Superabundance: The Age of Plenty | Marian Tupy and Gale Pooley | EP 284
It's very difficult, I think, for modern young people in particular, to really understand how poor people were. Absolutely, yeah, absolutely. The best example I like to use is the sugar example. It's like, well, the time it took you to earn the money to buy one pound of sugar in 1850, how many pounds do you think you could get today? I'd love to survey my students on this, and they'll say, "Oh, like two pounds or four pounds." You get 227 pounds! It might explain why we're also fat, is because sugar has become just tremendously abundant.
Hello, everyone. I have with me today a guest I've had on before, Dr. Marion Tupy, and a new guest, his co-author at the moment of a new book called Super Abundance: The Story of Population Growth, Innovation, and Human Flourishing on an Infinitely Bountiful Planet (2022). It's the most complete opposite of any apocalyptic title you might ever envision. Marion has talked to me before, particularly about his book 10 Global Trends Every Smart Person Should Know and many others you will find interesting that was published in 2020. Marion is the editor of HumanProgress.org, which is a very good site, and I retweet them quite consistently. He's a senior fellow at the Center for Global Liberty and Prosperity and the co-author of that Simon Abundance Index, which we will talk about to some degree today. He specializes in globalization, the study of globalization, um, and global well-being and politics and the economics of Europe and Southern Africa.
Dr. Gail Pooley is an associate professor of business management at Brigham Young University at Hawaii. He's taught economics and statistics at Al-Faisal University in Riyadh, Saudi Arabia, Brigham Young in Idaho, Boise State University, and the College of Idaho. He earned his BBA in economics and Boise State in graduate work at Montana State, completing his PhD at the University of Idaho. He's been part of the development of the Simon Abundance Index as well and, as I said, is the co-author of this new book Super Abundance, which is a lot different than apocalyptic doom, as I pointed out.
Both doctors Tupy and Pooley have published widely in the public domain as well as professionally in outlets like Financial Times, the National Review, the uh, particularly evil journal Quillette, Forbes, the American Spectator, The Washington Post, etc. Any of your, what would you call them, traditional suspects or usual suspects. So anyways, we're going to talk about this new book today, Super Abundance, a three-part, ten-chapter analysis of why, strangely enough, things seem to be a lot better than we think and perhaps better than they ever were, and although we're more concerned about it than we ever seem to have been before. So welcome, gentlemen. Thank you very much for agreeing to talk to me, and congratulations on your new book.
Thank you very much! I'm delighted to be with you.
Yeah, so let's start with Super Abundance. I don't know whether to start with Julian Simon's famous bet. That's not a... It's kind of a nice narrative entry point, eh?
Um, I think that's right, yeah.
All right, well, so why don't you outline for our listeners and viewers the nature of this famous bet, why it was made, and what its broader cultural significance was? Because it was really a watershed bet, I think, in many ways.
Well, so in the post-Second World War era, global populations started to grow at a much faster rate than before, partly because of a tremendous amount of medical and scientific knowledge that started to spread around the world. Babies started to, um, you know, if your babies started to die young, people started to grow long, um, grow older, and so forth. And, um, some people started to freak out about it. They thought that there was going to be too many people in the world and consequently we were going to run out of resources, prices of resources were going to go sky-high, and there would be mass starvation. Now, the man who brought this particular obsession or potential problem into the public sphere was Paul Ehrlich, who still is alive; he's a biologist at Stanford University. In 1968, he wrote an extremely popular book, which sold millions of copies, called The Population Bomb. And The Population Bomb started in a sort of very terrifying language that we have become accustomed to from extreme environmentalists over the decades, and he basically said no matter what policy changes we are going to make now in the 1970s, hundreds of millions of people are going to die due to starvation. In fact, none of that happened. Nonetheless, Paul Ehrlich's book The Population Bomb scared and scarred psychologically generations of people. Movies had been made about how the world was going to run out of resources and, in a catastrophe, one of the more famous ones was with Charlton Heston. It was called Soylent Green. And the reason why it's important is because Soylent Green, whilst it was filmed in 1974, was supposed to come to fruition in 2022, which is this year. The basic premise of the book was that the world was completely empty of food, and so every time a person died, that person would be converted into biscuits called Soylent Green, which would be then fed to the people who stayed behind.
So, uh, on the other side, right? So, so a lot of this, just to give some background to that too, a lot of this was based on hypothetical biological thinking predicated on the work of Malthus and it's sort of a yeast or rat model of human existence. So, if you have a colony of yeast and you, and they have a finite medium that they're growing in, so a finite source of food, and you let the yeast multiply or let them, you know, provide them with the preconditions for their multiplication, their population will expand until they consume all the available resources and then it will precipitate precipitously collapse in starvation. And people tried similar, although less simple experiments with rats showing similar behavior. And then I would say documented similar phenomena in the field; I mean, animals will overgraze, for example, if they're herbivores. They will overgraze available cropland if they're not kept in check, so to speak, by predators. And biologists extrapolated from this and said that under all other things being equal, populations will expand until they consume more available resources than will sustain them and then they will tend to precipitously collapse.
And then that was applied to the human condition. But as we see from the rest of your story, the economists objected to this.
Yes, so the view that you just described is particularly popular among biologists. Economists don't think like that because they recognize that human beings are fundamentally different from rats or deer or rabbits or whatever else or yeast. We have this thing called intelligence and the ability to apply these little gray cells in order to come up with innovations which can get around the problem of scarcity. So, on the other side of the country, Ehrlich, as I said, was in Stanford in California; on the other side of the country at the University of Maryland, there was an economist called Julian Simon, a very intelligent and very interesting man who looked at the data actually and started noticing that things were becoming cheaper, which means that they were becoming less scarce even though the population of the world continued to increase. Therefore, in 1980, he made a bet with Paul Ehrlich, and the bet was on the price of five commodities. Let me see if I can remember them. The bet was on the price of chromium, copper, nickel, tin, and tungsten. And the deal was as such: if over the next ten years, between 1980 and 1990, the price of these five metals became more expensive—they became scarcer—Simon would pay Ehrlich, but if they became cheaper, then Ehrlich would pay Simon. Well, the bet came to an end on September 29, 1990, and the inflation-adjusted price of these five metals dropped by 36 percent in spite of the fact that the population of the world arose by almost a billion. And in spite of the fact that they both agreed that that would be the basket they would bet on—actually, Ehrlich picked the basket. Yes, Simon was generous enough. He said, "Paul Ehrlich, pick any five commodities or any five commodities you want," and those were the ones that Ehrlich picked.
