The other day ShrinkWrapped was examining the pessimists’ view of the world in his post The New Age of Anxiety Cont.
The American Middle Class is anxious in ways rarely before seen. They are anxious about their health, worrying that at any instant the food they eat, the water they drink, and the air they breathe will cause a disease which will not only kill them but worse, will bankrupt them. They are anxious that their life style is under threat by the stagnation and decline in housing prices, the impending, and absolutely necessary, changes in Social Security and Health Care, the collapse of the dollar, and a job market in which traditional jobs seem to exist atop a house of cards which can collapse with alarming rapidity. Like the White Rabbit, they feel like they are running as fast as they can and not getting anywhere.
Alexander Tabarrok writing in Forbes, Dismal Science Sees Upbeat Future
New ideas mean more growth, and even small changes in economic growth rates produce large economic and social benefits. At current income levels, with an inflation-adjusted growth rate of 3% per year, America’s real per capita gross domestic product would exceed $1 million per year in just over 100 years, more than 22 times higher than it is today. Growth like that could solve many problems.
In the 20th century, two world wars diverted the energy of two generations from production to destruction. When the horrors ended, the world was left hobbled and split. Communism isolated much of the world, reducing trade in goods and ideas–to everyone’s detriment. World poverty meant that the U.S. and a few other countries shouldered the burdens of advancing knowledge nearly alone.
The battles of the 20th century were not fought in vain. Trade, development and the free flow of people and ideas are uniting all of humanity, maximizing the incentives and the means to produce new ideas. This gives us reason to be highly optimistic about the future.
When I read ShrinkWrapped’s post a statement stood out, where he said,
At the turn of the 18th century, Thomas Malthus famously described how the industrial revolution was going to lead to an exponential increase in human population; further he stipulated that the increased population would necessarily outstrip our capacity to feed ourselves, since food production would only increase at a mathematical rate. Human ingenuity proved Malthus wrong and continues to prove him wrong today.
I commented that actually, the Industrial Revolution itself proved Malthus wrong. The Industrial Revolution generated the economic impetus that would benefit mankind and sustain man’s ability to bring about what man’s ingenuity could summon.
Nowadays few people publically discuss the fact that the industrial revolution (that monster that Karl Marx despised while living off its benefits), combined with the rule of law, liberty and commerce, is what has made possible all of the advancements we enjoy in today’s world. It is not big government which makes for the betterment of mankind. It is man’s creativity encouraged by the profit motive and sustained by the appropriate legal, social and commercial environment.
I also commented at ShrinkWrapped, “On the same vein, perhaps the answer resides in reframing (which I believe is a psychological term – correct me if I’m using it incorrectly) today’s image from “Age of Anxiety” to “Age of Opportunity”, AND creating a business environment where the problems can be solved through businesses and individuals acting together.”
I stand by my words.