manhattan Project as $131 billion in 2024 dollars.

[noxvilleza]

Not sure if this is that good of a metric given that I've read before that in recent history, precious metals have much higher demand where there is crisis and instability - and 1944 is certainly one of the peaks for that. I guess since 2023 it's also been quite a peak.

[chaostheory]

It’s a great metric at the moment for the reasons that you’ve given. We are living in a period of crisis and instability. Just like in that time, we are close to yet another global war. The difference is whether or not nuclear weapons will keep things from further escalating.

[eru]

> We are living in a period of crisis and instability.

What? We are living in a golden age of unprecedented peace and prosperity. By and large, people never had it so good.

[Dalewyn]

The west (and some tag-alongs like Japan) is living in a golden age of unprecedented peace and prosperity.

The world at large has other ideas, especially continental Asia and the Middle East where people seemingly can't stop brutally killing each other.

[eru]

Have you had a look at the graph of GDP per capita in eg Bangladesh recently?

PR China has also seen enormous advances in prosperity, and hasn't been in a major war in 70 years, either. In India obesity is a bigger problem than starvation. And approximately everyone can afford a smartphone, too.

South East Asia is doing fairly well, too, compared to historical averages. Even Sub Saharan Africa is finally starting to catch up.

Yes, there are still wars, alas. But by and large people are richer and living more peaceful lives.

We could look at statistics, if you wish. (I was looking for a graph of casualties of war over time for my previous comment, but couldn't find one that was recent enough, sorry.)

The founding Prime Minister of my own adopted home of Singapore wrote a book called 'From Third World to First'. And he's right.

[ithkuil]

We have to put things in perspective.

During the Balkan wars about 5% of Europe's population lived in a country that was at war.

Yet that time period was relatively peaceful compared to the first half of the 20th century where Europe went through two total conflicts.

Yet for me the war in Yugoslavia was of personal significance and I felt it and its longer term effects closely.

But it wouldn't be fair for me to just dismiss that the second half of the 20th century was a time of peace and prosperity in Europe, because a part of it was burning in flames and committing atrocities to who were their brothers 5 minutes before.

The precariousness of peace is what makes it so valuable.

Yes. There are conflicts all around the world. Wars. Oppression. Injustice. Racism.

I don't think that recognizing that we're living unprecedentedly peaceful and just times is going to make those conflicts and injustices worse.

Quite the contrary. I feel that never recognizing the successes and progress that humanity has made in many of those fronts is what will eventually doom us to regress.

[richk449]

It was the best of times, it was the worst of times.

[lesuorac]

But why is gold a better metric than anything else?

Like if there's a global war I bet people are going to want canned food much more than a gold chain. So should we use the price of chicken soup in 1944 vs 2023?

---

But yeah I also agree with eru; being "close to yet another global war" is a way better place to be than "actually in a global war". Considering pretty much every century has them.

[noxvilleza]

Precious metals (gold/silver) are very expensive given their weight, relatively easy to divide up, and won't significantly go stale or decompose (some oxidation will occur - sure). I'm sure there are other assets that this is also applicable to - it's just the categorical example I remember discussing with my accounting teacher ~19 years ago.

[eru]

> [...] and won't significantly go stale or decompose (some oxidation will occur - sure) [...]

Just to nerd out a bit: You can dissolve gold in some particularly strong acids, but it doesn't really diminish the value of the gold. The effort for getting it back into elemental form is small relative to the price it fetches.

Compare this to eg aluminium, or to make an even starker contrast: wood.

[wakawaka28]

No, in 1944 the dollar was fixed at $35 per ounce of gold. It was not a time of crisis for the gold market, because gold was money. The peg was eventually removed (I think in 1971). Right now there are factors driving the price of gold up, including massive central bank purchases and also massive understated inflation in the West. Everyone knows that fiat currencies are fleeting so the world is preparing for an inevitable decline or collapse of the dollar.

[SideQuark]

It's easy to check BLS inflation against old ads for goods and see that BLS inflation is pretty spot on. I've yet to meet someone claiming "massive understated inflation" that has done this simple check honestly.

As to the claim that "fiat currencies are fleeting," it is a fact every country of 200+ has one, so it's safer to say every non-fiat currency has failed.

There's also significant empirical evidence such economies are on the whole less volatile than older ones limited by how fast one can dig material out of a hole. See a list of severity and frequency of US recessions, or study the Great Moderation, or simply look at the volatility of gold prices, to see how unstable non-fiat pricing is.

[djtango]

Have you ever noticed how inflation metrics are always finding ways to ignore how housing and rent has gone up much faster than wages?

Pretty much all the important things in life have gone up more than stated inflation.

I don't care that I can get a cheap very environmentally unsustainable cardigan for less than ever before. Likewise for a watery nutrition-less tomato.