Well, what's so interesting about that, I think—well, there are many, many things that are interesting about it—but one of the things that's so interesting is that you might infer from that that in order to put your notion forward as a scientific hypothesis, you actually have to bind it with a time frame. You can't just say, "Well, at some point in the future, the population is going to expand to the point where we consume all our resources." It's like, well, what do you mean? You mean a year? Ten years? A hundred? A thousand? Ten thousand? A hundred and fifty thousand? A million? You mean you get to have the whole time frame for you to be right or no? Are you accurate enough in your knowledge so that you can actually pin it down, let's say within a decade or something, some reasonable fraction of a human life at least? And so because, I mean, the biologists who, when they responded to that bet—because it was quite the cultural moment in some sense—the rejoinder from the environmentalist doom types was, "Well, we were off by a few decades, and that's why we lost it, isn't it? That we're wrong; it's just that these things are complex, and our timeframe was wrong." It's like, yeah, if your timeframe is wrong, then your theory is wrong. And if you can't place the timeframe around it, then your theory is so weak that you should just be quiet about it. And I think the same thing applies to all this climate doom as well. It's like, specify it! Well, we can't. It's too complex. Well, then quit terrifying everyone!
You know, another thing that was interesting about it is, uh, you know, as professors we get to say all kinds of things and never be really held accountable for it, and so putting money on the table, you know, also added this really interesting dimension to it. Not only is it framed in time, it's framed with a bet, so got to hold this guy accountable for his claim—some skin in the game.
Well, and then there's a reputational issue too, right? Because it was a very public bet, and it wasn't so famous when they first made it, but by the time it came around for the bet to be settled—and I would say this is particularly true of Julian Simon, who we should talk about for a moment. Paul Ehrlich's a pretty smart biologist, but Julian Simon was a genius! And so that's useful for people to know too. I mean, he was a truly outstanding mind, and for him to be optimistic in the face of what was almost a universal pessimism in the late 60s and early 70s around, well, the possibility of nuclear war and certainly the possibility of overpopulation and it might mean—and environmental degradation and all of that. That apocalyptic vision was what everyone who paraded themselves as informed and, you know, properly skeptically pessimistic—they're all parading that as moral virtue. And for Simon to come out and say "No, you guys just..." It's like Elon Musk now coming out and talking about how, you know, one of the biggest problems is to be sad as in the next hundred years is depopulation, which I happen to believe is true. I also think he's dead on with his criticisms about the UN's population predictions. I think the UN predictions are—there's no evidence they're accurate at all. And even if they are, we can handle the nine to ten billion people that will probably peak out at... The United Nations has been historically quite—their numbers have not stood the test of time. There are other demographic demographers in the world who have done a better job at predicting where the world population is going to be. And the latest bit on this is in Lancet, which predicts that by the year 2100, we are either going to have nine billion people in the world—we are currently on eight or seven billion people in the world—so, you know, it's perfectly possible at the end of this century there will be as many people in the world as there are now. Obviously, the further out in the future you go, the less clear those predictions are.
But there is another thing that I want to mention about Julian Simon because you expressed an interest in learning a little more about him. It wasn't just that he was right, but he was facing a lot of personal invective from the great and the good. He was regularly called an idiot and a fool who didn't know what—a Ehrlich famously said that to explain biology to Simon was like trying to explain, um, the oil market to a cranberry. Um, all sorts of other things. Um, Ehrlich continued to receive throughout his life a variety of very prestigious academic prizes. Only recently he was invited to Vatican, of all places, to get a talk on the danger of overpopulation—that was like three years ago. So in spite of being, well, you know, you don't want to have too many souls to save, so in spite of being wrong all the time, he just keeps on being highly revered.
There's one more thing I do want to say, and then I think I will hand it to Gail because Gail will do a good job of explaining why we thought that we could improve on the bet. But, the key that I wanted to talk about is that in spite of the fact that Ehrlich lost this very visible and very humiliating wager with Simon, the idea of overpopulation never went anywhere. Yes, the environmental movement is incredibly complex. There are people who are extremely smart and well-intentioned, like, for example, Lomborg or Stephen Pinker. They mean well; they are interested in technological solutions to climate problems, and I count myself in that kind of sort of universe. But there is an extremist environmentally subtext or subgroup in environmentalism who have these apocalyptic obsessions. So, for example, and this gets translated into the movies, which billions of people see around the world. In our book, we talk about how, um, with every decade since the 1950s, the number of apocalyptic movies has been actually increasing, which is the exact opposite of what is happening on Earth. The Earth is getting richer, healthier; in some ways, there's even environmental improvement, but there are more and more movies about how the world is going to end in some sort of catastrophic apocalypse. And one of them is a very, very famous one, and that was the Infinity War, which was seen by something like every fifth American. And that movie plot is about a villain who has these Malthusian or Ehrlichian ideas—you have to kill half of the population of the universe in order so that the other half can survive. And so this is not an academic debate; people around the world are being fed the diet of Malthusianism almost on a daily basis.
You know what was interesting? One of the things that was interesting about that Marvel movie and interesting about the Marvel pantheon in general is that, well, Thanos is a derivation of Thanatos, so he's a figure of death. And in the Marvel movie—and you might have expected this, given our pop culture—in the Marvel movie, Thanos is clearly a villain. And that's interesting because even though there is this apocalyptic tone to the movie, he is a villain. His job, his theory that half of everything has to die in order for the other half to thrive, is put forward and even in a devil's advocate sort of way, but it's clear that he's an enemy. And one of the things that was so interesting about the Marvel pantheon is that if you look at it quite carefully, it's not politically correct and it's not apocalyptic. Um, the movie, for example, Scarlett Johansson's last movie, the, uh, I think it's the Black Widow—she is an unbelievably politically incorrect character. She's the real antithesis of this apocalyptic doom-saying hyper-agreeable culture that has produced the sort of movies that you described, like Soylent Green. And I thought that was extremely interesting because I think there is a dawning recognition at the level of public fantasy that these purveyors of doom are not only wrong but perhaps murderously wrong and that we've been led down the garden path in an inappropriate way for about four decades or five decades.
And then I have one more thing to say about that. You guys can tell me what you think of this. I think part of the reason too that we see this apocalyptic vision popping up so much now isn't so much because the apocalypse is nigh in a sense, in that we're doomed to it. It is that things are changing so fast that in some sense the destruction of everything we know is always upon us, because like, are you willing to make a prediction about what your life is going to be like ten years in the future? In many regards, I mean, technology has changed our lives so much, and that's happening so quickly that it's unparalleled. And so I think we all feel like, well, we're on the edge of precipitous change, and it might be terrible, but while your point is it might also be extremely good and that we could direct it that way.
Yeah, I would just add to that that we're on this cusp of exponential creative destruction because, right, we're having this destruction, but we're also having this creativity that's actually on a steeper curve than the destructive curve.
Well, that's what I'm hoping too. You know, when I go out in my lectures, I'm trying to tell people: Look, we've got everything we could possibly want in front of us if we are smart enough to reach out and take it if we want it. Much of this environmentalism that you've described, and I think your work is such a good antidote too, doesn't seem to me to be pro-flourishing. There's an anti-human element to it, a hatred of humanity that I think is deeply pathological and resentful. And I think the fact that Ehrlich's ideas about population excess are still so popularly trumpeted forward as the only ethical attitude towards the problem of humanity is an indication of the depth of that—well, some of its malevolence as far as I'm concerned. Like, I've heard environmentalists say, many of them say, you know, there are too many people on the planet; the planet would be better off if there's only a billion people. Human beings are a cancer on the face of the Earth; you know, we're like a virus that multiplies unchecked. I mean, Jesus, guys, seriously, man, watch your language!
