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Wealth & Poverty Review Bicycles on Sale: 95.4% Off

Originally published at Substack

In 1910 you could buy a bicycle for $11.95 from the Sear Roebuck catalog. This sounds like a good deal until you realize that blue-collar hourly compensation was 18 cents an hour. This means that it would take 66.4 hours to earn the money to buy one bicycle.

Today you can buy a bike at Walmart for $99. The nominal price has increased by 728 percent. But hourly compensation has increased 17,998 percent. Blue-collar workers earn $32.54 per hour today. The 2021 time price is around three hours. If the time price of a bicycle had stayed the same since 1910, one would cost around $2,160 today. (66.4 hours x $32.54)

The time price has fallen by 95.4 percent from 66.4 hours to 3 hours. For the time require to earn the money to buy one bicycle in 1910, you will get almost 22 today. This represents a 2,082 percent increase in bicycle abundance. This astonishing increase in bicycle abundance occurred while global population increased 345 percent from 1.75 billion to 7.8 billion.

You can calculate the size of the global bicycle resource pie by multiplying the size of the population by the bicycle resource multiplier. In 1910 there were 1.75 billion people, and it took 66.4 hours to earn the money to buy one bicycle. We can say the pie in 1910 was 1.75 times 1 or 1.75. Today we have 7.8 billion people, and you can buy 22 bicycles for the time it took to buy one in 1910. The global bicycle pie today would be 7.8 times 22 or 170. The pie increased from 1.75 to 170 or 9,625 percent. For every one percent increase in population, bicycles have become 28 percent more abundant.

If everyone had spent the time to earn the money to buy a bicycle in 1910 it would have required 116 billion hours (1.75 billion x 66.4 hours). Today it would only take 23.7 billion hours (7.8 billion x 3.04 hours). While population increased by 345.7 percent, the time required to provide everyone with a bicycle has dropped by almost 80 percent. We call this type of development “Superabundance.” Superabundance occurs when resources are increasing at a faster rate than population.

Yes, we have more people on the planet today than 1910, but we are all enjoying much more prosperity with bicycle abundance.

Sources: measuringworth.com, https://www.walmart.com/ip/Huffy-26-Cranbrook-Men-s-Comfort-Cruiser-Bike-Matte-Blue/797852324

Excerpt from our forthcoming book The Age of Superabundance.

Gale Pooley

Senior Fellow, Center on Wealth & Poverty
Gale L. Pooley is an associate professor of business management at Brigham Young University-Hawaii. He has taught economics and statistics at Alfaisal University in Riyadh, Saudi Arabia, Brigham Young University-Idaho, Boise State University, and the College of Idaho. Dr. Pooley serves on the board of HumanProgress.org.