Meanwhile education, housing and healthcare are the least affordable they've ever been.

https://en.m.wikipedia.org/wiki/Baumol_effect

[randomdata]

Inflation isn't a cost of living metric, it is an attempt to determine change in value of the currency. A change in value of, say, housing is independent to a change in value of the currency. And housing is undeniably more valuable than it once was for a long list of factors.

If you want to understand cost of living, just look at your personal bookkeeping. It will paint the most accurate picture. There isn't much to be gained in reporting cost of living in the news – unless you think aliens on some far away planet will take interest a thousand years from now when the signal arrives at their location.

[wakawaka28]

>It's easy to check BLS inflation against old ads for goods and see that BLS inflation is pretty spot on. I've yet to meet someone claiming "massive understated inflation" that has done this simple check honestly.

When property values blow up 50% in a year or two and people pay $20k+ over sticker for cars, it's not "supply chain issues" nor 8% inflation dude. I have looked at old ads for stuff, and the difference is that now the same goods are manufactured for 1/10th the cost overseas and somehow cost way more anyway or at best roughly the same price as before. The BLS has a very complex scheme for understating inflation that involves substitutions, hypothetical costs, and other gimmicks. It wasn't always so fishy but the change was made to make the economy look better. I could argue with you at length about details but I can tell it will not be productive.

>As to the claim that "fiat currencies are fleeting," it is a fact every country of 200+ has one, so it's safer to say every non-fiat currency has failed.

Gold and silver are valuable everywhere and have been since they were first discovered many thousands of years ago. So your claim is utterly false. Every fiat currency that has existed has gone to zero, as well as any that were based on claims of redeemability.

>See a list of severity and frequency of US recessions, or study the Great Moderation, or simply look at the volatility of gold prices, to see how unstable non-fiat pricing is.

Gold prices are only volatile in terms of dollars, due to speculation in the futures market. The banks and governments play games with gold prices to discourage investors from seeking it. There are some cyclical or geopolitical factors in it too. But as JP Morgan said, "Gold is money. Everything else is credit." It can be manipulated but not nearly as much as fiat.

[SideQuark]

> I have looked at old ads for stuff, and the difference is that now the same goods are manufactured for 1/10th the cost overseas and somehow cost way more anyway or at best roughly the same price as before

If you believe this is the general reason, then you should invest in all these companies making 80+% profits and get the amazing returns.

Oh yeah, those companies don't exit, maybe because the claimed reason doesn't exist.

> Gold prices are only volatile in terms of dollars, due to speculation in the futures market

That's nonsense. Gold has always been far more volatile than goods, which is precisely the reason the world saw the incontrovertible evidence during the Great Depression, which is why all of the 200+ countries on the planet left it as a standard. If it were some magical better way, then surely at least one of the 200+ countries would do it and win, but it has been clear nearly a century what a bad idea it is.

> Every fiat currency that has existed has gone to zero,

Well, there's 200ish of them that exist right now above zero. And guess what? Every single non-fiat currency has failed, since there are zero left. You can keep claiming otherwise but this is reality.

> Gold and silver are valuable everywhere and have been since they were first discovered many thousands of years ago.

So are cattle and a zillion other old goods. That does not make them a good currency or a basis for an economy.

Tying your economy growth to the rate you can dig up gold is also a reason that those thousands of years saw economic growth at a fraction of a percent. When mankind realized the stupidity of limiting growth in all areas to the growth in digging up gold, and detached the two, economic growth greatly increased. You cannot invest in new production, inventions, and goods, without having capital. Limiting capital, i.e., gold supply, results in lower growth.

[csomar]

It's important for people to realize that the US dollars market are quite open that if the current actors thinks that the dollar is going down, it'll go down very fast. So if you are an average HNer (citizen) don't go freak out and put all of your money on gold or bitcoin. (This is not a long-term assessment though; that being impossible to predict the far future).

Nobody wants to see the US dollar collapse overnight. Neither the US nor China (which holds trillions of US bonds). But everyone wants to move from that standard including the US (which, being the reserve currency, has suffered a horrible NIIP since the end of the gold standard[1]).

1: https://en.wikipedia.org/wiki/Net_international_investment_p...

[roenxi]

That seems to subtly assume that a century of technological progress hasn't changed the value of what a family can produce. That is pessimistic given that computers were maybe the greatest leap forward in technology related to engineering design.

A Manhattan project should be much more achievable today than it was in the WWII era.

[hn_throwaway_99]

I understand what you're getting at, but equating wage inflation with price inflation would be a mistake that would lead to some nonsensical results.

That is, if you only look at wage inflation, it would mean that you can never factor in productivity improvements to how much more people can buy with their money.

[SideQuark]

Measuring inflation by salary is misguided, since real wages are not fixed as is clearly demonstrated by an honest rise in purchasing power. Food is a much smaller portion of income is a trivial way to see the dramatic changes.