You know, it's interesting that you bring that up because it was really this—1973, Ehrlich comes out with his book in '68; '73 they come out with Limits to Growth, this Club of Rome does. And interesting that '73 was also the year that Thanos was introduced in the comic book. So the culture was kind of doing this thing. And, um, but Club of Rome, they come out with this argument that says, look, population's gonna do this, and we're all going to collapse. Well, population didn't do this. And then so they shifted and said, well, we seem to be okay; it's pollution that's going to do this, and we're going to collapse. And then pollution goes the other way, and they say, well, we're going to redefine our model now to um, it's not pollution; we're going to define CO2 as pollution. So they keep redefining the model to be able to predict this collapse, and it's like, well, what are you guys going to do here? We can—human population continues to do this, and life expectancy and abundance continues to grow, and in spite of your modeling, oh, you know, we got a psychological problem on our hands here, I think, to some degree.
It might be that, you know, human beings are unique, and we could speak biologically here, I suppose, in that we really do—we're the only creatures that really do apprehend our own finitude. You know, and so in some sense, we are obsessed and possessed by the apocalyptic vision because we all know that we're going to die, each of us, and that all the people we know are going to die and that everything we know is going to come to an end. And so that's there as a reality. And then the question is, well, that's a fundamental reality, and we try to stave it off, we try to stabilize things, and we try to make our economies productive and sustainable so that we don't die. But we know that we're fighting a losing battle, and it isn't—we don't understand how that fundamental knowledge of finitude is an endless source of degeneration of apocalyptic fantasies or how to manage that in any real sense, you know, because it is the case that we—while we certainly do face limits personally, limits of mortality, limits of time—limits of time, which is the one resource which is actually getting scarcer, right?
Right, right! Well, as we leave, I mean, we obviously live longer, but it is the one scale resource we know that it will come to an end, yeah, right? And there's only a—there's a real limit to what we can do to stave that off, even if we generate a tremendous amount of money while we expend our time, right? So each second becomes more valuable in some sense as you age. And that— and the concept of time is really fundamental to our work because, well, I'll hand it over to Gail, but essentially we were dissatisfied with the wager between Ehrlich and Simon. We thought we could do something a little more interesting and a little different, and I think Gail will be able to explain it better than I can.
So in Simon's first book he talks about—or one of his first books he talks about looking at the price of things. The money price of things. And the problem with money is money loses its value over time, typically, so you have to make this adjustment back to real dollars versus nominal dollars. But he also mentioned this interesting thing; he said, you know, we can compare it to time. And he said, well, how much money can you earn in an hour of time? And then take that and compare it to the price of things. So he talked about the idea of time prices, so that kind of piqued our interest a little bit. And then there was also a Nobel Prize-winning economist, William Nordhaus, who did this really interesting study about the price of light. And he said, let’s look at what it costs you to earn the money to buy one hour’s worth of light, and you can measure light in lumens. And so he does this study. This light is just doing this.
Yeah, well, you said in your book that it's so amazing to think of this. Is that one electric 100-watt electric light bulb is the equivalent, in terms of light generation, of 17,000 candles. I mean, that's a lot of candles! And then you made some comment too about how much labor in terms of time it took to earn that many candles. And you can imagine even now a 17,000 candles, especially if they're made of beeswax or something like that, that's not inexpensive.
Yeah, so I mean, if you go back to—you know, we go back to 1800, and it took three—I had to work three hours to earn the money to buy one hour's worth of light. And so the time price was three hours for one hour today; it's like one point, one point 166 seconds of time.
Yeah, same light! So we think we—well, we want to point out what this means too because prior to the dawn of inexpensive light—and also this obtains in many places in the world now—the fact that there was no light seriously delimited the number of hours you could spend working. And so when you're buying light, you're not just buying light; you're buying time to be productive. You can't read without light, you can't write without light, you can't—well, it's hard for people to imagine this because we’re never plagued by darkness, ever anymore. Ever. And, you know, maybe we suffered from the absence of the night sky and I think we do, but light is basically free, and that means that we have many more hours per day. The—you know, the other thing that I really struck me in that regard, it wasn't your work though, but other many people have commented on this—is the absolutely revolutionary consequence of inventing eyeglasses for people.
Because many people in medieval Europe—and obviously across the world—had to do close work, like tailors. And when they're—when they lost their ability to see close, like you do when you need reading glasses—they couldn't work anymore. And so this simple technological innovation of glasses, you know, it added 15 years of productivity to people's lives. And then light, well that adds, what, four hours of productivity per day? And it's free!
We see one of the things I really like about your work is that you help me understand and communicate to people just how rich we are. We're so rich, we don't even know how rich we are!
Well, that's right! Um, I think, uh, you know, you talked about light and productivity, which is of course very important, but if you didn't have light, you didn't have anything else. I mean, there was no entertainment; obviously, there was nothing on TV—there were no TVs, as you said; you couldn't read. Most people lived in absolute poverty, so they really couldn't afford a candle, and therefore once the sun set, you just went to bed in the cold.
And so Gail mentioned the concept of time price, and I think it's very important that we explain it in greater depth. So here's the deal: you know, we buy things with money, but we really pay for them with our time. So there are money prices, and there are time prices. And it's pretty easy to convert a money price to a time price. You just take the money price and you divide it by hourly income. So for example, if something costs 20 dollars and you're earning twenty dollars an hour, the price of that is one hour. So money prices are expressed in dollars and cents; time prices are expressed in hours and minutes. And this offers, you know, a number of features. First of all, we go to this universal standard of time, and it's not—you can't counterfeit it, you can't inflate it; it's this constant flow. So everybody recognizes what an hour is. We have this kind of perfect equality of time; we get 24 hours a day! And that's independent of any real socio-cultural differences, because, well, we all suffer from the same degree of finitude in some sense.
Yeah, and I'm amazed—well, I can't believe this. I know that it's a very tricky business for any academic enterprise to get its fundamental units of measurement correct. It's of absolutely crucial importance that that be done, like the periodic table of the elements for chemists, for example, and maybe the five-factor personality model for psychologists, and IQ as well—these fundamental measurements—and so, but it is kind of surprising to me that you economist types didn't figure this out until recently. Like, what was in the way?
Well, Julian Simon had kind of figured it out, and actually Adam Smith talked about this in his Wealth and Wealth of Nations. He talked about the fact that we have to buy things with our labor, which is really our time. And you know the other feature of time, I think—we've got what, seven universal standards of measurements? Six of those seven all go back to time.
So we're trying to move— we're trying to move the thinking back to this universal standard of time. So once you've established a time price, then it's the comparison of that time price over time. You know, it cost me one hour a year ago; today it only costs me 45 minutes, you know, so the percentage change in that time price is really what we should look at. And then it's the ratio of the ratios that we look at. You know, if something goes 75 percent off, for example, it's like, okay, 75 percent off—that's interesting—that means for the time it used to take to earn one unit, now I get four. So going from—it's a 75 percent decrease, but you think about it the other way: it's actually a 300 percent increase in your abundance because I used to get one; now I get four.
