2012 laptop and flash drive
Fast forward to 2012. The bottom graphic above comparable equipment today – an HP Sleekbook laptop computer and a SanDisk flash drive. The HP Sleekbook laptops sell today starting at $500, and they weigh less than 4 pounds and have 4 gigabytes of memory, which is 62,500 times greater than the 64K of memory in the 1984 model. Adjusting for both price and quality, today’s laptop is 500,000 times cheaper than the 1984 model (62,500 times more memory and 8 times cheaper).
A 32 gigabyte flash drive today sells for only $30, and has almost 3,000 times more storage space than the 1984 external hard drive. That would be about 670,000 times cheaper adjusting for price and quality – today’s flash drive is 223 times cheaper in price and is 3,000 better in terms of storage space. And of course today’s flash drive fits on a key chain, whereas the 1984 hard disk drive wasn’t portable.
Measured in time worked, the average American in 2012 would only have to work about 27 hours (about 3.5 days) at the average wage today of $19.79 to purchase the HP laptop and the SanDisk flash drive, compared to the five months of work in 1984 to purchase the “cutting edge” portable computer and external disk drive of that era. And today’s laptop is 6 times lighter with 62,500 times more memory than the 1984 portable computer, while today’s flash drives store thousands of times more data than the external drives in 1984.
Today’s computers, cell phones, and electronic products are mind-blowingly cheap and powerful compared to past decades, and reflect the overall trend throughout the economy towards better and cheaper products over time, especially manufactured goods. If the dramatic price reductions and quality/speed improvements of computers and other electronic products happened suddenly all at once, it would probably be declared to be a miracle. But when the price reductions and quality improvements happen continually, we become immune and either don’t even pay attention, or tend to take the improvements for granted without appreciating the incredible progress that has happened in our lifetime.
A comparison of today’s computer prices to 1984 also helps us appreciate how technological improvements elevate the standard of living of average and low-income American to levels that previous generations and wealthy households couldn’t have even imagined. The computers of the 1980s were expensive and generally only available to the upper-income groups, whereas today’s computers are now accessible by even low-income households.
Another lesson here might be that even a Great Recession can’t stop the progress of human ingenuity, technological improvements, and the entrepreneurial spirit that will continue the relentless trend towards better and cheaper products, and a continually rising standard of living. Matt Ridley pointed out recently in the WSJ that even the Great Depression didn’t slow technological progress, and that’s been the case through all of our economic downturns including the most recent one. There’s an “inevitable, inexorable and incremental march of technological improvement” that continues steadily even during recessions and depressions.
The economy and human progress are fueled and powered by energy, and the physical energy of fossil fuels for example is certainly important; but what ultimately powers and runs the economy are ideas, and there are more ideas swirling around on the planet now than ever before in human history. We should eagerly await the days ahead as the ongoing technological advances make our lives better, and I look forward to blog posts 10-20-30 years from now that look back on today’s “state of the art” $500 HP laptop and $30 SanDisk flash drive with the same amusement that we look back today on the “state of the art” computers in 1984.