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Wednesday, January 4, 2012

Going to Graceland

A recent trip to Memphis took me to Elvis Presley’s famed home, Graceland. Touring Presley’s mansion and its grounds is fascinating for fans of his music, and the Presley estate has done a marvelous job in capturing his music and life. But visiting Graceland mostly interested me as an economist.

Walking through the home of a very rich American man from the early 1970s, I was struck by how much the quality of life for average people now exceeds what was available only to wealthy Americans 40 years ago. Let’s compare Elvis’s Graceland with how ordinary Americans live today.

Graceland began life in 1861 as a 500-acre cattle farm on the outskirts of Memphis, originally owned by S. E. Toof, a printer, who named the farm for his daughter Grace. Toof’s niece, Ruth Moore, and her husband eventually acquired the portion of the property where the house now sits, as well as surrounding acreage, completing the mansion in 1939.

It was planned as a showcase for their daughter’s musical talents, so acoustics were as important as aesthetics. (Their daughter went on to play with the Memphis Symphony Orchestra.) A 1940 article in the Memphis Commercial Appeal raved about the house’s “subtle beauty” and the architectural details, including the white marble in the fireplace. Even before Elvis acquired the property, the house had been recognized as being at the upper end of Memphis society homes.

Being a significant home in Memphis meant something beyond Tennessee. Memphis in the mid-twentieth century was no backwater. It was home to important military facilities, including the Memphis Army Depot, the Millington Naval Air Station, and a World War II prisoner of war camp. The first national motel chain, Holiday Inn, was founded there in 1952. The city was a cultural center as well, home to Stax Records, Sam Phillips’s Memphis Recording Service, and the nation’s first African-American-format radio station, WDIA. The city had a serious side too: The Commercial Appeal won a Pulitzer Prize for its 1920s coverage of the Ku Klux Klan.

When the Moores divorced they put the property (now reduced to 13.5 acres) on the market. Memphis realtor Virginia Grant had met Elvis’s mother, Gladys, by simply marching up to her pink Cadillac and rapping on the window when Grant spotted it outside a department store. Elvis’s fame was beginning to cause problems for the neighbors of the Presley house on Audubon Drive. Near-riots at his concerts and other appearances were worrisome. At the famous Gator Bowl “riot” in Jacksonville, Florida, in 1955, hundreds of screaming girls chased Elvis into his dressing room and tore his clothes. They also scratched messages on his car and wrote on it in lipstick. In 1957 the Presleys were looking for a more private and secure location. (Besides the deluge of fan mail to Elvis, his parents were getting over 500 letters a week accusing them of fostering juvenile delinquency.) Although Grant initially thought the Presleys wanted a farm, she recommended Graceland when she learned they just wanted a house on a large lot.

By the end of a day of shopping the Presleys had made an offer on Graceland, closing on the deal for $102,500—about $800,000 in today’s dollars. (Gladys died a year later.) At the time of purchase the house was 10,266 square feet; by Elvis’s death it had expanded to more than 17,000 square feet. Elvis redecorated and remodeled it extensively, adding features for himself (a swimming pool and a custom eight-foot square bed) and his parents (a chicken coop for his mother).

Presley lived at Graceland until his death there in 1977. Until 1981 the family continued to live in the house, although the neighborhood deteriorated as scores of souvenir shops opened to sell memorabilia, including vials allegedly of Elvis’s sweat, to the tourists who came to see the home from the road. In 1981 Elvis’s ex-wife, Priscilla (who became one of the executors of Elvis’s estate after his father, Vernon, passed away in 1979), hired a consultant to explore opening the house to the public as a way of generating the income necessary to maintain it. (Upkeep and taxes cost more than half a million dollars per year in the late 1970s.) After studying other famous houses open to the public, Priscilla and her advisers crafted a business plan that included purchasing the strip mall across the street to control the environment and, like San Simeon in California, from which visitors would be bused to the property. Hundreds of thousands of people now visit annually.

Comparing Our Lives to Elvis’s

In many respects Elvis Presley’s life looks to have been that of a wealthy individual with access to resources most of us lack. His two jets are parked across from Graceland; of course the vast majority of Americans lack any sort of plane. Elvis owned dozens of expensive cars and motorcycles, far more than most Americans are likely to own during their lives. But owning planes and cars is not the only measure of quality of life. If we think about the services Elvis was buying when he purchased his airplanes and cars, many Americans today come closer to living like Elvis than we might think.

Today firms such as NetJets make it possible for many more people to have access to travel by private plane. (NetJets offers shares as small as 1/16th, or about 50 hours of flying, according to the company’s website). For the rest of us air travel has become more convenient and cheaper since airline deregulation in 1978. One study in 1997 found that even after adjusting for changes in amenities, passengers were saving more than $19 billion per year. Average roundtrip fares have fallen by more than a third in real terms.

Of course even flying business class on a major airline is hardly the same thing as flying on Presley’s Lisa Marie, a Convair 880 that Elvis bought for $250,000 and spent $600,000 refurbishing, using the same design team that decorated Air Force One. Elvis’s plane had a bar, conference room, and bed (with seat belts); our commercial airliners do not. And undoubtedly if Elvis were alive today, he would have upgraded his plane to an even more luxurious model. But in terms of the ability to get from one place to another quickly and conveniently, today’s commercial passenger comes closer to Elvis’s lifestyle than most thought possible in 1977. Elvis might still need a private jet today to avoid the fans, but he wouldn’t need it to get where he wanted to go or ship off a new recording master to RCA from Memphis, whose airport is a hub for both Delta Airlines and Federal Express.


