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Just to remind everyone, the good old days are right now

Summary:
To read the pages of the, say, Guardian, is to be confronted with a list of all that is wrong with the world - there are undoubtedly things wrong with it too. But the insistence is that things are getting worse. Something that Hans Rosling insisted wasn't true and as The Guardian has just printed from him:It is absolutely true that there are many bad things in this world. The number of conflict fatalities has been falling since the second world war, but the Syrian war has reversed this trend. Terrorism too is rising. Overfishing and the deterioration of the seas are truly worrisome. The list of endangered species is getting longer. But while it is easy to be aware of all the bad things happening in the world, it’s harder to know about the good things. The silent miracle of human progress

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To read the pages of the, say, Guardian, is to be confronted with a list of all that is wrong with the world - there are undoubtedly things wrong with it too. But the insistence is that things are getting worse. Something that Hans Rosling insisted wasn't true and as The Guardian has just printed from him:

It is absolutely true that there are many bad things in this world. The number of conflict fatalities has been falling since the second world war, but the Syrian war has reversed this trend. Terrorism too is rising. Overfishing and the deterioration of the seas are truly worrisome. The list of endangered species is getting longer. But while it is easy to be aware of all the bad things happening in the world, it’s harder to know about the good things. The silent miracle of human progress is too slow and too fragmented to ever qualify as news. Over the past 20 years, the proportion of people living in extreme poverty has almost halved. But in online polls, in most countries, fewer than 10% of people knew this.

Entirely so, there are undoubtedly things wrong out there. As there are things going right. And there's a useful shorthand for the bits that are going right - those to do with economics. People everywhere are leading richer, longer, more healthy, lives. With more choices, more calories and fewer dead children.

Given that the main economic idea of the last 40 years - well, The Guardian insists it is at least - is neoliberalism, that must mean that neoliberalism is the correct economic policy to be following.

We can take this further, as Ricardo Hausman points out:

Our research has uncovered that in the developing world, there are enormous differences in productivity within countries, across their different regions. For example, in the US, the richest state, which is probably Connecticut, is about twice as rich as the poorest state, which is either Mississippi or West Virginia. The difference is a factor of two. In Mexico, the difference between Chiapas and Nuevo León is a factor of nine. Similar differences exist between the Indian states of Bihar and Goa or between the cities of Patna and Bangalore. These differences in income are mainly differences in productivity. It’s not the result of what share of the pie goes to capital and what size of the pie goes to labor. It is differences in the sizes of the pie.

So there are these enormous differences in productivity that make the productive places rich and the unproductive places poor. The poor people are not being exploited. They’re being excluded from the higher productivity activities. It’s not that the capitalists are taking a very large share of what they produce. It’s just that they produce very little in the first place.

Many of those that worry about inequality blame capitalism for it. Even Pope Francis has been framing the issue in this way. Now, let’s define capitalism the way Karl Marx did. It is a mode of production where some people own the means of production and others work as wage laborers for them. But if this is the case, capitalism hires 8 out of each 9 workers in the USA, 2 out of 3 in Nuevo Leon, 1 out of 7 in Chiapas and 1 out of 19 in India. Places where more of the labor force works for capitalist firms are richer, because capitalist firms allow for much higher productivity.

A useful shorthand for neoliberalism would be the expansion of capitalism - tempered, as we should always hope, by free markets - to those parts of the world previously unexploited by it. This being something that actually works in improving the human condition.

By any historical or global standard the good old days are right now. Something caused by that neoliberal globalisation, the spread of capitalism and markets to the parts of the world previously unsullied by them. The only puzzle we've got is why so many people are unhappy with this?

Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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