John Hood wrote in a recent Daily Journal column:
Since the mid-19th century, however, the share of the workforce devoted to growing and processing food and fiber has plummeted, even as the availability of food and fiber has exploded. Indeed, the ratio of agricultural workers to the rest of the workforce has almost always served as a reliable indicator of economic progress – the lower the ratio, the higher the living standards of the state or nation in question.
A chart accompanying Newsweek editor Tina Brown’s latest column offers us the following inflation-adjusted price comparisons from 1965 and 2012:
How is it possible that food prices have declined as other prices have increased? Turning back to John Hood:
The reason is that despite the furious claims of Luddites and neo-Luddites, increases in productivity are good things, not bad things. If new technologies, discoveries, or business forms allow firms to produce more stuff per worker per hour, consumers benefit. They get what they want at a lower real cost. That means they have more money to spend on other things – on luxury goods rather than necessities, or on services rather than goods – that need resources, labor, and capital to produce.