The age we live in is disconnected from the past. That is a good thing. That, in fact, is the Miracle. But there is a downside. When you amputate historical memory, you end up taking the present for granted. If you were born and raised in an oasis, you would be forgiven for not appreciating the misery of living in the desert. Westerners act as if the prosperity of today is simply natural, and, as a result, they have a cavalier attitude toward the ideas and institutions that make our prosperity possible. Recognizing our good fortune is the first step in securing it for posterity. The average American and West European lives the most bespoke lifestyle in human history, and yet we are angry that it is not even more tailored to our desires. In short, we are ungrateful. And in our ingratitude we indulge the devil on our shoulder that is human nature.
Unless you are reading this naked in the woods, nothing around you right now is natural. It is artificial. It is manufactured. And it is wonderful. But we refuse to see it that way. As Irving Kristol said, “When we lack the will to see things as they really are, there is nothing so mystifying as the obvious.”12 So let me return to demystifying the obvious.
According to economic historian Angus Maddison, the Western world’s economy from A.D. 1 to A.D. 1820 grew at 0.06 percent per year, or 6 percent per century—that is, essentially no growth at all.13 World per capita GDP rose from $467 in A.D. 1 to a mere $666 in 1820.14 Deirdre McCloskey estimates that, prior to the Industrial Revolution, pretty much everybody lived on about $3 a day.15 In material terms, even the marginally more fortunate lords and barons lived closer to what we would today call a subsistence lifestyle. Virtually everyone throughout most of human history has lived in what we today have the luxury of calling poverty.
Economic growth took off in the 1700s, starting in England, and has been accelerating ever since.16 Maddison estimates that the goods and services produced between 2001 and 2010 constitute 25 percent of all goods and services produced since A.D. 1.17 McCloskey’s figures put the difference between what our ancestors lived on and what we live on today as that between $3 and $100 a day (for bourgeois nations).18 J. Bradford DeLong finds a thirty-seven-fold increase in world per capita income from 1750 to the late 2000s, from $180 per person to $6,600 per person.19 And even the modern world’s poorest places experience growth rates unlike anything before the Industrial Revolution.20 Global GDP has soared, from an estimated $150 billion in A.D. 1 to more than $50 trillion as of 2008.21 Observed macroscopically, we are closer to Eden than Eden ever was.
The Bernie Sanders chorus would not dispute this: They recognize that enormous wealth has been accumulated. They merely argue that the poor have been left behind. That’s false. In the great migration out of the desert of time, the poor may have been at the back of the caravan, but they have lived in the oasis too. And as the West has marched deeper into the oasis, more of the world has followed us into it.
Around the world, the number of people considered poor has decreased both relatively and absolutely—an incredible feat, given massive increases in population.22 For all of human history before the modern era, what we call poverty was simply the Way Things Are. It remained so in most of the world as recently as 1820. By one dire account, in 1820, 94.4 percent of the world’s population lived on the equivalent of less than $2 a day, and 83.9 percent lived on less than $1 a day that year. As of 2015, only 9.6 percent of the world’s population lived on less than $1.90 a day.23
The figures are even more impressive in raw numerical terms. As recently as 1970, almost 27 percent of people worldwide lived in absolute poverty (less than one 1987 dollar a day). A little more than 5 percent did as of 2006.24
Decry “globalization” all you like. It certainly has come at a price for some citizens of the developed world. But the spread of market forces to the far corners of the globe has been the chief driver of the largest eradication of poverty in human history. Between 1990 and 2010, the percentage of the population in developing countries living in poverty fell from 43 to 21 percent, a reduction of almost one billion people.25 In 2015, for the first time in human history, less than 10 percent of the world’s population was considered extremely poor.26 The United Nations estimates more poverty was reduced in the last fifty years than in the previous five hundred.27
One of the great cleavages between left and right is a disagreement over the definition of freedom. The left tends to define freedom in material terms, the right in political ones. FDR argued that “necessitous men are not free men.”28 Thus the state must provide or guarantee health care, income (or employment), etc. This is so-called positive liberty. The right prefers “negative liberty”—freedom from government interference. What often gets left out of the debate is the fact that economic growth and technological innovation do more to provide positive liberty than any government possibly could.
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The ultimate finite resource is time. Technology cannot create more hours in the day, but it allows us to do more with the hours we have by reducing the amount of labor required to accomplish desired tasks. One of the dominant aspects of a precapitalist, preindustrial world was the sheer amount of work required to perform even the most menial tasks, and the staggering number of workers required to perform them. Today’s world is increasingly leaving the burdensome toil of the past behind.
