Category Archives: modernity

Book Review: Open: The Story of Human Progress by Johan Norberg

On March 25, 2021 at noon ET, CEI is hosting a double book forum featuring Johan Norberg, the 2019 winner of CEI’s Julian L. Simon Memorial Award, and Patrick Moore, a Greenpeace cofounder and author of Fake Invisible Catastrophes and Threats of Doom. Register here, where video of the event will also be viewable afterwards.

Liberalism—in the correct sense of the word—needs fresh voices. The ideological conversation is different than it was a decade ago, and many market-liberal thinkers have not kept pace. Today’s debate is over whether society should be open or closed, not which side of the Iron Curtain was better.

This is where the Swedish economist Johan Norberg performs a valuable service. He is fighting the current battle, not the last one. His newest book, Open: The Story of Human Progress, is a superb defense of the pro-freedom side of the debate. And he defends it against the nationalists and populists who are attacking it right now.

People over a certain age on the political right tend to still use the word “socialism,” but often as a catch-all term for things they dislike. This is different from the word’s commonly understood meaning of state ownership of the means of production, belief in dialectical materialism, teleological stages of history, or any of the other things socialists actually believe in.

People under a certain age on the political left often say they favor socialism. But they, too, have given the word a new and different meaning. They typically define socialism as a more-or-less market economy with a large welfare state, as in the Nordic countries. They are also often careful to add the qualifier “democratic” as an implicit nod to what socialism’s original meaning entails.

When people give the same word different meanings, confusion reigns. When people today lob the s-bomb, they are often talking  at each other, not to each other. The real debate is elsewhere.

This tactic is great for getting people riled up, though. The heat-without-light approach has advanced the careers of people like Fox News host Tucker Carlson and former President Trump on the right, and Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez on the left. But it makes substantive debate difficult.

Openness and liberal institutions have generated more wealth for more people than any other socioeconomic system in history. But they are also unpopular. Norberg has some ideas on why, drawing on a mix of history, economics, and psychology. He sums up his thesis on page 6:

As I will argue, the reason that the Enlightenment and the Industrial Revolution started in Western Europe was that this region of the world happened to be the most open, partly just out of luck. It has been repeated in every place that has gone through similar institutional changes. It is not the triumph of the West, it is the triumph of openness.

First, the history. The last two centuries have seen a mass enrichment unlike anything in human history. As economic historian Deirdre McCloskey has pointed out, people today are 30 times wealthier than our ancestors were in about 1800. Not 30 percent more, but 30-fold. As President Biden once said about a different issue, this is a big deal. Since the Great Enrichment began, life expectancies have doubled. Infant mortality is down by more than 90 percent. Famines today have political causes, not natural ones. Violence, both intentional and accidental, are sharply down across the board. A few years ago, the percentage of world population living in absolute poverty—$1.90 per day or less—fell below 10 percent for the first time ever. Almost every long-run trend is showing improvement.

This historical process is as important as the taming of fire or the invention of the wheel. This is what Norberg defends. And it needs defending, because the openness and liberal values that made it all possible are unpopular. Psychology helps to explain why.

People respond to threats more sharply than to good news. In lab experiments, people feel the sting of loss about twice as sharply as a gain of similar amount. Psychologists call this loss aversion. We evolved this trait because mother nature is a superb economist. People have only so much attention to give to things, so we have evolved ways to economize on it. When things are going well, we can leave them alone, and save our scarce attention for dealing with threats. We are hardwired to pay more attention to threats, because long ago there was a survival advantage in doing so.

This tendency is not unique to humans, and long predates us. In a way, the modern life we all enjoy runs counter to hundreds of millions of years of natural selection processes. No wonder liberals have an uphill battle!

In the last two centuries or so since the Great Enrichment began, threats have become progressively less menacing. People don’t have to worry nearly as much about famine, disease, or violence. But that same impulse still exists. Now it gets channeled differently. Socialists—actual ones—viewed capitalists as threats. Populists, from William Jennings Bryan to Josh Hawley, frame various elites as threats. Nationalists view immigrants and foreigners as threats.

Who and what people consider to be threats changes with the times. But that core psychological mechanism remains constant. Some kind of outside Other always poses a threat to the in-group, which must always be defended. This in-group can be a family, tribe, race, nation, political party, or just about anything else. People can also have multiple in-groups at the same time, and can shift seamlessly between them. A Republican and a Democrat who would be enemies in one setting might become fast friends at a baseball game if they like the same team, then go back to being enemies when the game is over.

