October 13, 2020


Revisiting the Simon-Ehrlich Wager 40 Years On (Marian L. Tupy and Gale L. Pooley, 10/13/20, Quillette)

In fact, that's exactly what has happened to the affordability of 50 basic commodities between 1980 and 2018. Over those 38 years, the world's population rose from 4.458 billion to 7.631 billion or 71.2 percent. Over the same time period, basic commodities, including energy, food, materials, and metals became 71.6 percent more affordable on average. For every one percent increase in population, in other words, resources became slightly more than one percent more abundant. Put differently, the time it took to earn enough money to buy one unit in that basket of 50 commodities in 1980 bought 3.62 units in 2018. The compounded growth rate of abundance came to 3.44 percent per annum. That means that the affordability of our basket of commodities doubled every 20.49 years. This relationship between population growth and resource abundance is deeply counterintuitive, yet it is no less true. The facts surprised us, and they will surprise you too.

Generations of people throughout the world have been taught to believe that there is an inverse relationship between population growth and availability of resources, which is to say that as population grows, resources become more "scarce." That was, historically speaking, true. In the animal world, a sudden increase in the availability of resources, such as grass after unusually plentiful rain, leads to an animal population explosion. The population explosion then leads to the exhaustion of resources. Finally, the exhaustion of resources leads to population collapse. If you take the Theory of Evolution seriously--and we do--you'll appreciate that human beings evolved from much humbler beginnings and were, as such, much more exposed to vicissitudes of fortune.

Over time, however, humans have developed sophisticated forms of cooperation that increase their wealth and chances of survival. Consider, for example, trade and exchange. As the British writer Matt Ridley observed in his 2010 book The Rational Optimist: How Prosperity Evolves, "There is strikingly little use of barter in any other animal species. There is sharing within families, and there is food‐for‐sex exchange in many animals including insects and apes, but there are no cases in which one animal gives an unrelated animal one thing in exchange for a different thing." Trade is particularly important during famines. A country struck by drought, for example, can purchase food from abroad. This is not an option available to other animals.

But the most important difference between people and nonhuman animals is our superior intelligence and the use of that intelligence to invent and to innovate. "In a way, everything is technology," noted one of the world's greatest economic historians Fernand Braudel (1902-1985) in his book Civilization and Capitalism. "Not only man's most strenuous endeavors but also his patient and monotonous efforts to make a mark on the external world; not only the rapid changes... but also the slow improvements in processes and tools, and those innumerable actions which may have no immediate innovative significance but which are the fruit of accumulated knowledge."

And so, over many millennia of trial and error, we have accumulated a store of knowledge that has allowed us to reach escape velocity--from scarcity to abundance--somewhere toward the end of the 18th century. 

One of the core beliefs that unites Left//Right is zero-sum economics.  Of course, it also distances them from reality.

Posted by at October 13, 2020 12:00 AM