Sunday, January 24, 2016
The great enrichment...............
...the average person alive in the world today earns in a year between ten and twenty times as much money, in real terms, as the average person earned in 1800. Or rather, he or she can afford ten or twenty times as many goods or services. Call it, as economic historian Deidre McCloskey does, the "great enrichment." She says it is the "main fact or finding of economic history."... The Great Recession of 2008-09 was just a brief blip in global terms: one year when the global economy shrank by 1% before growing by 5% the next.
By far the lion's share of this improvement went (and still goes) to ordinary workers and the poor. As McCloskey puts it, although the rich got richer, "millions more have gas heating, cars, smallpox vaccinations, indoor plumbing, cheap travel, rights for women, lower child mortality, adequate nutrition, taller bodies, doubled life expectancy, schooling for their kids, newspapers, a vote, a shot at university and respect." Global inequality is currently falling fast as people in poor countries get richer quicker than people in rich countries. The proportion of people living on $1.25 a day, corrected for inflation, has gone from 65% in 1960 to 21% today.
Surprising as it may seem, the cause of the great enrichment is still unknown. That is to say, there are plenty of theories...But none of these theories commands universal allegiance...They all agree on two things, however; nobody planned this, and nobody expected it. Prosperity emerged despite, not because of, human policy. It developed inexorably out of the interaction of people by a form of selective progress very similar to evolution. Above all, it was a decentralized phenomenon, achieved by millions of individual decisions, mostly in spite of the actions of rulers.
-Matt Ridley, The Evolution Of Everything: How New Ideas Emerge