The key point is that the in-group/out-group dynamic is in everybody’s DNA, and is where the urge to close society comes from. Norberg here draws on the political psychologist Karen Stenner’s 2005 book The Authoritarian Dynamic, which argues that about a third of people have an underlying authoritarian impulse in them—but it doesn’t express itself unless people feel threatened. During normal times, they are just as open and amiable as anyone else. But when they feel threatened, “they react explosively,” Norberg writes on p. 343. “They become intolerant of diversity and dissent and willing to restore unity by government control, even if it wrecks rule of law and free speech.”

Liberal institutions are powerful enough to double lifespans and increase prosperity 30-fold in a handful of generations. At the same time, they are vulnerable to attacks like this.

Prior liberal flowerings got started in societies as diverse as Ancient Greece and Song dynasty China. But none of them lasted. The general intellectual climate wasn’t open enough to openness. Plato was executed essentially for nonconformity. After Mongol invaders ended the Song dynasty, the succeeding Ming dynasty responded to the threat by destroying the world’s most advanced fleet of oceangoing ships and banning nearly all foreign contact.

That vulnerability is why the open society will always need defending, especially as its attackers change tactics every generation or two. Norberg’s defense is perfectly suited for this generation’s emerging threats. Populist and nationalist governments have come to power in recent years in countries such as Brazil, Mexico, Hungary, and elsewhere. President Trump’s trade war, immigration restrictions, race-baiting were slowing the longest economic expansion in U.S. history and causing cultural divisions even before COVID-19 hit.

Even after he cost his party the House, the Senate, and the presidency, the Republican party is continuing along a national populist trajectory. The progressive wing of the Democratic party is pushing similar policies in different packaging, on issues from international trade to technology policy. The United Kingdom’s Brexit debate, which should have been about escaping the European Union’s burdensome regulatory, agricultural, and tax policies, was instead hijacked by ugly nationalist impulses, and became divisive for all the wrong reasons. Strongman governments and nationalist political parties are springing up in places that should know better, such as Eastern Europe, which bore the brunt of both fascism and communism in the 20th century.

Norberg writes clearly and persuasively, with passion, and without anger. It is an impressive performance, and a joy to read. He has only one notable slip in 384 pages, and that is his support for a carbon tax on pages 330-331. Ironically, this comes in a section about the knowledge problem in economics. A centralized body such as Congress is unlikely to have the on-the-ground knowledge it needs to put an accurate price on carbon emissions.

Perhaps more significantly, the carbon tax suffers from public choice problems—which basically means that politicians tend to behave like politicians. A cardinal rule of politics is that policies are made and enforced by the government we have, not the government we want. Even if Congress did overcome the knowledge problem, it is unlikely that people like Nancy Pelosi and Mitch McConnell, or whoever succeeds them down the road, would craft a carbon tax on the merits. For Norberg, a carbon tax is “supposed to be an incentive, not a source of revenue.” This is surely not how a carbon tax would work under a real-world government.

That quibble aside, Open is one of the best books of its kind to come out in years. It is the right defense of the right values at the right time.

Norberg is not the only voice in favor of openness. Recent works by economists Virgil Storr and Ginni Choi, psychologist Joseph Henrich, and experimental economist Bart Wilson are other recent contributions. Matt RidleySteven Pinker, and Deirdre McCloskey have all been flying the flag for openness, tolerance, and dynamism for years. But just as Julian Simon was in his day, these voices of reason are too often drowned out by a chorus of doomsayers.

Markets are inherently dynamic and ever changing. No one is in charge of them, and no one directs the process. Markets work best when people are open, tolerant, and cooperative. People need to get along with people who look different, speak differently, and may live far away. It takes trusting strangers. That not natural to the human brain, which evolved to fit a hunter-gatherer world. But open markets have gotten us this far. If we let them, they can take us much farther. Whether we do or not will be this generation’s defining debate.

Book Review: Jennifer Traig – Act Natural: A Cultural History of Misadventures in Parenting

Jennifer Traig – Act Natural: A Cultural History of Misadventures in Parenting

Hilarious, and recommended by Let Grow founder and Free-Range Kids author Lenore Skenazy. Traig performs two valuable services for parents. One, she reminds them that everyone makes mistakes, and that’s ok. Do your best, use common sense, and your kids will be fine. Perfection doesn’t exist. Provided that you are loving, caring, and supportive, there is no need to stress yourself out over falling short of impossible standards.

