What Air Conditioning Can Teach Us about Poverty and Inequality

“When you are poor, the sun finds you faster.” Those are the words of Juanita Cruz-Perez, a resident of San Antonio.

While she has an air conditioner in her home, New York Times reporter Edgar Sandoval reports that her $800 monthly budget doesn’t allow for air conditioning usage during the day. Please stop and think about what this discomfort means for her. San Antonio is brutally hot in the summer, and frequently well beyond. Sandoval reports that the city has had 46 days of 100-plus-degree weather in 2022 alone. In Cruz-Perez’s words, “The A.C. only goes on at night, no matter how hot it gets.”

Please expand your thinking about Cruz-Perez in terms of its meaning vis-à-vis the past. It was in the 1930s that air conditioners reached the marketplace. A Minneapolis heir purchased the first one. That an heir was the original buyer is instructive. Since window-unit style air conditioners ranged from $10,000 to $50,000 in the ‘30s, the obvious conclusion from the pricing of the innovative devices is that that they were well out of reach for 99.999999% of Americans.

So what changed? Why is it that the window units that once signaled immense wealth are most often today a signal of poverty? Really, where do you generally see window units? Most often not in rich areas. It’s in the poor ones that they can mostly be found, including where Ruiz lives. You see, what was once out of reach can now be found on Amazon at prices that dip below $100. Imagine that! What a story.

The story about the mass production of air conditioners is that what were once status symbols are now common. Crucial here is that people got very rich making air conditioners common. It’s how the world works. Or at least how to grow rich in the world. The best way to become very well-to-do very quickly is to produce in abundance, and at low prices, what used to be scarce and nosebleed expensive.

Translated for those who need it, inequality is born of democratizing access to essential goods. When you shout about inequality, you’re shouting at the very individuals who are aggressively and intrepidly removing unease from your life. From cars, to computers to smartphones, what was initially a bauble of the rich was rendered commonplace by people who attained great wealth for making them commonplace.

Which brings us back to Cruz-Perez. While she endures daily temperatures that Sandoval describes as “unbearable,” and while her diabetes and high blood pressure are “exacerbated by the stifling heat,” she can at least sleep comfortably at night thanks to evening usage of her A.C. being in her budget.

It all brings up a simple question: what if someone out there figures out a way to mass produce air conditioning in abundant, inexpensive fashion? Figure that it’s already been done with air conditioning units itself. What we need now is inexpensive operation of the units.

Assuming such an advance exists, would anyone reading this write-up decry it out of fear that the innovator’s wealth gains would increase already wide inequality? Whatever your own opinion, might you stop and think what side Cruz-Perez would fall on?

How about the residents of New Delhi in India. In my 2019 book They’re Both Wrong, I cited a New York Times report from 2017 indicating that air conditioner penetration in this sprawling city was in the 5 percent range. Temperatures in Delhi routinely rise above 120 during the summer. Would India’s poorest turn down an advance that would enrich the creator of same while at the same time reducing the brutality of Delhi summers?

It seems these questions answer themselves, or they should. While the Left leaning routinely lament soaring inequality, their uncontrollable emotions blind them to what preceded the inequality: most often it was the democratization of access to luxuries.

As for those dreading mass usage of air conditioning out of fear for the planet, they would logically just hang their heads in shame…assuming an ability to feel shame. Without conceding even an inch on the notion that greater human comfort burdens a planet that’s been around for billions of years (we’re so small in the grand scheme of things), one gets the feeling that those fearful of mass AC access live in locales where it’s plentiful. Basically they can whine about others having what they’ll never have to do without.

In the real world, progress is born of turning luxuries into common goods. It helps explain why the world’s poorest relentlessly migrate to where inequality is widest. They know what improves their lot. One guesses Cruz-Perez intuitively does too. 

This RealClearMarkets article was republished with permission.

Read More…