Right, right! And there's a moral claim; there's a moral claim here too that we should be very careful to make explicit, I would say, which is if we've accepted the proposition that something is worth having, it's useful, and, uh, justifiable to assume that if we can produce that more efficiently, that's good, right? Those two things seem to go right together, so because I think when you're trying to nail down something like fundamental measurement, you have to nail it down all the way to the ground. If we agree that there are good things to have, so we have good and have as agreements, then we're also going to agree that if we can get good things to have with less expenditure of the most fundamental resource, that also constitutes a good. And that would partly be because, well, there are lots of good things we like and need to have, and so if we have more time, we can get more of them too. So there's really no way of subverting this claim, I would say, if you accept the initial proposition that there are good things that we can and should have.
Yeah, exactly! So once we kind of got this time price figured out and said, you know, we should take all of these prices that we have and convert them to time prices and then see what happens. So we go back to Simon's original bet; we're kind of inspired by that. One of the critiques of Simon's work was, “You know, you were just lucky, Simon, because it was only for 10 years and it was only for five commodities.” And so we said, well, why don't we expand it from 5 to 50? So we went beyond just these metals and we went to energy. We looked at food; we looked at materials; we looked at other metals. So we developed this data set of 50 commodities that are tracked by the World Bank—that tracks these prices. And the—the—we could go back in time and look at all other data.
Okay, so I got to ask you a political question real quick about that. So you know I'm obsessed with measurement because I was a psychometrician when I used to be a university professor when that was still possible, and I've always been skeptical of the measures that politicians use to assess the economy, both unemployment—that I’m skeptical—I'm very skeptical of inflation measures, not in and of themselves, but I'm not convinced that those are sufficiently valid measures, reliable and valid measures, to base our entire economic analysis on. And so I'm wondering if, if you convert the cost to cost in time and standardize it in that manner, can you then rank order countries? If you take, let's say, a 50-commodity random sample of fundamental goods, can you then chart a progress graph of countries' relative move towards prosperity, and do that year by year? Can you derive yearly indexes, and is that a good replacement for something like inflation, if the inflation rate assessments take a look at page 142?
We've got 42 countries that we've done that with! So we go from Argentina to the United States and look at all these different countries and measure what their income is doing, their hourly income is doing with these commodity prices. I would go back to, again, the World Bank commodity prices, you know, those are public prices, so everybody—there’s no disagreement that these were the prices of those commodities. And then the next question is, what do you use for the denominator below? You can use a country’s local reported average hourly income. In this case, we're trying to get a number that we could use as a proxy for the whole planet, and what we finally came up with is, let’s look at GDP per capita per hour. So how much do you have generated on the planet per hour worked? And let's use that as an index or a proxy for how productive people are getting because we also note that when innovation occurs, it shows up both in lower prices and higher incomes. So it’s important that the time prices are actually capturing both of those values because it’s the ratio of those two numbers. So this graph or this graph, these data you talked about on page 142, you show for example that change in resource time price in China was not point—it's negative 97.5 percent, and China's at the top of the list. And so there's a tremendous number of developing countries that are leaping forward.
So, but I would also suspect—maybe this is wrong, but tell me if it's right or wrong—there must be low-hanging fruit to some degree when a country does emerge from its agrarian past, let's say a non-industrial past, into an industrial present and free up its markets and move into the modern capitalist age. Free-market age, and so China, South Korea, Sri Lanka, Ireland does extraordinarily well. Is there any way of adjusting that for baseline prosperity? I mean, the Americans have done as well as the Chinese but they started off a lot better, let's say, in the last century, right?
And you can make those comparisons; you can put them side by side. I think that the interesting thing for us is what are the slopes doing in these different countries? I mean, yeah, the United States has got this lower rate of growth, but all of these other countries are catching up at such a rapid rate that there's none of these countries that are actually going the other direction.
And yeah, something! Eh?
Yeah, it really is. So now the key with China is to remember that China and India—China has done spectacularly well over the last 40 years, and so has India. It's very important to remember that those two countries were actually the most populous countries at the time when they were super, super poor. In other words, if you looked at China in 1960 or India in 1960, they already had mass populations but they were super poor. So what happens? Super abundance is not simply an outcome of adding more people to the world, although that's important. It's people times freedom will give you very high rates of economic growth. Now I'm not suggesting for a second that—I'm not suggesting for a second that China is a free society, but what I am saying is it's comparatively free compared to what it was. It is much freer than what it was when Mao killed 45 million of his fellow citizens.
Another thing—another reason why this research is kind of important is because Gail mentioned the Club for Growth report. Club for Growth was read by the Chinese Communist Party in the 1970s, and between delightful—how delightful! Between 1980 and 2015, they had this one-child policy in place. The Chinese government is very boastful and very proud that they have prevented or extinguished 400 million births in China between 1980 and 2018. China, as well as the world, would be much more prosperous societies if that hadn't happened, but it was a spectacular, spectacular shot in the foot, as you would expect from a communist regime, because what they are left with now is a very unstable population pyramid whereby the population is getting old and there are not enough workers to support the economy of the size that they currently have.
And so yeah, they also have a plethora of men, which they’re going to pay for too! That's a recipe for social instability! In like 2016 it was—maybe it was 2008—the sex ratio peaked at 120 Chinese men per hundred women, which means that 20 percent of men in China could not hope to find a Chinese wife, and there is very good evidence suggesting that men who do not have a partner are much more likely to engage in criminal activities. Yes, there's very good evidence for that.
So one of the really killer things about this graph on page 142 is you have a column there entitled "Years to Double Personal Resource Abundance." And so then, by your criteria, it's how many years does it take for you to have to work half as long to get the same resource, whatever that is. And this is stunning! This is 1980 to 2018. So basically a 40-year period—over a 40-year period, China’s average years to double personal resource abundance was seven. Unbelievable! But even countries like you list: India, it’s 15; New Zealand, 19; Finland, 20. So that's really, certainly within the confines of, well, that's four dabblings in the average life, man! It’s deadly! And this is even among developed countries.
Yeah, it’s really—and the average was—the average was 20 years. Now, some people may say that doubling of personal abundance—now we are not talking about, you know, we are talking about resources. Resources include things like beef, rice, coffee, tea, milk, oranges, bananas, whatever. Now, some people may say that doubling of abundance every 20 years is too slow, but this is where at least a cursory understanding of history is very important. People need to understand that Homo sapiens has been around for 300,000 years, and our standard of living was stagnant for tens or even hundreds of thousands of years. Nothing has changed! Exactly the same amount of food and resources that your parents could buy, you would be able to buy, your children would buy. So by historical standards, the kind of appreciation in abundance, the kind of doubling of abundance of 20 years is actually—well, it's close to a miracle! It is a miracle! It's unparalleled, and it is really important to drive that point home. I mean, people tend to think of change in human societies as the norm, and that is, in some sense, true compared to animal societies, which just don’t change at all. I mean, a Grizzly now is exactly the same as a Grizzly was 60,000 years ago for all intents and purposes! But, you know, even in very technologically advanced cultures like ancient Egypt, which was a much faster developing country, let's say, a society than the typical Stone Age society, there were periods of time in the Egyptian archaeological record that exceeded a thousand years where there's zero evidence of any technological change whatsoever.