The second service is historical. Our mistakes are nothing compared to the mistakes people used to make. Before freaking out about whatever threat to children is headlining the evening news tonight, it helps to have some context. Children today are safer, healthier, better fed, and better-parented than at any other time in history. Media freak-outs help ratings, but hurt parents and kids. Traig looks at how previous generations treated their kids, and is thankful that today’s kids have it better in almost every way. Some of our parents and grandparents’ shortcomings are hilarious; others are more tragic.

Doctors performed quack remedies that were as likely to kill as to cure. School was even more drudgerous than it is now, and physical abuse was common. Parenting “experts” clearly had no idea what they were talking about, and many advocated what today would be considered abuse. Playground equipment was hazardous. Children’s literature, such as the Brothers Grimm, was often nightmare-inducing. Crib accidents used to be multiples more common due to poor design. Once kids were out of the crib, child labor was routine until the Industrial Revolution raised adult earnings enough for them to afford to put kids in schools instead of fields or factories.

Traig makes these serious points with laugh-out-loud humor and a conversational style. This book is excellent for nervous parents, nervous parents-to-be, and anyone else worried about what the world is coming to. As long as we put a little effort into it and stop freaking out about everything, our children and grandchildren will have better childhoods and better adult lives than we did, just as our lives have been healthier and wealthier than those of the generations before us.

Book Review: Erik Brynjolfsson and Andrew McAfee – The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies

Erik Brynjolfsson and Andrew McAfee – The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies (New York: W.W. Norton, 2014)

This book from two MIT professors is part big-picture history, and art techno-optimism. McAfee is also the author of the excellent 2020 book More from Less, which is better-argued from a public policy perspective.

The opening chapter sets the historical stage. Living standards were poor and stagnant for nearly all of human history, from our birth as a species until about 1750 or so. If you put human well-being on a graph, it runs almost perfectly flat for thousands and thousands of years. Then it spikes sharply upwards starting around 1750-1800, like a hockey stick on its side. This giant wealth explosion is still happening today, and the authors believe it will continue for some time to come. This is one of the biggest changes in human history.

What caused it? Brynjolfsson and McAfee think it was technology. More specifically, it was the steam engine. Even more specifically, it was James Watt’s iteration of the steam engine. Steam power existed as early as ancient Rome, but it was mostly used for amusement purposes, and not industry. That changed in Watt’s lifetime. This was the start of Bynjolfsson and McAfee’s First Machine Age.

The Second Machine Age is the computer revolution. The First Machine Age revolutionized physical power. The Second Machine Age is revolutionizing mental power. Just as Watt’s steam engine took time to influence manufacturing, technological development, government, and culture, so too is the Second Machine Age. It is far enough along where they argue its fundamental difference from the First Machine Age is clear. But it is also early enough where its impact is only beginning to be felt. The future has almost limitless potential—and some tradeoffs.

The larger arc they draw is the right shape, though I don’t know that their need for two separate Machine Ages is much more than a useful gimmick for talking about technology. I would also submit that the true cause of both revolutions goes a level deeper than just technology. Yes, steam engines and computers are necessary for the two machine ages. Necessary, but not sufficient.

They need another ingredient in the mix: culture. Larger cultural values are difficult to quantify, which is why economists and many other social scientists do not use them. They are still significant, even if they are immune to regression analysis and other quantification. Statistically significant? No. Real-world significant? Very.

Culture shifted in the centuries leading up to Watt’s generation. People were gradually becoming a little more open to change, progress, and improvement. It showed in literature, trade patterns, philosophy, and a new prestige for science and its discoverers. That is why a technology that was already around now began to be used more differently—people allowed it, approved of it, and were willing to countenance large fortunes being made from it.

After setting up their two-machine-ages framework, Brynjolfsson and McAfee go on a tour of new and emerging technologies to see where the Second Machine Age might take us. They take a ride in one of Google’s self-driving cars, among other highlights, and draw encouraging pictures of some of the things new technologies could do for people over the next few decades.

One area where they fall short is their discussion of inequality. They are so focused on the mathematical ratio of the differences between rich and poor peoples’ incomes, that they forget to ask how people at the bottom are actually doing. They also focus almost solely on wage income, which is a significant mistake. This leaves out non-wage income such as employer-sponsored insurance, tuition assistance, free meals, company cars, and other perks that do not show up in income data.

More to the point for a book about technology, Brynjolfsson and McAfee should have asked a question similar to one Don Boudreaux likes to ask: would you rather have 1970-quality medical care at 1970 prices, or today’s health care at today’s prices?

