Deirdre McCloskey’s Great Fact is the leaps and bounds that human well-being has made over the last 200 years. The improvement is a factor of at least 16 in monetary terms, and as much as 100-fold when accounting for the improved quality of goods. Think of the difference between a CD and an iPod. Not 16 or 100 percent; 16 or 100-fold. That’s huge.
The improvement is so huge that she believes the Great Fact is the most important event in human history since the Agricultural Revolution asserted itself around 10,000 years ago. And the best news about the Great Fact should bring cheer to anyone who holds a place in their heart for the poor:
In statistics and in substance the very poorest have benefitted the most. Robert Fogel, a careful student of such matters, notes that “the average real income of the bottom fifth of the [American] population has multiplied by some twentyfold since 1890, several times more than the gain realized by the rest of the population.” The bottom 10 percent have moved from undernutrition to overnutrition, and from crowded slum housing to uncrowded slum housing, and from broken-down buses to broken-down automobiles.
Deirdre McCloskey, Bourgeouis Dignity, p. 72.
There’s still a ways to go, obviously. So let’s keep it going. But anyone who denies the significance of the massive gains already made contributes nothing towards the noble cause of eradicating global poverty, and in fact poisons the project.
This quote from friend-of-CEI Matt Ridley is too good not to share. Something to be thankful for on Thanksgiving:
Ask how much artificial light you can earn with an hour of work at the average wage. The amount has increased from 24 lumen-hours in 1750 BC (sesame oil lamp) to 186 in 1800 (tallow candle) to 4,400 in 1880 (kerosene lamp) to 531,000 in 1950 (incandescent light bulb) to 8.4 million lumen-hours today (compact fluorescent bulb). Put it another way, an hour of work today earns you 300 days’ worth of reading light; an hour of work in 1800 earned you ten minutes of reading light.
Matt Ridley, The Rational Optimist, p. 20.
A noble sentiment:
“If the history of civilization has any lesson to teach it is this: there is one supreme condition of mental and moral progress which it is completely within the power of man himself to secure, and that is perfect liberty of thought and discussion. The establishment of this liberty may be considered the most valuable achievement of modern civilization, and as a condition of social progress it should be deemed fundamental.”
-J.B. Bury, A History of Freedom of Thought, p. 182.
I forget who I’m paraphrasing here, but the two iron laws of modernity are 1) things are getting better, and 2) people think they’re getting worse. The short video at the bottom of this post is one way to prove the first law to victims of the second law. It’s a rough cut adapted from a recent talk Don Boudreaux gave; I eagerly await the full version.
When I took macroeconomics in graduate school, the professor circulated a Sears catalog from 1900 or so around the classroom. Most of the prices were given in cents, not dollars. Now imagine that you could buy anything you wanted from that catalog today at those low prices. They’re still too expensive. Take these vacuum cleaners pictured below:
$12.50 for a vacuum cleaner? What a deal! And yet, given the choice, I would not buy it. Too expensive. I wouldn’t even be willing to pay $5.00 for it. Heck, I wouldn’t even want it for free.
Why is even a price of zero too expensive for that vacuum? Because it doesn’t even use electricity. It’s manually powered. No thanks. I’m better off with the $90 vacuum I bought a few years ago.
Of course, I’ve been ignoring inflation. As a useful public service, the Minneapolis Fed has an inflation calculator right on its homepage. It only goes back to 1913, and our vacuum is a 1909. But that’s close enough for the point I’m making.
If that vacuum cost $12.50 in 1913, it would cost $285.17 in 2011. This manually powered vacuum, that I wouldn’t pay a dime for, is three times as expensive in real terms as my electric vacuum.
Things are better now. Modernity is a blessing. The first law holds. Hopefully the second law won’t prove quite so rigid.
Click here if the embedded video below doesn’t work. It’s well worth 1:26 of your time to watch.
Have a listen here.
Human Achievement Hour founder Michelle Minton talks about the annual celebration of human creativity and innovation that happens at the same time every year as Earth Hour. Ecology and economy are quite compatible. One definition of progress, after all, is doing more with less. When people are left free to achieve and innovate, that is exactly what happens, to the environment’s benefit — and mankind’s.
Posted in CEI Podcast, Technology, The New Religion
Tagged accomplishment, achievement, Earth Hour, ecology, economy, environment, environmentalism, Human Achievement Hour, innovation, michelle minton, optimism, progress
Vice President Joe Biden recently said that every great idea of the last two-plus centuries came from government. My colleague Alex Schibuola and I rebut him over at The Daily Caller using Adam Smith’s book The Theory of Moral Sentiments as our weapon of choice. Biden, it turns out, is an almost perfect example of what Adam Smith described as the “man of system.” This is not a good thing.
As Smith put it:
The man of system … is often so enamored with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it … He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board.
The problem, of course, is that human beings are not chess pieces. They have their own wants and desires. They move on their own. The man of system does not take this into account. This is why his plans fail time after time, even if he has the best of intentions.
Read our whole article here.
For those of you interested in learning more about Adam Smith, I couldn’t recommend him more highly. Don’t be scared off by his 18th-century prose style. Sit down with either of his books for less than an hour and you’ll develop an ear for it.
I don’t agree with everything Smith said; he invented the labor theory of value. But he was a keen observer of human nature. He was also a kindly soul, who wanted man to be free, happy, and prosperous. The overarching theme of his thought is mankind as social creature. Our social instincts color how we form our notions of morality (the impartial spectator theory), and explain why economies function the way they do (peaceful exchange, as opposed to simple theft).
The Theory of Moral Sentiments is available for free at the Online Library of Economics and Liberty. You can also get a hard copy or a Kindle edition from Amazon.
For help wading through and digesting Smith’s arguments, I recommend Russ Roberts and Dan Klein’s six-part podcast series about the book, and D. D. Raphael’s short and readable The Impartial Spectator: Adam Smith’s Moral Philosophy.
Other quality secondary sources on Smith include E.G. West’s short-yet-thorough biography, and P.J. O’Rourke’s On the Wealth of Nations, which pairs Smith’s economic theories with O’Rourke’s mordant wit.
Posted in Economics, Great Thinkers, Political Animals, Publications
Tagged adam smith, amazon, chess analogies, e.g. west, great ideas, Great Thinkers, joe biden, liberty fund, man of system, p.j. o'rourke, progress, theory of moral sentiments
My colleague Ryan Radia and I recently sent this letter to The New York Times:
Editor, New York Times:
Catherine Rampell’s September 7 article, “Once a Dynamo, the Tech Sector Is Slow to Hire,” mourns the recent decline in U.S. data processing jobs. She blames much of the decline on the automation of previously tedious tasks.
May we suggest one way to get those jobs back: No more automation. Ban the use of computers for data processing. Imagine how much information flows through today’s global economy in an average day. Computers handle most of the load. That costs millions of jobs.
The effects would reverberate far beyond the tech sector. The paper, pen, and pencil industries would also boom.
Companies are dead-set on doing more with less. True, that creates more jobs in the long run by freeing up resources — and employees — for new ventures. But if only they would consider doing less with more, they could create more data processing jobs.
Ryan Young and Ryan Radia
Competitive Enterprise Institute
Posted in Business Cycles, Economics, The Market Process
Tagged basic economics, catherine rampell, creative destruction, data processing, econ 101, Economics, economics 101, employment, high tech jobs, jobs, new york times, outsourcing, progress