And so there are—and then if you go back, let's say, to so-called Stone Age civilizations, there's good anthropological evidence for the persistence of some rituals, which left a certain archaeological mark, persistence of those rituals unchanged over a twenty-thousand-year period. So the rule in biological systems is lack of change. At the cultural level, and even among human societies, generally speaking, rates of change are unbelievably slow. And so for people to say, well, you know, doubling every 20 years isn’t fast enough, it's like, well, compared to what? And the other thing to think about is how fast and doubling do you think we can stand? You know, because some of that is, I know you think, well, oh no, we’re getting prosperous too fast! Isn’t that a problem? If that’s a problem, you need to have—if you have to have a problem!
But it is challenging, you know? I mean, because our society is changing so rapidly now, it’s actually hard for people to keep up with it. You know, they get superannuated in some sense. So in any case, it’s a remarkable—it's a remarkable set of observations, and it's very difficult to look at this without being really sad, I would say, in some sense that we had to swallow so much apocalyptic nonsense for so many decades to the detriment of so many when the evidence is starkly clear that more people in freer markets solves all the problems that everybody wants to solve faster than anything we've ever produced by a large margin.
I should like to point out, of course, that whilst I'm cautiously—or perhaps rationally—optimistic about the future, nothing in what Gail and I write should be understood as a guarantee that things will go on improving in the future at the rates that we have seen before. You know, in our conclusion of the book, we identify three critical problems to maintaining super-abundant growth. By the way, we should probably at some point define what we mean by super-abundance. But the three very important components of how we can ensure that super-abundance continues—well, first of all, we cannot have a population collapse, which is something that Elon Musk continues to warn against. Now, in the book we don't say that—we don't take a position on what is the optimal size of the world's population—but what we do say is that parents, when they are making decisions about having babies, that those decisions are not made in a vacuum. When parents are being told that bringing an additional child into the society is a crime, that you are hurting the planet and the rest of your species—if that’s what parents think, then of course that will have an impact on their fecundity.
And in fact, we now have studies that have been conducted—or rather opinion polls that have been conducted over the last four years, and they show that people do take environmental apocalyptic warnings into account when making decisions about whether to have babies or not. The second problem that we need to avoid if we are going to remain super-abundant is, of course, freedom of speech. Freedom of speech is absolutely fundamental. It is not only fundamental on a personal level—if you cannot speak freely, you cannot think freely, you cannot express yourself freely—but on a societal level, if you are following an idea off the cliff like lemmings do, you know, it could be a bad idea. If it's a bad idea, then you are going to end up going off the cliff, right? That was the problem in communist societies. I grew up under communism part of my life, and because we didn't have freedom of speech, people couldn't point out that the society was actually stagnating, and in some ways retrogressing, and we couldn't come up with a way of resolving our problems and get on a better path. And that is why speech codes and banning of expression of ideas, no matter how offensive we may find them—after all, heliocentrism was offensive at one point in the past. But if we prevent these ideas from being aired, then we don’t know really—some of them may be very good, and we should remember them, and the third potential problem for super-abundance is, of course, if the market gets destroyed through overregulation or socialization. And the reason for that is very simple: markets provide us with signals about what's valuable and what's not. Markets allow us to see which innovations are going to be useful and which innovations are going to be useless. This is what's called the price mechanism in a free-market economy. Prices tell you exactly what you need more of, like baby formula in the United States or, you know, oil and gas when it goes up—that you need to produce more of that.
But if government—
Right? Then that's a—that’s a signal. We should point out because it's so important for people to understand. You know, you drew a connection between free speech and free thought. People often think of free speech as a hedonistic right in some sense, I and every other Yahoo could say exactly what we want whenever we want, and maybe that's for our own, you know, enjoyment. But that's not it exactly because there isn't any difference between speech and thought in a technical sense. Much of the thought that we undertake, we undertake in discussions like this where we're exchanging ideas and modifying them and communicating. And that free speech is thought, and then the question is, well, what's thought? And the answer that is, well, that's how we abstractly adapt to the horizon of the future before we actually adapt to it so that we try out new ideas that might match what's coming at us that's unpredictable in this virtual space that's characterized by the exchange of thought, so that we don't have to die by making the wrong decisions when we're actually forced to act.
And I would say we can make that a biological claim because the prefrontal cortex, which is the home of abstract thought, grew out of the motor cortex, and its purpose is to run simulations of the world and simulations of potential action patterns in the world before you implement them so that you can weed out the deadly ones and not implement them. And so we actually evolved— and the entire part of our brain which we use socially to kill bad ideas before they kill us. And so then if you interfere with free speech, you don't get to do that. And free speech is associated with free markets in this crucial way that you describe because it is very difficult to know what's going to be valuable next as things change, and the way we do that is we subject that computation to a massive cognitive instrument, which is the free market. Hundreds of millions of people are making decisions all the time right on the edge of change, and if we know the price of something, we're as caught up with the future as we can possibly be. And so if we interfere with that, on our great peril, because that is the cognitive mechanism that keeps us updated.
I would simply add to that, and then I will hand it over to Gail, is that free speech and free markets are learning mechanisms. When you say something which is stupid, somebody else can say, "Well, that actually doesn't work." And if you are smart, you're going to internalize that comment and you are never going to, you know, express that to you again; you are going to internalize the truth. And the market is a learning mechanism as well, provided that it's free, so it can indicate what works and what doesn't. And it's free, so it can vary.
Right! So I think that making this connection between free speech and the market is a really—it's this idea that wealth is fundamentally knowledge. It's the growth and knowledge that distinguishes us from the Stone Age. It's entirely due to the growth of knowledge, and this is a point that one of our friends, George Gilder, makes. He says, "Wealth is knowledge; growth is learning; and money is time." And from those three propositions we can derive this theorem that you can measure the growth of knowledge with time.
So it's really, you know, how do we grow knowledge? Well, there's also a definition of knowledge that's rooted in there to some degree because you might say, well, if you can do the same amount in half the time, you're now twice as smart; you have twice as much knowledge! That's like a definition, right? Because the knowledge—you'd have to define knowledge as useful in relationship to something, which might be the production of something of value. And so if you could do that twice as fast or with half as many resources, especially time, well then your knowledge is doubled—that's by definition in some real sense, right?
So we define abundance as this measurement of time prices as they relate to your adding—you must be adding more knowledge either making the price, the money price, lower or you're increasing income or doing a combination of both because it takes you less and less time to earn the money to buy that thing. And it's a consequence of this growth in knowledge. And that growth in knowledge, it comes from all over the place. It's not just researchers in the lab; it's just not professors. It's everybody on the planet is contributing these little bits and pieces of knowledge all the time.
Well, look, you can tell I'm always—I always find it a miracle to go to Home Depot, especially the tool aisles. You know, and you walk down into an aisle and there's like, 5,000 kinds of fasteners, and you think, well, what does that mean? It means that somebody—generally male—has found some little problem when he was hanging up pictures on a wall or trying to get a bolt off of a particularly recalcitrant piece of machinery, some little practical problem, and then spent untold hours figuring out how that could just be made better, and then you just have shelves and shelves and shelves and shelves and rows and rows and rows of that. And like, I learned because I’ve done a lot of house renovations and that sort of thing—I learned that if a construction job is difficult, that means you didn't find the right tool because someone out there has figured out how to do that well. And you can certainly see that with com, obviously, with computer software as well.