Similarly, Elvis’s many cars continue to set him apart from noncelebrities. But none of Elvis’s cars have a stereo equal to the one in my 2011 Subaru Outback, which synchs automatically with my Bluetooth-enabled iPhone, giving me access to more music in my car than Elvis had even back in the Jungle Room at Graceland. Moreover, my Subaru has tires, an engine, and safety features far better than were available even on Elvis’s 1973 Stutz Blackhawk, 1971 Mercedes, or 1975 Dino Ferrari. And Bluetooth isn’t the only technology Elvis could not have bought in the 1970s for any amount of money. My car has multiple airbags, a continuous variable transmission, and all-wheel drive.

Of course, Elvis wouldn’t likely be driving something as mundane as an Outback (unless his manager, Col. Tom Parker, had negotiated a contract for him to do so at a hefty fee), but even if Elvis were driving a top-of-the-line Mercedes today, the gap between his car and mine would be much smaller than the gap between his Ferrari and my parents’ 1970s Toyota Corolla. In part that is because items like cars have improved in quality, but it is also because improvements in finance have made it possible for ordinary people to have access to them. Elvis would still be able to turn up at a dealer and buy a car without a credit check; the difference is that this past summer I was able to buy my Subaru via the Internet without ever meeting the dealer and without the hours of paperwork and haggling that were a routine part of the car-buying experience as recently as the 1990s.

Everything from the selection of options to the financing was arranged by email, the web, or phone. The dealer had access to financing from investors via asset securitization of its loans; it was able to check my credit in seconds using online services; and I paid the deposit with a credit card over the phone (racking up frequent flier miles since I don’t have my own plane). Aside from a test drive, the only time a member of my family set foot on a dealer’s lot was when my daughter picked up the car.

Elvis could buy a car with a similar lack of personal effort in the 1970s because he had a staff to do things like wait in line at the bank to get a cashier’s check or cash, fill out forms, and negotiate details of the purchase. He was able to get excellent service because he was a celebrity. Today all of us have access to similar levels of service, thanks to entrepreneurs like Sam Walton, whose Sam’s Club brokered my Subaru purchase.


One of the best-known features of Graceland is Elvis’s arrangement of three televisions (there were only three networks) in several rooms. Inspired by Lyndon Johnson’s use of three TVs to monitor the three network news broadcasts simultaneously, Elvis had a more sensible reason—so he could watch multiple football games. Here our lives really shine compared to his. In the mid-1960s, console TVs cost over $5,000 in today’s dollars. When Elvis was watching football on his three color TVs, my parents had a single black-and-white television, whose screen could not have been larger than 20 inches. My grandmother, who lived with us, splurged and bought herself a 24-inch-screen console color analog television (with a remote control!), around which we gathered on Sunday evening to watch All in the Family on CBS.

Today my living room has a 60-inch digital flat-screen TV, capable of much higher resolution than anything Elvis (or my grandmother) owned but which cost considerably less than just one of Elvis’s sets. Moreover, it features technology like a “picture in picture” display that makes it unnecessary to have three side-by-side televisions if I want to monitor more than one program. Elvis had to remodel his bedroom to have two TVs positioned so he could see them from his bed. I streamed video to my iPad while lying in bed the first night after I moved into my current home without having to summon a contractor.


Another feature of Graceland is the top-of-the-line stereo presented to Elvis by RCA Records in gratitude for the benefits it reaped from his efforts. My music system sounds better than Elvis’s expensive stereo (and can play from the TV as well). Some audiophiles might disagree, since the gold standard for many is still a tube-based amplifier like Elvis had. But not only did I have a choice of sound systems, even an audiophile system would be cheaper, better, and smaller than anything in Graceland. Of course the rich still have better systems, yet the rest of us live better than they did in the 1970s. I tried unsuccessfully to find cost figures for Elvis’s system but I have no doubt that the combination of my iPhone, a networked hard drive, and a wireless music system provides me with many times the quantity of music available to even an avid collector like Elvis—with far greater convenience and at a fraction of the cost.

If we look at the more mundane parts of Graceland, the improvement in our lives is even more striking. Elvis was proud of the chandelier that hung in the foyer; lighting fixtures (aside from government-mandated CFL bulbs) are vastly superior in illumination, efficiency, and variety to what was available to him when he decorated Graceland. In the kitchen sits a massive early microwave oven; these are now compact and virtually disposable. (In 1981 a Sears microwave cost almost $500—over $1,100 in today’s dollars—but today it is just $119.) A feature worthy of comment in the original news accounts of Graceland was its marble fireplace. Granite countertops and similar features are now present even in apartments marketed to college students. If we dig into the support systems, the differences are even more dramatic. Home Depot sells furnaces more efficient and quieter than what Elvis had in the 1970s; windows today are dramatically superior in their construction and energy efficiency; and appliances such as washing machines and dryers have options unimaginable to even the wealthiest in the 1970s.

In his classic 1945 American Economic Review article, “The Use of Knowledge in Society,” F. A. Hayek termed the price system “a marvel” for its ability to improve the quality of life without any central direction. That’s just the right word. My family (along with yours) lives a quality of life most of us could hardly imagine in 1957 or 1977. It is a marvel that we have come so far so fast. Contrary to Harvard professor (and Massachusetts senate candidate) Elizabeth Warren’s recent claim that we owe a good deal of our success to government, the improvements are the results of innovations by engineers, business people, and others striving to create their own success and to find the resources to achieve their own dreams.

Today most Americans live lives that approach and in some cases exceed the material well-being available only to rich celebrities just 40 years ago. Given how much Elvis Presley loved his fans, I think that’s something he would be happy to know.

  • Andrew P. Morriss is the D. Paul Jones, Jr. & Charlene A. Jones Chairholder in Law and Professor of Business at the University of Alabama. He is coeditor (with Roger E. Meiners and Pierre Desrochers) of Silent Spring at 50: The False Crises of Rachel Carson, forthcoming from the Cato Institute.