To take just one example, consider the percentage of the total population employed in agriculture. Often romanticized, farming is, in fact, backbreaking labor. Fortunately, fewer and fewer people are actually doing it. When China first began to open itself up to markets in 1978 (a little more than a generation ago), 70.5 percent of the population worked in agriculture. After four decades of market-driven transformation, that figure in 2015 was 28 percent.29 Unlike in China, no one in the United States has memories of a majority-agricultural workforce. But as recently (in the grand historical scheme of things) as 1870, 46 percent of the population worked on farms. In 1940, well within American cultural memory, 17.3 percent of the population still worked in agriculture. As of 2009, 1.1 percent did.30 Available data worldwide show a similar pattern.31
Technology has lightened the burden of labor more generally as well. In 1950, the average annual number of hours worked per worker was 2,226.47 hours (about a forty-three-hour workweek in a fifty-two-week year). In 2016, it was 1,855.04 (about a thirty-six-hour workweek in a fifty-two-week year).32
Because of the vast time scope and the many countries involved in discerning such a figure, many of which either stopped existing or only began to exist or report data at some point during the measured period, it is worth taking these figures with at least a grain of salt. But the trend they describe is undeniable. And it is made possible by incredible increases in productivity. Again, available figures have their limitations. But those we do have paint an amazing picture: global labor productivity at $9.30 per hour worked in 1950, and at $36.64 per hour worked in 2015 (measured in 2014 U.S. dollars).33
Simply put: Getting more done in less time means less work. Indeed, the lightening of human toil that capitalism has enabled is so thorough that major public policy debates in developed countries center around getting more people to work—a debate that would have made no sense to any of our ancestors. This is a vital challenge, to be sure. It is increasingly obvious that work—meaningful, valued work—is essential to human happiness. Creating new sources of such work may be one of the most important political and cultural tasks of the next century. But let’s be clear: This is a good problem to have compared to the historical alternatives.
Another way in which capitalism is liberating is that it has allowed humanity to escape the Malthusian trap. Thomas Malthus, writing in the late eighteenth century, believed that the increase in population would always outpace the means of food production. For this, he is mocked today, but in truth his diagnosis was accurate for his time.34 Think again of the farmer, who throughout human history struggled, often in vain, just to keep himself a
nd his family at subsistence level. And compare that to today’s soaring vegetable crop yields:35
and cereal yields:36
Malthus may have accurately described his time, but capitalism lifted what seemed like an eternal curse of mankind.
Consider the New Testament miracle of the loaves and fishes, in which Jesus fed 5,000 people with a few baskets of bread and fish. The apostle Philip called this crowd so vast that not even more than half a year’s wages could have fed them all.37 Half of the median wage today in America would amount to something like $28,000,38 with which one could purchase multiple satisfying food items for the vast crowd. And this is only one example of the transformative power of capitalism. To keep things biblical, consult a study by Brian Wansink and C. S. Wansink that found that depictions of the Last Supper have grown both tastier and more generous over time, reflecting the increase in food options and portions over the centuries.39 To be more numerate, consider, for example:
• The world produced only 53.6 percent as much food in 1961 as it did on average in 2004-2006, whereas in 2013 it produced 119 percent as much.40
• Meat consumption per person in developing countries has nearly doubled since 1964.41
• The global average food supply per person per day has risen by more than 600 calories since 1961:42
• The overall food consumption shortfall among food-deprived persons has declined precipitously since as recently as 1992.43
• And, most stunning, the worldwide total of undernourished persons has plummeted since 1992, when it approached 1 billion, to now less than 700 million.44
We also have more and cheaper energy than ever before. Worldwide access to electricity—a utility that, let us not forget, simply did not exist for human use for thousands of years before the modern age—has steadily increased, from 75.65 percent in 1990 to 84.58 percent in 2012:45
All are testaments to the modern-day miracle of capitalism.
The skeptical reader may be annoyed that I am crediting all of these things to capitalism. After all, science and technology are not inherently “capitalist.” And that is true. People invented and discovered things long before anything like a capitalist system came online. But, as I have already discussed at length, science and technology were routinely made subservient to politics and religion prior to the Lockean Revolution. Innovation was literally a crime or sin in many parts of the world, because innovation was a threat to the established order. The freedom of the market economy is really the freedom to innovate, to find efficiencies in existing practices, and/or to invent new practices that render the old ways obsolete. People may have been free to build a better mousetrap that may have existed for millennia, but the freedom to bring a better mousetrap to market is a remarkably recent development.
Capitalism is actually the most liberating force in human history. Matt Ridley estimates that, with the average human consuming 2,500 watts per second, it would require 150 humans pedaling on exercise bikes to power the lifestyle to which each person in the world is becoming increasingly accustomed. For Americans, the number is 660 people.46 Economist Mark J. Perry estimated the number of domestic servants the average American would need to replace the technology we all rely on. To maintain the same level of convenience would require the physical output of about 600 people (keep these figures in mind next time you watch Downton Abbey, with its apparent multitude of servants).47 Either way, the proliferation of energy has immensely benefited mankind.