Very few people would rather have 1970’s health care, even at its lower price. That means people view themselves as better off with today’s options. Most people would similarly answer related questions about televisions, computers, cars, appliances, and many other products that both rich and poor people consume.

In fact, society today has substantial consumption equality. Most low-income households have cars that drive at the same speeds on the same roads as wealthy people. They watch the same television shows and have similar Internet connections. More tellingly, rich people are not substantially taller or longer-lived than poor people. In the olden days, one could tell nobles and peasants apart at a glance by their height. Children of nobility got enough to eat, while peasant children were often so malnourished that their growth stunted. There were also substantial differences in infant mortality and life expectancy.

While the very wealthy have orders of magnitude more wealth than ordinary people do, they don’t consume very much of it. Nor do they keep it in a Scrooge McDuck-like vault. They invest it, in an unexpected type of income redistribution. When it’s invested, borrowers use that money to buy homes, go to college, and start businesses. The wealth doesn’t just sit there, people make use of it. It is a subjective question how much of this type of wealth is the “right” amount. But this positive use of wealth is something inequality scholars need to account for, and rarely do. In fact, invested wealth is where most of the capital that funds the amazing technologies Brynjolfsson and McAfee discuss in this book comes from.

They make another lapse in quoting a professional trade association for civil engineers in calling for more infrastructure spending. Of course civil engineers want more infrastructure spending, they have a vested interest in it! This is basic public choice theory. While they briefly acknowledge this conflict of interest, they also do not acknowledge the seriousness of the point, or look at data from less self-interested sources.

Their promotion of a Universal Basic Income (UBI) is similarly idealistic. This model, essentially a straight cash grant, is an objectively better system of poverty relief than the current welfare state. A UBI is easier to administer and more flexible for the recipients. A UBI also makes it more difficult for nanny statists to tell the poor what they shall eat, what things they may and may not buy, what types of health care they may receive, or where they shall educate their kids.

The trouble is politics. Again, a little public choice theory would go a long way in this discussion. Replacing the current welfare state with a UBI would be a fantastic tradeoff, both for the poor and for taxpayers. But the way politics works in practice, this would not happen. A UBI would be negotiated in a Congress led by people like Nancy Pelosi and Mitch McConnell, or whoever succeeds them in a few years. Real-world politicians are unlikely to enact a well-functioning UBI, nor will their constituents let them. Public sector unions whose members administer the current system will block any reform they possibly can.

Tis means any politically-possible UBI would be added on top of the current system, preserving the current system’s flaws and minimizing a UBI’s advantages. Unless this problem is addressed, a UBI risks causing more harm than benefit.

Brynjolfsson and McAfee are consistently a little too idealistic. Some of the technologies they explore in this 2014 book turned out to be flops, and others are still materializing. Similarly, they assume that their political reforms will actually work as they intend them to.

They are certainly right about the larger arc of progress and prosperity. And though I take their technological hyper-optimism with a grain of salt, it is also inspiring. Books like this one and by other thinkers such as Kevin Kelly give me confidence that my daughter’s life will be richer, longer, healthier, and frankly, cooler than mine. This is a source of happiness for me, and gives me inspiration to continue my work on improving economic policy and defending liberalism against populists who would tear it down for no good reason.

Best Books of 2020: Joseph Henrich – The WEIRDest People in the World: How the West Became Psychologically Peculiar and Particularly Prosperous (New York: Farrar, Straus, and Giroux, 2020)

It’s early, but The WEIRDest People in the World: How the West Became Psychologically Peculiar and Particularly Prosperous by Joseph Henrich will likely be one of the new decade’s most influential books. Henrich complements work by Joshua GreeneRichard WranghamJonathan HaidtSteven PinkerMichael Shermer, and others on the psychological underpinnings of modern liberalism—liberalism in the more-or-less original sense of the word.

Henrich’s book has two main arguments. One is historical: The Catholic church, completely unintentionally, set off a social chain reaction that created modernity. The second is psychological: People in modern societies are psychologically distinct than people in traditional kin-based societies.

He uses the acronym WEIRD for Western, Educated, Industrialized, Rich, and Democratic, to describe the unusual people in modern market-liberal societies. If you are reading this book review, then you are probably WEIRD, and so is nearly everyone you know. But we WEIRD people are the outliers in human history. Outside of Europe, East Asia, and North America, there are very few of us.

