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Some assertions end up being ludicrous

Summary:
It’s a standard claim from the intellectually fashionable these days that “excessive wealth” is the major problem our society, our world, faces. Which leads to statements like this: We need to redefine what the good life is, instead of never-ending expansion, the latest iPhone, jetsetting. The planet can’t take another Jeff Bezos.Mr. Bezos has that 0 billion or whatever it is this morning as the stock markets gyrate. But that he has that much is the least important part of the story. How did he get it? According to the bank, Amazon and its peers have pushed down inflation by about 0.1 to 0.2 percent.That’s per year for a couple of decades. Certainly, we shouldn’t apply all of that to Amazon, or Bezos, but just for kicks let’s try it. That’s a 4% (without compounding) reduction in the

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It’s a standard claim from the intellectually fashionable these days that “excessive wealth” is the major problem our society, our world, faces. Which leads to statements like this:

We need to redefine what the good life is, instead of never-ending expansion, the latest iPhone, jetsetting. The planet can’t take another Jeff Bezos.

Mr. Bezos has that $190 billion or whatever it is this morning as the stock markets gyrate. But that he has that much is the least important part of the story. How did he get it?

According to the bank, Amazon and its peers have pushed down inflation by about 0.1 to 0.2 percent.

That’s per year for a couple of decades. Certainly, we shouldn’t apply all of that to Amazon, or Bezos, but just for kicks let’s try it. That’s a 4% (without compounding) reduction in the price level. That’s something we consumers gain each and every year. Limit ourselves just to the US economy of $20 trillion - and yes, this is the inflation level for the whole economy, it’s not just on whatever tchotchke Amazon sells - and that’s $800 billion a year. We get $800 a year collectively, he gets $190 just the once. If we capitalise our benefit as that Bezos pile is capitalised then we’re getting $16 to $24 trillion (roughly, you understand) over time.

We’re on the right end of the greatest bargain in all history that is. More formal proof is in this from William Nordhaus.

That things can be provided more cheaply means that we’ve had an increase in efficiency. Which is that we’re using fewer resources to reach a particular standard of living - that’s what an increase in efficiency is. Quite why the planet won’t survive increasing efficiency is something that intellectual fashion doesn’t seem to address. The idea that Gaia will suffer from our using fewer resources seems more than a little odd.

Actually, it’s ludicrous. But then that’s the thing with fashion, the results of the usual groupthink often are ludicrous as catwalks and Guardian columns so often show.

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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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