December 25, 2022 Reading Time: 3 minutes

If news of inflation and recession has you feeling a bit Grinchy, some historical perspective might put some joy back into the season. Our current economic woes are significant, and might worsen before they improve. Still, the season of gratitude and giving is a great time to celebrate the abundance around us. 

This year, Americans are poised to spend around $1000 on gifts, food, cards, and decorations. Yet, as usual, we’re nowhere near as poor as we imagine.

Market economies fuel incredible prosperity and the holidays provide useful examples of how we are better off today than a few decades ago. Consider the Christmas gifts and decor of years past, once deemed luxuries, now everyday goods.

During the Great Depression, people stuffed oranges in their Christmas stockings when the tropical treat was a rare luxury. Unless you lived in California or Florida, citrus was unavailable, especially in winter.

An orange then cost 29 cents; today, the national price is $1.64. But inflation amid a massive increase in abundance and affordability obscures the true price: an orange is six times higher in nominal dollars (up from 29 cents to 1.64). However, 29 cents then held a purchasing power equivalent to $6.30 today. 

Rises in productivity driven by technological innovation explain the difference. An “average” laborer (male, white, and in a semi-skilled trade like baking or bootmaking) in the early 1930s made 45 cents an hour and purchasing an orange represented nearly 40 minutes work. Today, even at the nominally increased price, the average American laborer (hourly wage $16.40) can afford an orange in just 6 minutes. 

Productivity isn’t the only thing that’s improved, but the quality of goods. A pound of ham for Christmas dinner cost just 8 cents in 1932, compared to $3 today, both representing around 11 minutes of work. But the sublimely cured, spiral-cut, vacuum-sealed ham we enjoy today is of such significantly better quality that the Depression-era worker couldn’t have bought it at any price. 

Beyond food, during the Depression, store-bought tinsel and evergreen garlands were quixotic, so people decorated with paper chains and strung popcorn as a cheaper alternative. If a family possessed full-sized spruce, it would have gone, not on a decorative stand, but into the wood stove for life-sustaining heat. The tradition of the Yule log and the Christmas tree comes from European paganism, where people in heavily wooded areas could obtain a tree for next to nothing – except the hours of work it took to hew and haul it. The commercial purchase of a tree, which this year averages $100, is a luxury-turned-necessity we happily pay to enjoy.

A drive through any suburban neighborhood reveals another hallmark of abundance: holiday light displays. Inflatable characters are now commonplace, though only used a few weeks a year. The ability to spend the fruits of our labor beyond basic necessities and on these external ornaments is telling. Elaborate decorations may cost hundreds in added electricity bills, and even the space we use to store them for the other eleven months now costs upward of $120 per square foot.

With a polar vortex bearing down on half the nation, we might forgo outdoor caroling, football, or festivities. But the power to heat our homes is cheaper, more abundant, and more consistent than at any time in human history. Natural gas and fuel oil keep many of us toasty, and even more of us run our heaters on instantly available electricity, generated mostly by coal. We don’t even have to burn those smoky, sooty saviors in our homes to harness their benefits

A dreary news cycle might mask the beauty of how markets deliver increasing prosperity for us to enjoy with our loved ones. And, for many families, the inflation from the Federal Reserve’s monetary malpractice is making this holiday season more expensive than recent years. 

Yet looking back at history reveals our current reality remains bright. Commonplace goods, such as oranges and Christmas decorations, considered luxuries only decades ago, are but one example. As this season passes, keep today’s holidays of luxury in mind the next time you observe negative media blaming markets or capitalism for the state of things. Through market exchange, we give each other unprecedented abundance, in this joyful season and all year long.

David Waugh

David Waugh is a business development and communications specialist at Coinbits, a bitcoin investment platform. He formerly served as AIER’s Managing Editor from 2021 until 2023, overseeing the publication of The Daily Economy. He previously worked for S&P Global Market Intelligence.

He has co-authored numerous academic book chapters and journal papers on cryptocurrencies, financial markets, political economy, and higher education. His popular writings have appeared in The Hill, RealClearMarkets, National Review, Commentary, Seeking Alpha, and various other media outlets and publications.

Waugh earned his BA in economics from Hampden-Sydney College.

Selected Publications

“General Institutional Considerations of Blockchain and Emerging Applications” Co-Authored with Peter C. Earle in The Emerald Handbook on Cryptoassets: Investment Opportunities and Challenges, edited by Baker, Benedetti, Nikbakht, and Smith (2023)

The Hyperpoliticization of Higher Ed: Trends in Faculty Political Ideology, 1969–Present.” Co-authored with Phillip W. Magness. Independent Review, (Winter 2022-2023)

“Cryptocurrencies, Blockchain, and Public Choice” Co-authored with Ryan M. Yonk, Cryptocurrency Concepts, Technology, and Applications, edited by Leibowitz (2023)

“Enrollment declines increase pressure on ‘woke’ higher ed” The Center Square, (January 2023)

“Fed’s cryptocurrency pilot opens door for dangerous retail option” The Hill, (December 2022)

“Pandemic Socialism: Hayek’s Critique of Scientism and the Fatal Conceit of Government Lockdowns,” Co-authored with Matt Kibbe in Pandemics and Liberty, edited by Raymond J. March and Ryan M. Yonk (2022)

“Do Diversity, Equity, and Inclusion Offices Achieve Their Stated Goals?” The James G. Martin Center for Academic Renewal (August 2021)

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Laura Williams

Laura Williams

Laura Williams is a communication strategist, writer, and educator based in Atlanta, GA.

She is a passionate advocate for critical thinking, individual liberties, and the Oxford Comma.

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