Inflation is not underestimated by a factor of 3.5 over that time, as can be checked by nominal prices of a suitable basket of goods, which is the definition of inflation.

[randomdata]

Except food is less valuable than it once was thanks to changes in production techniques being able to produce a whole lot more of it for a fraction of the cost.

Ideally, inflation only observes the change in value of the currency. Easier said than done, of course.

[SideQuark]

> Except food is less valuable than it once was thanks to changes in production techniques being able to produce a whole lot more of it for a fraction of the cost.

There is no "except." This is central to inflation definition and econometrics.

As a result the average budget spends less on this component. Inflation tracks a basket of goods of what people currently buy, then compares that to neighboring adjusted baskets. For example, we don't buy as many horses and buggies any more, so that component of the basket has phased out. Electronics has phased in.

> Ideally, inflation only observes the change in value of the currency.

Not really, since different goods do not always correlate in price, so there is no "value of the currency". There are values of goods priced in a currency, which do not move in lockstep.

Inflation is defined as the general rise in prices, and in this case is precisely measured relative to (several) baskets of goods obtained by statistical sampling of the US population. All the precise methodology, data, sampling methods, etc., are all easily found on the BLS website.

[randomdata]

> Inflation tracks a basket of goods of what people currently buy

Exactly. If there was no except, you could just peg inflation to an apple and be done with it. You need the basket exactly to filter out the noise that occurs when the goods in the basket see an independent change in value. Food is unquestionably less valuable today as compared to most of the past, irrespective of the change in value of the currency.

> Not really, since different goods do not always correlate in price

Exactly. That is because everything has its own independent value, including currency, which change over time independently. Let's say you can buy an apple for $1 today. But tomorrow a damaging storm decimated the apple crop. Now it takes $2 to buy an apple. Did the price rise because apples are now more valuable, or because the dollar is less valuable?

Who knows? It is impossible to know. But if you look at the change across many items...

> Inflation is defined as the general rise in prices

Exactly. The general rise in price is the value of the currency declining. It is statistically improbable for all the items in a basket of goods to gain in value at a similar rate all at the same time. As such, you can conclude with near certainty that the rise in price is a result of the decline in value of currency.

As it pertains to the above, if a general rise in price over a given period is 25¢, while apples are up $1 over the same period, then you can reasonably surmise that the storm caused apples to become 75¢ more valuable than the previous state with the other 25¢ being a decline in the value of the currency.

There is no perfect way to measure the change in value of currency, but that's a really good way to do it. Which is why we do it.

[MattGaiser]

Average family has a ton more in material goods, both in quality and quantity.

So it isn’t that inflation is underestimated. The average family truly is richer. Far more house. Far more car. Far more and better food.

[chimpanzee]

Quantity? Absolutely. Quality? That’s debatable; it’s highly dependent on the goods in question and how quality is measured.

[throwup238]

I think you're underestimating the technological development in the last 80 years to a comical degree. In 1944, half the country didn't have flush toilets!

[bombcar]

Anyone who does serious work with ancient technologies knows both that the older stuff was much more repairable but also needed to be repaired much more often.

Material and building science has advanced a mind boggling tremendous amount - even modern toilets are significantly better than an actual un-upgraded 40’s - if you can find it.

At the same time we can mass manufacture endless cheap plastic shit.

[eru]

> At the same time we can mass manufacture endless cheap plastic shit.

You say it like that's a bad thing.

[amarant]

Good or bad are subjective, but "endless cheap plastic shit" certainly does lower the average quality of goods available today.

[jhbadger]

And remember that just a few years before in 1936, there was the Rural Electrification Act to provide rural people in the US (who had basically been living 19th-century style) with electricity, which was standard for town and city dwellers for decades.

[bawolff]

Just because something is higher quality does not mean it has higher subjective value. E.g. i still think i come out ahead with cheap clothes and a laptop then someone 100 years ago with higher quality clothes.

[coffeebeqn]

I’d rather have a house than shitty fast fashion but your mileage may vary

[astrange]

Probably don't want a common house from 1924 with lead paint, an indoor wooden stove for heating and an outhouse.

[jhbadger]

Also average houses from that time period were tiny, with about ~1000 sq ft of livable space. That people were expected to raise families in. My apartment (which is just for me and my cat) is bigger than that!

https://www.newser.com/story/225645/average-size-of-us-homes...

[eru]

If you can find a neighbourhood that's as dangerous and unsafe as those a hundred years ago, the house would be very cheap compared to GDP per capita.

[edmundsauto]

A better comparison would be this: would you rather have 3 suits that you wore everyday that cost a months wages, or 30 shirts and pants that cost a weeks wages but are lower quality.

(Also, IMO, houses today are much higher quality than in the past as soon as you account for safety)

[ornornor]

The answer differs whether you answer it selfishly or with the greater good in mind (resource use/waste, pollution, etc)

[moneywoes]

is median family income a good measure since it represents the cost of R&D?