TGIF: Are You Rich?

Yeah, you are.

Any color you want—as long as it’s black

Are most Americans rich? You be the judge.

I grew up in a middle-class Philadelphia family of six in the 1950s and ‘60s. We kids never felt deprived. We weren’t spoiled, and although we did not get everything we asked for, money was usually not the reason.

My paternal grandfather was essentially a retired small businessman (housepainter and paperhanger) by the time I was aware of what was going on. My paternal grandmother was a homemaker. They lived near us in a compact two-bedroom apartment in a three-unit house. Their income was fixed.

Those were the days of the government-created/protected AT&T monopoly. Ma Bell’s telephone service was not cheap. (For the record, the federal government delayed the appearance of mobile phones by one or two decades.) Bell, however, had a cut-rate plan in which households could make a fixed number of calls each month. Calls exceeding that number cost extra. The customers, however, could accept any number of calls at no charge. My grandparents had this arrangement. I assume my father and my grandparents’ other grown children, all successful, could have easily subsidized the telephone bill, so my grandparents must have refused their help because they valued their independence. I never asked.

You may have anticipated my next point. Since outgoing calls were limited and incoming calls were not, Ma Bell’s deal created an incentive. In terms of telephone service, it was better to receive than to give. Thus, their children and grandchildren should call them, not vice versa. But that presented a problem: how could my grandparents communicate that they wished to speak to the family? They could hardly call to say, “Call me back.” Problem solved (my father may have thought of this): whenever my grandparents wanted to speak to a relative, they would call but let the phone ring only twice. This was known in the family as the “signal.” (I’m sure other people thought of this.)

But this solution also presented a problem: kids—my siblings, cousins, and me. When the phone started to ring, would we remember—every time—to wait for a third ring, or would we impetuously pick up the phone the moment it rang? We were kids—waiting was hard, especially if you were expecting a call from a friend. In our house, therefore, the ringing of the phone was accompanied by a loud voice: “Don’t pick it up!” As you might guess, that was not a failsafe measure. A kid’s hand is quicker than a parent’s voice chords. I recall the embarrassment at having just cost my grandparents a completely unnecessary and avoidable phone charge. Still, I don’t recall being “fined” by my parents for my impetuosity.

That wasn’t the only way around Ma Bell. When mom implored us to call after arriving at a destination outside our area code, we would call “collect” (Google the word), knowing that when she heard the operator say our name, mom, at no charge, could refuse the call, confident we had arrived safely. In those days, a long-distance call most often heralded bad news or, if good news, something big, like the birth of a child.

If you—with your glorious smartphone, smart TV, and smart car—can’t relate to these stories, you now have a better idea about how rich you are, no matter your socioeconomic status. Retired people today don’t need to signal when they want to talk to their kids and grandkids; they hear and see thanks to Google Meet or Apple FaceTime.

The long-run trend has been this: necessities and an array of luxuries (which have become necessities) are spectacularly cheap by historical standards. This is seen clearly in terms of the time price of goods. Governments, of course, have kept the trendline from being smooth. In a thousand ways, politicians and bureaucrats impede the general fall in prices. Central-bank inflation is a major way. In the case of persistent departures from the trend—housing, medicine, education—we find significant intervention by state operatives who are not guided by the profit motive via market prices and who do not engage in voluntary exchange.

To make life even better for even more people, we don’t need petulance or anger. We need a concerted effort to educate the public on why we must separate market and state, just as we separate church and state.