So it is miraculous that this is the case.
That's another definition of what a market is. The market is a place where you go to find people that can solve your problem better than you can solve it.
Right, right, right, right, okay, so let's walk through your book again a little bit in more detail, shall we? The first chapter—so part one is "Thanos's Deadly Idea: From Antiquity to the Present and Beyond," and so that's this idea of this intrinsic limit of growth and the fundamental pathology of human population. And so we've kind of dispensed with that fairly effectively. Are we in the midst of progress? Are we facing the apocalypse? Well, probably both, but certainly, we're in the midst of progress.
And we covered Thanos as the intellectual and practical progenitors and Julian Simon and the bet that made him famous. And in part two, measuring abundance, new methodology, empirical evidence, and in-depth analysis. And so let’s go over the Simon abundance framework because you've both done specific work on that. And I mean, is there anything that we've started to cover—have we covered it enough, or are there more things you want people to know about it? Marion, do you want to talk?
I think I'll leave that to, um, uh, I think I'll leave that to Gail.
Yeah, sure, absolutely. So we go back to this idea of time prices. Let's convert everything to a time price, and what that allows us to do in addition is we can apply a time price to any product, any place, at any time. So I can go back to France in 1800 and figure out what the time price was for a loaf of bread, and I can compare it to the time price of an orange in New York City or Toronto today. So once we've created these time prices for everything, then let's see what they're doing over time.
And that's the empirical—so we've got this framework, this analytical framework that says use these, uh, convert things to time prices and then look at the change in time price over time, and that will tell you what's happening to individuals, what's happening in their life in terms of their personal resource abundance. And that is just this measurement of, well, it cost you this much time, uh, yesterday; it cost you this much time today; your abundance is increasing by that ratio—the percentage change in that ratio. You know, if one drops by 75 percent, it means I get four for the price of one; my personal abundance is increasing by 300 percent.
So take the framework, go and apply it to all of these commodities—whatever commodities, finished goods—bicycles, drills, and see what's happened to these time prices!
And, yeah, so let me ask you about that? These commodities that you've looked at, so let's first of all define that. So, we're assuming that people acquire and work for things they both need and want, and we're going to not take an a priori stance of a priority judgment about that. We're going to assume there are all sorts of things that people need and want and that there's no externally reliable way of determining what those should be, and so we'll let people make those decisions themselves, and people will vary and be similar in some ways in relationship to those decisions. How do you ensure that when you look at the improvement in taught in efficiency in relationship to production that you've properly sampled the domain of commodities?
Okay, good question! So we started with this idea of, let's just look at these basic fundamental commodities that have not changed over time: a bushel of wheat, a ton of iron ore. Let’s start with those because if we were going to go to some island off in the Pacific, what would you want to take with you? Well, you want to have these basic commodities. That's where we came up with this basic 50. And let's subject that basic 50 to this...
Okay, I want to dig into that more because it's really important, right? Because this is in some sense the issue of, are you randomly sampling the environment? Right? So, like, because you're trying to take a snapshot of human progress, and economic efficiency, and we might want to say, well, do you have the thing—you're taking a snapshot of properly sampled. So you pick 50; why 50, and which 50? And how did you define basic?
Well, we kind of go back to—we start with Ehrlich’s and Simon’s bet and says, "Let’s look at those five," because they both kind of—Ehrlich said, "Well, these are five non-renewables," that you know, they should run out, right? Because they're non-renewable. Let's put those—let's expand that. Then let’s jump out to energy. Let's look at crude oil. What's the price of a barrel of oil? You know, for—the last—we've got really good data on the barrel of oil. It represents this fundamental unit of measurement in terms of the price of energy. And then let's add food to it. Let's add other materials to it. So what's the price of a two-by-four? What is the price of a ton of cotton? What are these basic fundamental commodities? And we were also kind of limited to what we could find out there that had good price data on it, and what we found is you know, you go back to 1980 and you kind of have about 50 of these things that we have good data on that we can use.
And okay, so you found—you found that with 50—that was, well, that's a fairly large number of resources, but it's also—you could get reliable data on 50. Could you get reliable data on a hundred, do you know, or did it sort of top out for you at 50?
Yeah, the further back in time you get, you go—the less data you have on nominal prices. So for example, by the time we get to, um, uh, 1960, we have— we have 37! But we looked at that too; we looked at from 1960 to 2018, and then from 1980 to 2018 just to satisfy those who may be saying that 40-year period is not substantial enough and to—to really do time prices for that data, you need the global GDP divided by the number of hours of work, which we do in part of the book. But then—and this is critical—then we go back to 1850, and we look at prices of commodities and food in the United States from the perspective of blue-collar workers and unskilled laborers.
Now this is very important for a number of reasons. Very often people will say, "Oh, well, you’re using average data, and that's skewed by the rich." Okay, so we'll take those out; we'll just look at people at the very bottom of the income strata, and that's the blue-collar workers working in the manufacturing—and unskilled workers, like for example people who clean the hallways, janitors. Okay? Now we have wage data going back to the 1770s, and we have commodity and food data going back to 1850. So here's what we found. I'm just going to give a few examples. So a blue-collar worker between 1850 and 2018—that's page 157—uh, rice drops in time price by 99%, which means you now have 111 units for the price of one unit.
Uh, pork drops by 98.7%, which means that now you have 75 pounds of pork rather than one pound of pork that your ancestors could buy in 1850. Uh, coffee drop of 98 relative to wages, which means you now get 49 pounds of coffee for the same amount of work that would take you to buy one pound of coffee. Beef dropped by 85%; you now get seven for the price of one. So that’s the blue-collar worker. And we can also look at the least fortunate—in, uh, well, least fortunate employed people in the United States, and that's the unskilled. Again, an example: sugar dropped by 99%, means you now get 107 pounds of sugar instead of one pound of sugar in 1850. Um, rice once again—you get 53. The pork, 35, 36 pounds instead of one. Corn, 26 pounds for the price of one. Lamb, four instead of one. So, you know, you go over these, um, stats, and what you’re finding is that so long as you have the nominal price of a commodity in 1850 and a nominal wage in 1850, and then you come to compare it to 2020 or 2018 or whatever, you can see these trends, and they are the same whether you’re looking globally or in the United States.
Yeah, you said—you say when you're looking at, uh, Jack's 26 commodities here between 1850 and 2018, the average price increased by 57, basically 5,800 percent! So yes, that's personal resource abundance, correct?
Right, right!
And the numeric equivalent of that, the dollar equivalent of that is the average hourly compensation rate rose from six cents an hour to 32 dollars an hour.
So but the PRA (Personal Resource Abundance) index would be a more accurate gauge of that improvement. So the improvement is—it’s very difficult, I think, for modern young people in particular to really understand how poor people were!
