Whatever you believe about how profits should be shared, capitalism is the undisputed best way to create wealth. But nothing exists in a social vacuum, and capitalism may have had a big boost from unexpected trends.
Global wealth surged starting in the 19th century. What is less publicized is that the explosion was accompanied by similar breakout in population, and economists connect the two — when population grows, GDP has tended to rise with it. axios.com
We may not deserve as much self-congratulations as we think. Advances in manufacturing, technology, and finance made possible a new economy. I recall reading a book by a South American economist that said, America’s ability to turn everything including the family home into capital allowed its people to surge ahead of traditional cultures.
But advances also occured in public health, understanding of disease, vaccines, and food production and safety. Human lifespans increased and infant mortality plummetted in the “First World.”
It’s easier for any economic system to grow when the population grows, and when workers become healthier and more plentiful. Now populations are shrinking in many wealthy countries, or growing only where immigration is embraced (with whatever mixed emotions) and in the poorer areas of the world.
Our “western” economic miracle assumes constant growth. What about when growth slows and reverses? What ya gonna do now, capitalism?
Oh, the world will coast along for a while, but success seems to breed – or rather, not breed… Hmm, you see the issue? Endless increases in the number of humans might doom the planet, so I’m not complaining, but our falling numbers means something has to change.
I’m not worried. I may not be able to imagine an economy with falling GDP, but GDP isn’t the only measure of success. People with new ideas will come forward. Humans are a resourceful species. A hundred years from now, people will pity us backwards sods. But someone is in for an interesting ride.
I usually post about science, and economics is called “the dismal science.” That’s a term from the 19th century when we were beginning our climb. Don’t spend a lot of time looking into the author who coined the term – he wanted to bring back slavery to increase sugar production. Eek!
Any of you with fresh new ideas, with visions of a society that I, a flat-footed engineeer, can’t imagine… get to work. The future needs you.