Most human societies are built on kin-based structures. This was true during our hunter-gatherer past, which was about 190,000 years of our 200,000-year history—95 percent of our species’ time on Earth. Societies remained kin-based through the agricultural revolution, and through the birth of cities about 6,000 years ago. And it is still true today in most countries. Despite occasional flowerings, there were no enduring WEIRD societies in human history until about two centuries ago. This is maybe one tenth of one percent of human existence, and even then, most societies remain kin-based. Again, it is WEIRD people who are unusual.

What is a kin-based society? In these, business partnerships, social networks, and marriages are confined to networks that rarely stray outside the extended family or clan. People tend to be wary of non-kin, and have a strong in-group-vs.-out-group worldview. People tend to look out for their clan’s collective interest over their individual interest. In kin-based societies, nepotism isn’t frowned upon; it’s the norm. WEIRD Americans today look askance when a president appoints inexperienced family members to be senior advisers. But in most other societies, this would have been acceptable, even normal behavior.

By contrast, WEIRD people are more individualistic and more trusting of outsiders. Kin-based families often arrange marriages for their children. WEIRD people usually marry for love. Kin-based people are expected to enter the family business. This is why so many of us have occupation-based surnames, such as Smith, Baker, or Fisher. WEIRD people usually prefer to choose their own line of work, which is one reason why today’s Smiths, Bakers, and Fishers rarely practice those occupations.

Kin-based people are reluctant to do business with strangers and foreigners. WEIRD people are more open to trade and more trusting of potential business partners they have never met. Nobody is purely meritocratic, but WEIRD people are closer to that ideal than most people.

So now that we know the difference between most people and WEIRD people, what is Henrich’s historical argument about the Catholic church accidentally making today’s WEIRD-ness possible?

The Catholic church blew up traditional kin networks through what Henrich calls its unofficial “Marriage and Family Program (MFP).” In short, the Church prohibited cousin marriages. The incest taboo is a human universal. But its boundaries vary from place to place. The church decided to push them progressively further out over a period of centuries. In many places, it eventually prohibited marriages closer than second and third cousins. In a few places it briefly went as far as eighth cousins.

This was a bigger deal than it sounds. Back in, say, the 12th century, people lived isolated lives. Few people lived in cities. Many people lived their entire lives within a 30-mile radius. They met few, if any, people outside of their extended families. And the wanderers they did meet were often beggars, vagrants, or outlaws. The Church’s MFP forced these isolated people to look outside their villages and kin groups for marriage partners. This forced openness, in the long run, ended up wiring people’s brains differently.

Young people are impressionable. When they are of marriageable age and are forced to meet and interact with strangers, and travel among them, traditional closed-kin psychological barriers gradually break down. They are gradually replaced with growing degrees of WEIRDness. It is a long, gradual process with many degrees. But over centuries, the effects add up.

None of the changes Henrich describes are genetic. None of them are racial, and none of them are peculiar to Europe. The conditions that make individuals WEIRD are cultural, intellectual, and psychological.

Using cousin marriage rates as a stand-in for how strong the Church’s Marriage and Family Program operated in different regions, along with historical records, Henrich finds that the MFP was the single biggest cause of everything from per capita GDP to interest rates to murder rates. Interestingly, regional cousin marriage rates closely track religious divisions and regional church influences. Henrich himself was skeptical about the MFP’s cultural influence, so he checked his results every way he could.

So, while openness is the real engine of WEIRDness, in Europe’s case, Church doctrine was what drove the process of opening up.

The differences between kin-based and WEIRD people show up in psychological tests. The Church’s MFP turns out to have changed people’s personalities and psychological profiles. In my recent review of Virgil Storr and Ginny Choi’s excellent Do Markets Corrupt Our Morals?, I noted their finding that people from market societies play decision-making games differently than do people in non-market societies. Henrich argues that this is because they are psychologically different.

From birth, WEIRD people from market societies have been more exposed to outsiders and more likely to trust them. No wonder they tend to play lab games that way. They tend to be more trusting of other players and more willing to use long-term strategies. People from kin-based societies are more likely to do the equivalent of a dine-and-dash from a restaurant. If the other player is not from their in-group, they feel fewer compunctions about cheating that other player.

Kin-based and WEIRD people even assign blame differently. Most WEIRD people see classroom teachers’ disciplinary tactic of punishing an entire class for one student’s offense to be morally wrong. Kin-based people see this as normal, and are fine with it. They think more in terms of collective responsibility than individual responsibility. In fact, criminal justice systems in many kin-based societies punish whole families for one member’s crime.