But even if the world were running out of resources (which it is not), we are continuing to do more with less, thanks to the market’s peerless ability to maximize efficiency in ways impossible to central planners. According to a 2013 study by the Alliance to Save Energy, “U.S. economic output expanded more than three times since 1970 while demand for energy grew only 50%,” resulting in millions fewer barrels of oil used than otherwise would have been. University of Manitoba natural scientist Vaclav Smil—Bill Gates’s favorite expert on these issues—identified some areas that drove this efficiency: modern steel production requires only 20 percent of the energy it did in 1900; aluminum production requires 70 percent less energy now than it did then; manufacturing nitrogen fertilizer requires 80 percent less energy now than it did then. Similarly, technologist Ramez Naam calculates that the energy required to heat a house has decreased 50 percent since 1978, and the amount of energy required for water desalination is down 90 percent since 1970.48 The United States now uses half as much energy per unit of GDP as in 1950, and the world uses 1.6 percent less energy for each dollar of GDP growth every year.49 The U.S. also uses no more water today than it did in 1980, despite a population increase of some 80 million.50
This efficiency has appeared in material production as well. Vaclav Smil points out that producing a dollar of value in the United States in 1920 required 10 ounces of material, whereas now it requires only 2.5. And the 11 million cell phones that existed in 1990 weighed 7,000 tons, whereas the 6 billion or so that exist today collectively weigh only one hundred times more.51
To go back to farming for a moment, we are not simply achieving the massive increase in yields by plowing in more inputs. In fact, we’re doing it with fewer greenhouse emissions.52
Contrary to what you may be hearing, resources are bountiful, and our innovation-driven efficiency in using them wisely is on the rise.
Capitalism has also completely transformed transportation, a depressingly primitive affair from the invention of the wheel to the first passenger train, limited, as it was, by “hoof and sail.”53 Here is historian William Manchester’s account of travel in the Middle Ages:
Travel was slow, expensive, uncomfortable—and perilous. It was slowest for those who rode in coaches, faster for walkers, and fastest for horsemen, who were few because of the need to change and stable steeds. The expense chiefly arose from the countless tolls, the discomfort from a score of irritants. Bridges spanning rivers were shaky (priests recommended that before crossing them travelers commend themselves to God); other streams had to be forded; the roads were deplorable—mostly trails and muddy ruts, impassable, except in summer, by two-wheeled carts—and nights en route had to be spent in Europe’s wretched inns. These were unsanitary places, the beds wedged against one another, blankets crawling with roaches, rats, and fleas; whores plied their trade and then slipped away with a man’s money, and innkeepers seized guests’ baggage on the pretext that they had not paid.54
Manchester also relates some contemporary travel times, in days, from Venice—a commercial center of the medieval world—to various other places: Damascus (80 days), Alexandria (65), Lisbon (46), Constantinople (37), Valladolid (29), London (27), Palermo (22), Nuremberg (20), Brussels (16), Lyons (12), Augsburg (10).55 Columbus’s first voyage took more than two months.56 In 1830, a trip from New York to Chicago took three weeks.57 All of these journeys are now achievable in less than a day. And, thanks to the market, the ability to travel is available to more people every year.58 Just as capitalism has gone a long way toward liberating us from darkness and toil, it has also toppled the tyranny of distance.
While it’s certainly true that capitalism and economic growth have come at a cost to the environment, free-market societies are far better stewards of the environment than command economies. Moreover, capitalism provides the means to remedy the damage.
Forests in wealthy countries have been expanding for decades.59 Despite widespread forecasts to the contrary, Europe’s forests grew during the 1980s and 1990s.60 From 1960 to 2000, India’s forests grew by 15 million hectares (larger than the state of Iowa). Leaving out the heavily developing nations of Brazil and Indonesia, global forests have grown by roughly 2 percent since 1990.61 And forest area has grown in the United States and China, the world’s two wealthiest countries.62
Innovation allows us to replace diminishing or depleted resources with better ones. Ronald Bailey notes that “railroads
, the 19th century’s ‘modern’ form of transportation, consumed nearly 25 percent of all the wood used in America, for both track ties and fuel.”63 Today, however, we no longer use wood for fuel, and we use it much less as a construction material (and paper usage is plummeting thanks to the digital revolution).
Similarly, when we decide that the by-products of industry are becoming a problem, the market allows us to innovate techniques that fix the problem. Hence, recently, energy-related carbon dioxide emissions in the U.S. have been on a downward trend, not upward:64
Because we are doing more with less, and because capitalism’s wealth allows us to spare what once we might have heedlessly plundered from the earth, capitalism is ultimately good for the environment. “Pollution levels are falling in rich countries and will begin to drop in poor countries as they become wealthier,” writes Bailey.65
Capitalism has also made us healthier. It has, for example, led to longer lives for more people. For premodern societies as a whole, life expectancy was under forty years.66 The shades (souls) of ancient Greeks often met Hades by age eighteen; most Roman shades met Pluto by twenty-two. A 2002 study of pre-Columbian Native American skeletons found that few people lived past fifty, or even past thirty-five.67 Not many Europeans in the Middle Ages reached middle age; half were dead before their thirtieth birthday. A young girl could expect to live to twenty-four. Men fortunate enough to survive past their thirties or early forties could reasonably expect to live a bit longer but would outwardly resemble senior citizens by what we still consider middle age.68