Absolutely! Yeah, absolutely! The best, the best example I like to use is the sugar example. And it's like, well, the time it took you to earn the money to buy one pound of sugar in 1850, how many pounds do you think you could get today? I'd love to survey my students on this, and they'll say, "Oh, like two pounds or four pounds." You get 227 pounds! It might explain why we're also fat is because sugar has become just tremendously abundant.
And you know, but it's not just sugar; it's all these other ones. You know, the average price has fallen by 98%, which means, you know, for the time it took you to get one unit, you get 50 units, right? Right, right, right, right, right!
So, and so, okay, and so well, let's continue with this. So why super-abundance? Why that title?
Well, I—I—should I take it? Okay, I feel like I'm talking too much; you should tell me to shut up! But look, um, it's very simple. If Ehrlich was right, which he wasn't, abundance of resources would be declining. Simon was right; abundance is increasing. But abundance can increase at two different speeds. If abundance of resources, what we call personal resource abundance, is increasing at a lower rate than population—so if population increases by five percent, but personal resource abundance is only increasing by two percent, we call that increasing abundance. But if population is increasing at five percent, but your resource abundance is increasing by ten, we call that super-abundance!
In the book, we looked at hundreds of commodities, goods, and even services going back all the way to 1850. Eighteen different data sets that we got from third parties mostly, so that we are not accused of cherry-picking. Not all of them, but most of them. All eighteen data sets have been growing at a super-abundant speed, which means that our wealth—this abundance is increasing faster than population. And what that tells us is that on average, every human being contributes more than they consume. We are destroyers, but we are also creators. And it turns out that we are more of a creator than we are a consumer or a destroyer. We create wealth!
And also that the rate at which that is true is increasing rather than decreasing. It is! So our data suggests that the early data sets going back to 1850 and so on, there we have these increases in abundance of resources at about 2.5 percent per year, um, compounded growth rate. But by the time you get to the 1980s and beyond, you get to about 3.5 percent.
So, okay, so now we can tell parents that means we can tell parents that not only is your child not going to be a net drain on the world's resources—you're not going to make other people poorer and the planet more barren by bringing another child into the world—that you're actually doing a positive good! Is that if you have 10 children, everyone will be somewhat richer because of that! The chances that they will be richer, and the chances that one of those 10 babies is actually going to be able to contribute something substantial to the welfare of human beings is higher than if you just have one child!
Right, right! Wouldn't that be lovely? And I do believe that it's the case! You know, so it's really—that's really something to be able to tell people! You know, I watched in my own life people react—certainly not positively—to pregnant women talking about their babies they're going to bring into the world. It's so awful to see, you know! It's, well, how—you know, and parents themselves, they have this discussion they have with themselves, I suppose.
A particular moral conundrum for young women is like, well, do I really want to bring a baby into a world like this? And the answer is, well, it's a world that's getting better, and your baby will probably have a better time of it than you did or there's a reasonable probability that, but your baby will also be a net good for everyone else, really. Not in some naive, idiot Hallmark greeting card simplistic way, but really, actually solidly. And in spite of all the doomsaying of the Malthusians and the apocalypse and, uh, the anti-capitalists and so forth. So that’s a lovely thing to be able to tell people.
And that brings us really to the importance of innovation, where I think Gail really contributed heavily to that particular chapter. So I think that I wouldn't mind if he wanted to talk a little bit about innovation, if you don't mind.
Yeah! So here's the idea. As we begin our model thinking about, you know, it begins with human beings, and we focus on that because the only source of new ideas are human beings. And those ideas really entail how do we create new knowledge with these capitals that we have? We define capital as anything we can use to create something of value. So you have physical capital, human capital, intellectual capital, financial capital, cultural capital.
And so I begin with this idea when I can actually manifest that idea and convert the idea into something real, it becomes this thing we call an invention. But in order for a taxi move into this innovation level, it has to go through the market, and the market is really where you take these things and they're tested to see if you've truly created value. And if it creates value, then this invention becomes an innovation, and it's in our progress is entirely due to our ability to innovate.
Okay, so Lomborg has showed this—I think this dovetails with your work—so when Lomborg's done his return on investment rank ordering of solutions to the problems that beset us, he showed that the highest return, his economists calculated for investment in the future was investment really into early childhood care. Some of that was early childhood nutrition, and part of the reason for that, as far as I can tell, is that, well, if a child's growth is stunted in early life because of malnutrition, one of the things that happens is they don't develop their intelligence, their intrinsic intelligence, to the degree that that's possible. So there's been a walloping increase in the average IQ of the human population over the last century, and a huge part, especially at the lower end, which has been brought up. And a huge part of that is that, well, there’s just so many fewer people suffering from absolute privation.
And so if the most valuable resource that we have is the capacity to innovate, then the most—the most logical problem to target is that which might interfere with the development of, say, general cognitive ability in childhood. And it turns out that that's actually quite inexpensive to foster. And so that fostering of innovation—there's lots of things that have to do that, but one of them is definitely a concentration on early childhood nutrition, let’s say. And it really goes back to this ability: can we get people to be able to learn more or discover and create new knowledge? And if they're healthy, if they have light, if they have these fundamental physical needs met, then they get on these learning curves.
And the interesting thing about a learning curve is whenever you double the output of something, cost per unit falls between 20 and 30 percent. And so you're really seeing the more we make, the cheaper that we can make them. So, we think about how do we actually grow an economy? Moore's Law, we refer to that all the time, but it's really a function of quantity. It's not a function of time! It's because we're making these chips at such high quantities. Every time we double production, that cost drops by 20 percent. We're just making trillions and trillions of these chips.
Well, this is okay! Tell me what you think of this, guys. So I've been thinking about justifications for inequality—economic inequality. Because you have absolute privation as a problem, and the free market is really good at ameliorating absolute privation—there's no doubt about that. But there's still a fair bit of relative economic inequality. And so you might say, well, do we really need to people who have billions of dollars? I think, well, we might need Elon Musk! Like, you know, that's—that's something we could all think about. But in any case, here's a reason we need some people to be extremely rich.
I mean, when cell phones first came out, I think they were like $150,000 a piece when they were hooked directly to a satellite network. You know, they're big and bulky, and only the most wealthy could clearly afford them and use them productively, given their great expense. But what was—what like five years later, everybody had one! And now they're not just cell phones; there's these stunning technological miracles that are—well, they're just beyond comprehension what those things can do. But it isn't obvious to me at all that everyone could have ever got one if only a few people, you know, if we weren't willing to put up with the fact that only a few hyper-wealthy people could have them to begin with.
And maybe we can't get really innovative technological—we can't really make innovative technological progress at the commodity level unless we have pools of people at every level of wealth so that we can produce a market for something new among the hyper-rich, before we can produce enough of it so that everybody can have it. And so is—is that—would that mean that inequality—does that imply that economic inequality is actually a prerequisite for the mass production of highly complex technological gadgetry, let's say, for everyone?
Yeah, you know, yeah, here's what I'd say, Marion, is, uh, look. These new innovations come out, and you have typically these significant fixed costs up front to make the first year. Yeah, yeah, yeah.
