Tuesday, 24 April 2018

Something happened - and that something was the free market

Man's natural state is grinding poverty:
Among economists and anthropologists, this is “settled science.” Economists left and right might bicker over minor details, but they agree that poverty is man’s natural environment. As economist Todd G. Buchholz puts it, “For most of man’s life on earth, he has lived no better on two legs than he had on four.” Nobel Prize–winning economist Douglass C. North and his colleagues write in Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History that “over the long stretch of human history before 1800, the evidence suggests that the long-run rate of growth of per capita income was very close to zero.”
For tens or thousands of years nearly all men lived in that grinding poverty. There were little flickers of light showing what was possible - in China, in Baghdad, in Florence - and then, bang, we suddenly and sustainably got rich, dragged ourselves out of poverty, and created the wonders of our modern world from dishwashers to the internet, from recorded music to space travel.

And that bang? It was the liberal enlightenment, the idea that creativity and innovation wasn't the preserve of aristocratic patronage but was for everyone. It was what we sneeringly called the middle class - whether suited banker or white van man - that made that great noise of human improvement. It wasn't government, it wasn't posh landowners, it wasn't socialism, it wasn't a cumulative process of incremental improvement - human betterment is a consequence of freedom - free speech, free enterprise, free assembly, free worship, free trade. Improvement came because we decided people shouldn't have to have permission from their 'betters' if they wanted to try something out.

So if you want to limit freedom - stop folk exchanging freely, prevent people from saying what they wish, halt people's right to gather together, limit what they can believe in and worship - any of these things and you offer future humanity a worse world. Above all, if you think free markets are a bad idea and need limiting, regulating and controlling by our betters, then you offer future generations a less wealthy, less healthy and less happy world.


1 comment:

Anonymous said...

Markets are a consequence, not a root-cause.

The root-cause was the invention of Compound Interest, which encouraged people to lend out their wealth to potential entrepreneurs, but which also encouraged those borrowers to work their creativity and their nuts off to repay what they had borrowed before the formula caught up on them. That mutual commitment drove the developments of imperial conquests, the Industrial Revolution and all the commerce and industry that followed.

And all from a simple 'spreadsheet' (before they'd been invented).