There is a reason for this. In most human societies, life was precarious. One bad harvest could mean starvation. Very strong conformity norms were a survival advantage. Collective punishment helps to reinforce conformity norms. Maybe someone does have a new idea for planting a crop differently. But if it fails, the stakes are life and death. It’s probably not worth it. Better to make sure that everyone sticks with what he or she knows works.

When most people’s only experience with foreigners is with either castoffs or invading armies, they probably aren’t going to trust them. They’d probably return the favor when possible. Unlike trade, theft and war are zero-sum interactions. When these are someone’s sole experience with out-groups, they are less likely to trade with foreigners and realize the benefits of division of labor. Safer to do it all yourself.

Henrich has written a provocative book that builds on an already robust literature. Despite its deep historical and psychological content, The WEIRDest People in the World is also highly relevant to modern public policy. The regulations and legislation that groups like CEI deal with on a daily basis do not come from a vacuum. They come from longstanding political institutions. And these system-level institutions in turn come from culture. All three of those levels matter. A reformer who works on only one of them will fail. Henrich has come up with a plausible framework to explain how they interact over the long run, and how they can shift. Where people are relatively WEIRD, people will build relatively market-oriented political institutions—and eventually, policies. Where they are kin-based, they probably won’t.

Without the Church’s unofficial Marriage and Family Plan, European culture likely would have remained insular and kin-based. That tendency still exists, and is expressing itself in the European Union’s trending towards becoming a protectionist trading bloc. Reformers need to push back and remind people that WEIRD-style openness has massive benefits, especially for the poor.

What about the rest of the world? Fortunately, the Church’s MFP is not the one and only way for people to become psychologically WEIRD. Ideas can be imported and exported, same as goods and services. America was a relatively WEIRD society from the start, as was Australia. The Asian tigers such as Japan, Korea, Singapore, and Hong Kong, saw the economic success of WEIRD countries, and followed their example. China is at a weird midway point psychologically, and its institutions are still extractive and kin-based by WEIRD standards. This may limit China’s future growth as a global power.

The point is that setting a good example can do a lot more good than people think. This puts today’s nationalists and economic protectionists in an awkward position. They are not the future. They are throwbacks to an impoverished, unhappy past.

The post-1800 Great Enrichment that billions of people are enjoying today has deep and distant causes operating at multiple levels. Henrich’s thesis of WEIRD psychology, cultural openness, and economic prosperity will have a major impact on future work in geopolitics, economic development, political polling, immigration, and free trade for a long time to come.

It’s Good to Think Long-Term

From Kindle location 710 of Adam Thierer’s excellent 2020 book Evasive Entrepreneurs and the Future of Governance: How Innovation Improves Economies and Governments:

If the primary indictment of technological innovation is that it has inundated us with too much information or too many options, those are good problems compared with the more serious problems our ancestors faced.

You can read about some of those problems in Fernand Braudel’s The Structures of Everyday Life or William Manchester’s evocatively titled A World Lit Only by Fire.  Today’s political debates would improve if more people had that larger historical arc in the back of their minds.

Andrew McAfee – More from Less: The Surprising Story of How We Learned to Prosper Using Fewer Resources—and What Happens Next

Andrew McAfee – More from Less: The Surprising Story of How We Learned to Prosper Using Fewer Resources—and What Happens Next

This would be good for an undergraduate economics course. McAfee’s thesis captures the core insights of economic growth and what causes it. He also makes the true but unpopular case that prosperity results in a cleaner environment. Poverty pollutes. In wealthy countries, people can afford to care about environmental quality, and also develop more efficient production processes that cause less harm in the first place. McAfee never uses the term, but economists call this phenomenon the environmental Kuznets curve. Basically, pollution and other harms increase until a country reaches roughly $4,500-$5,000 of per capital GDP. At that level of wealth, people don’t have to worry as much about their next meal will come from, or basics such as sturdy shelter and tolerable sanitation. Children can go to school instead of working on the farm. With those needs mostly being met, people then become interested in next-level wants, which include a clean environment.

McAfee writes a simple, direct style that reads a little bit like an introductory textbook. He also doesn’t go into the nitty-gritty the way similar works by authors like Hans Rosling, Matt Ridley, and others do. This isn’t a bad thing; he’s serving a different niche than they are.

He is quite direct in stating his belief that free markets are the reason most of the world are now on the right side of the environmental Kuznets curve, and that markets are why he is confident enough that improvements will continue. So confident that he is willing to bet his own money that numerous indicators will improve—see his website for more, and to bet against him if you wish. He is willing to wager up to $100,000 of his own money.