The Economics and Political Science Room
I draw from several sources to explain the miracle of prosperity. While it is only material prosperity, it's all any modern economic system, capitalism or socialism, ever promises.
THE MIRACLE OF PROSPERITY UNLEASHED BY CLASSICAL LIBERALISM
Here's Professor Deirdre McCloskey explaining in a short video:...there is no example of a poor nation becoming rich with big-government policies (though we have tragic examples of rich nations becoming poor with statism).
I’ve offered my recipe for growth and prosperity, but let’s look at the wise words of Professor Deirdre McCloskey in the New York Times.
The Great Enrichment began in 17th-century Holland. By the 18th century, it had moved to England, Scotland and the American colonies, and now it has spread to much of the rest of the world.Economists and historians agree on its startling magnitude: By 2010, the average daily income in a wide range of countries, including Japan, the United States, Botswana and Brazil, had soared 1,000 to 3,000 percent over the levels of 1800. People moved from tents and mud huts to split-levels and city condominiums, from waterborne diseases to 80-year life spans, from ignorance to literacy. …50 years ago, four billion out of five billion people lived in…miserable conditions. In 1800, it was 95 percent of one billion.
Deirdre then explains that classical liberalism produced this economic miracle.
What…caused this Great Enrichment? Not exploitation of the poor, …but a mere idea, which the philosopher and economist Adam Smith called “the liberal plan of equality, liberty and justice.” In a word, it was liberalism, in the free-market European sense. Give masses of ordinary people equality before the law and equality of social dignity, and leave them alone, and it turns out that they become extraordinarily creative and energetic. …we eventually need capital and institutions to embody the ideas, such as a marble building with central heating and cooling to house the Supreme Court. But the intermediate and dependent causes like capital and institutions have not been the root cause. The root cause of enrichment was and is the liberal idea, spawning the university, the railway, the high-rise, the internet and, most important, our liberties.
In other words, the right ideas are the building blocks that enable the accumulation of capital and the development of institutions....
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And another view, Human history, in one chart
And finally, a neat little video showing the rise of democracy, one of the data points in the chart above:Luke Muehlhauser is a researcher who studies risks to human civilization. Last year, he embarked on an amateur macrohistory project: collecting all the data we have available for six different metrics of human well-being, and graphing those metrics to get a picture of how the world has changed over time.
The six metrics he charted were life expectancy; GDP per capita; the percentage of the population living in extreme poverty; “war-making capacity,” a measure of technological advancement for which we have the most historical data; “energy capture,” which reflects access to food, livestock, firewood, and, in the modern day, electricity; and the percentage of people living in a democracy. Obviously, we don’t have a precise measure of many of these things for most of history — but we have enough to get a strong sense of some trends.
He plotted those measures across the entire sweep of human history. The resulting graph is startling:
...“Until about 1800,” Mokyr told the Washington Post, “the vast bulk of people on this planet were poor. And when I say poor, I mean they were on the brink of physical starvation for most of their lives. Life expectancy in 1750 was around 38 at most, and much lower in some places. The notion that today we would live for 80 years, and spend much of those in leisure, is totally unexpected. The lower middle class in Western and Asian industrialized societies today has a higher living standard than the pope and the emperors of a few centuries back, in every dimension.”
That sudden, drastic rise in standards of living is what the chart reflects.
...If you took a look at these numbers in 1800, you might have concluded that it’s impossible to really change anything about the human experience. Every change up to that point had not affected life span, not really affected political freedom, and not affected wealth or personal capacity to affect the world. It’d be easy to just conclude that the human condition was immutable.
That would have been a mistake, though. In ways that were hard to predict, things were about to change....
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