The question that has been bothering me is: ’Why could I buy a big house in San Francisco on one salary in 1964 at age 26 and my kids couldn’t at the same age and my grandkids certainly can’t?’
In the simplest case the wife of one kid came from a working class large family where getting a college degree was sold as a way to succeed. The degree was necessary for the license in her field but her earnings have never come close to covering the interest on the college loan even after 23 years. There is no insight needed in that case. College loans have drastically altered lives.
College tuition has risen at a far greater rate than other costs for 50 years; due both to the lack of international competition, and the total absence of any institutional efficiency. Out of control college costs are the result of government subsidy and regulation.
Our whole society has faced the same problem, not just the population in the bottom seven out of ten deciles. Aside from the college loan issue there are two reasons for the decline in living resources in 50 years.
First the genuine explosive growth of the economy has occurred after 1960 when the hereditary elite class was replaced with meritocracy.
The elite class had previously maintained a strong control over the excessive and restrictive functions of government.
Second, American style democracy got out of control once the restraint of the elite was displaced by union power. Unions, in every urban area, replaced the elites in America in the 1960s. Union power is the triumph of medieval values where seniority and wage equality triumph over merit and all other modern-commercial values including hard work, personal initiative and innovation.
American style democracy turns out to be a failure in times of rapid commercial economic growth when it is combined with union government control. Suggested originally by Milton Friedman.
I saw the transition when I worked in the California legislature as a campaign manager and legislative aide in 1964. Legislators were always atypical people. Not too bright, very tribal in their values which gave immense power to the Democrat Party. They are small-minded people determined to get re-elected by passing as many laws, often frivolous and impactful on daily life, as possible. I saw Jesse Unruh use union money and the Democrat Party to take personal control of the California government. He later handed it off to Willie Brown.
For the past sixty years legislators have passed 500 bills annually on the state level and the same numbers on the federal level. This has made the successful functioning of commerce nearly impossible.
It has promoted large business over small business because economies of scale can cover the costs of dealing with overwhelming government bureaucracy.
I have worked as a consultant with a vast number and array of businesses. I have watched their productivity stifled every day in every way by incredible and obsessive control of commerce by out-of-control government.
The extraordinary power of modern commerce to produce wealth for everyone has been negated, totally, by 60 years of ponderous growth of government regulation.
That is why my grandchildren may have technological miracles in their lives without the ability to buy a house on one person’s income.
Solution
There is a solution that I don’t expect to see in my lifetime: sortition. My book A Citizen Legislature in 1985 (with Chick Callenbach) explains how randomly selected people can serve a three-year term in a legislature and provide a truly democratic governance. Such citizens would never increase the number of laws that would constrain them.