77. The conclusion of this letter is that consumers are not truly benefiting from
advances in agricultural technology. The author concedes that, on the average,
consumers are spending a decreasing proportion of their income on food. But the author
contends that this would happen without advances in agricultural technology. The
author reasons that demand for food does not rise in proportion with real income, so as
real income rises, consumers will spend a decreasing portion of their income on food.
This argument turns on a number of dubious assumptions.
First of all, while asserting that real incomes are rising, the author provides no
evidence to support this assertion; moreover, it might be false. Even if salaries and
wages go up, this fact may not indicate that real income has increased proportionally.
Real income takes into account any effect inflation might have or, the relative value of
the dollar. It is possible that, when salaries and wages are adjusted for inflation, what
appear to be increases in real income are actually decreases.
In addition, the author assumes that increases in real income explain why, on the
average, consumers are now spending a decreasing proportion of their income on food.
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