And who pays for that? The rich pay for that! And then the marginal cost—not the cost to the next one—that falls dramatically! Think about software! Think about some of these apps that cost you a million dollars to create the app. But the cost for the next copy is a few cents! The first one cost the first one. It costs you, you know, 100 million dollars, and the millionth one costs 15 cents! But you have to get—you have to ratchet your way down that price ladder!
Yeah! And then—well, you think too! And then if it wasn't—you could say, well, maybe government pools of capital could manage that, but it's not the case because, like, government isn't going to buy enough massive flat-screen TVs when they first become available because the government doesn't consume like an individual, whereas a rich person in some sense does, right? Because they'll go after consumer products!
And so I don't think we can replace the benevolent utility of some people with massive pools of capital with any communal replacement. See, that’s—I think the difference between rich and poor is five years! Yes! Yes!
You know, I get it! Today, well, everybody's going to get this in five years, yeah! And maybe in ten years it'll be two years. I remember very distinctly a conversation I had with a very close friend of mine about 20 years ago. We were driving, and he said, "How long before access to the internet becomes a basic human right?" And of course today, in the United States, government pays people—who cannot afford access to broadband internet out of the government pocket. It has basically become a basic human right as far as Americans are concerned.
Let me say one thing about that! By that, I don't mean that I buy into—into these things as human rights. What I'm saying is that people perceive it as a human right. But I think that the importance of the discussion between equality and inequality is actually much deeper than that. Equality—I’ll be very frank—equality is stasis. It's another word for stasis! Inequality is—in my view—the midwife of progress!
Well, certainly the midwife of trade, because if we're completely equal, we have nothing to trade!
Ah, well, yes, but—but in so many different ways, uh, inequality is the midwife of human progress. By that I mean primarily material but maybe some other as well. Let’s say that you have a society which is completely static. I’m just going to come up with an example of everybody living in a cave, and then somebody decides, "Well, I have this great idea of actually building a hut on a hill with a better view," and so forth. There is an inequality of housing there going on for a little while whilst other people realize that they can improve how they live their lives.
Um, in production—in, uh, in even in personal behavior, if you have a society which is static and doesn’t change and somebody realizes that, "Hey, maybe this form of behavior, like learning reading books, can lead to a better life," that in itself is a way of inequality! When a company decides that instead of relying on human labor creating pins, we are going to buy a machine that is going to create an inequality or production process, but that is in itself going to move the society forward.
So, right, so you're kind of—so you're basically pointing out that as positive change begins to manifest itself in a society, it first manifests itself as a marked inequality. It has to because it can't appear everywhere at once! Yes! Because so—so, and the equality basis, it means that everything is the same, and inequality is the disrupter. It tells people that things can be done differently.
Now some people make stupid choices and they suffer the consequences, but if those choices are good, you can become fabulously rich or important in your community because you have figured out a better way of living. And then other people are going to have that five years down the road if you're a reasonable market player!
Yeah, yeah, definitely! So the other thing I would add to this is we go back to something real basic, and I think you have income inequality, but you also have time inequality. And when we look at that from that perspective, it looks much different! So go back to 1960, go to India—a typical Indian would take about seven or eight hours a day to just earn the money to buy their daily rice.
And in the United States in 1960, it would take an hour to buy the wheat. And so both of these commodities have fallen by 90%. Their time price. So who's better off? Well, the guy in the—in, in India, he used to spend eight hours; now he spends only one hour! So he picks up seven hours. The guy in the U.S. spent an hour, and now he only spends six minutes. He only picks up 55 minutes.
So the difference in time—right? Time inequality gets really compressed when you have this innovation on these prices, especially when you're dealing with these basic fundamental food items. The poor are the primary beneficiaries of that because now they have so much more time relative to where they were 20 or 30 years ago to now go learn and pursue and be creative. And that's the beauty of time prices—not only is it immune from governments fiddling around with inflation numbers, but also you can make international comparisons. You no longer have to figure out what is the exchange rate between the American dollar and the Indian rupee.
Look at the minutes that the people work there; look at the minutes people work here, and that will give you a sense whether inequality is increasing or decreasing! Right, right, right!
Okay, well, let’s try to cover two more things before we finish. We haven't got to part three of your book, so that's Human Flourishing and Its Enemies, so I want to talk about that. And then, um, the other thing I'd like you to discuss is, well, how is your work being received both publicly and by other economists?
So let’s start with the close of the walk through your book, and we'll go through part three, Human Flourishing and Its Enemies. You have four chapters there. One is Humanity's Seven Million Year Journey from the Rainforest to the Industrial Revolution. Chapter eight is The Age of Innovation and the Great Enrichment. Chapter nine is Where Do Innovations Come From: Population Growth and Freedom? And then The Enemies of Progress: From The Romantics to the Extreme Environmentalists. So I'll let you guys comment on part three first, and then let's go to reception of your work and your hope for these ideas as well.
Can I back up to part two real quick? Absolutely! Take another piece of the story that we want to tell! All right! So we’re going to go back to a bit of section two. Gail's gonna take us on a journey through the remainder of section two.
Okay, so if you're on page 222, you'll see this box that we developed, and the idea is if we can take and measure—let's put population on the horizontal axis and let’s put personal resource abundance on the vertical axis. And then let's look at 1980 in, say, 1980 and let's just index the personal resource abundance and population to a value of one. So that red box represents the size of the global resource pie in 1980.
So two things happen: First of all, your personal resource abundance is increased by 252 percent, so we go up on the vertical axis, but population also increased by 71 percent. So you go out on the horizontal axis. So that's a stunning graph! It is a stunning graph! It really makes me realize that it's not 1980 anymore. Not 1980 at all!
So when you combine those two, the red box is the 1980 Global resource pie; the 2018 green box is 2018, and you look at the difference. And you can measure those two in our total abundance that green area—that's 500 percent larger than it was in 1980! So the compound annual growth rate of this population-level resource abundance is—is almost 5 percent a year. And what's interesting about that is you look at the elasticity—in other words, if I increase population by one percent, what happens to personal resource abundance? And we see there that for every one percent increase in population, your personal resource abundance increased by three and a half percent. And the biologists must just hate you guys, eh?
Well, here's the deal: Once again, the biologists would have been right if they would have considered knowledge as the key unit of measurement instead of atoms! If you measure knowledge—so, information rather than just pure matter, right? It's this knowledge that can grow—not only can it grow, it can be shared with another person! That's not rivalrous! In other words, you and I can share the same knowledge. So we get this ability to create this substance that we can share with each other that doesn't—you know, if I have a Snickers bar and I give it to you, I lose it, but knowledge—there's no reason for that.
There was no reason for the biologists to presume, except that they used bad animal analogies, let’s say, that the same units of biological activity would necessarily require the same units of cost. I mean, so we're not well modeled by yeast, and we're not perhaps well modeled by rats because we have this capacity to abstract. A good biologist would say, "Hey, that's a fundamental transformation in the nature of biological reality." It's not something that can just be hand-waved away. And Malthus did not take that into account. And that means he was wrong biologically—not just economically.
And I think, as I said before, the evolution of the prefrontal cortex is a good exemplar of