Monday, August 04, 2003

Reaping the Benefits of Capitalism

One of my favorite fallacies about capitalism and prices is the idea that things were somehow cheaper in the past. People love to cite gasoline prices as an example. It may just be that because gas prices are posted on every corner for all to see that they suffer such scrutiny. However, I began driving in 1984, when gas was $1.20/gallon. Yesterday, I filled up for $1.38/gallon. That's a jump of 18 cents over 19 years, an annual jump I'll take for the rest of my life, if possible. But you know what? I'd probably be on the losing side of the proposition, because, if it were not for the rises in taxes applied to gasoline over the years, the price would actually be lower than it was in '84.

When I began driving, a set of tires was good for about 30-40,000 miles, depending on the kind of driving you did (highway or city), the kind of driver you were (good or bad), and the brand.

I bought a brand new Saturn SL2 in 1997, and got 52,000 miles on the factory Firestones. I was really pleased with the performance, but I chose to replace them with a set of Bridgestones. The total cost was $414, just over four years ago.

The Bridgestones met their death today. One blew out on the highway over the weekend. I was exceptionally pleased with the performance, however, as I got 77,000 miles out them!

Despite this, I replaced them with a set of Pirellis. They are said to be a better tire. They are warranted for 85,000 miles, with free replacement, plus free road hazard replacement! Total cost? $362.48!

The benefit of capitalism: The real price for a better product today costs less than it was for an inferior one four years before.

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