A February 17, 2017, article by Rod Dreher on the American Conservative website quotes economists Nicholas Eberstadt and Tyler Cowen at length. Eberstadt says that the “Great American Escalator” broke down “very badly” in the 21st century.
He blames the 2008 recession, saying the American economy lost a decade. He predicts growth will be minor for the foreseeable future, and “for every [documented] unemployed American man between the ages of 25 and 55 years of age, there are another three who are neither working nor looking for work.”
Cowen, planning for the mass automation of jobs, claims that current lack of wage growth echoes the dislocation of agricultural workers in the 19th and early 20th centuries. He blames the tragedies of Communist and fascist countries on that dislocation, and says of Karl Marx, “He failed to see the long-run ability of capitalism to raise living standards significantly, but he understood and vividly described the transition costs and the economic volatility...I like to think we will be more intellectually moderate this time around”—but he isn’t reassured by the world’s current authoritarian trends.
What it means is that each of us thinks that he or she is stuck, but the fact is the world is getting richer and becoming a more comfortable place to live.
Science writer Matt Ridley uses the cost of artificial light as an example. In 1750 BC, an hour of work would let you burn a sesame oil lamp for 24 lumen hours. In 1800, it would buy you 186 lumen hours using tallow candles. By 2010 compact fluorescents provide 8.4 million lumen hours. That’s half a second of work for an hour of reading light.
Meanwhile, according to Ridley, murder was ten times as frequent in England before the Industrial Revolution as it is now. In America, you’re more likely to die by your own hand than by another’s. According to the FBI, in 2010, the murder rate was 4.8 per 100, 000, while the Suicide Prevention Resources Center says the suicide rate was a little below 25 per 100K.
Fifty years ago, the developed world was eating better than anyone had before. Now, according to the World Bank, extreme poverty worldwide—and it is extreme, below 1.90 international dollars per day—fell from about 34 percent to between 10 and 11 percent from 1987 to 2013. East Asia fell from about 58 percent to under five percent. Even Sub-Saharan Africa fell to just over 40 percent. The International Food Policy Research Institute reported decreases in hunger in all but a few locations.
Child labor fell 40 percent between 2000 and 2016. Life expectancy is rising. Child and maternal mortality are down. More than half the world lives in democratic countries. Years of education is up, as is literacy, with a worldwide average above 80 percent.
This is all good, but here in the United States, wages are stagnant and employers increasingly see workers as contractors. The ubiquity of self-checkout lines shows the trend of business choosing capital spending over labor. Medical insurance is a less frequent benefit, while medical spending has climbed to 18 percent of GDP.
We may have reached the limit of how many transistors we can fit on a chip, but Moore’s Law has given individuals more computing power for a few hundred dollars than could be had for any price at the turn of the century. This is powerfully deflationary, and any industry that uses information technology piggybacks on Moore’s Law, improving benefit for price exponentially.
One example is energy. Solar and wind are cheaper, according to Business Insider, than oil or gas. The hangup is that sunlight and wind are unevenly distributed. We need more and better batteries.
The Tesla/Panasonic Gigafactory 1, near Clark, Nevada, is producing batteries at 20 GwH per year, with three lines opening soon raising production to 35 GwH, with ultimate production of 105 GwH.
In May, Elon Musk announced that production for the previous year had matched all prior world production. This is the largest, but not the only facility of its kind. That kind of production should match the world’s need.
Most of us aren’t aware of how rich we are. Maybe that’s a distribution problem. Maybe it’s because we hear about tragedies as soon as they happen. Maybe it’s because we’re biased to prefer negative news. In any case, economic insecurity is a straw man.