On Saturday I argued (seriously) that economic progress in the United States over the past century has been so great that the typical middle-class American today is materially richer than was John D. Rockefeller a mere 100 years ago. That is, within the lifetimes of many people who are still alive, economic progress has been such as to make most Americans more prosperous than was the most prosperous American of 1916.
I’m struck by a couple of reactions to that post.
First, I’m struck that that post sparked a handful of people to call me (in the words of one) “a shill,” presumably for … for…. Well, as I think about it, it’s unclear just whose narrow material interest such post might serve. Regardless: nowhere in that post do I offer an explanation for why this wealth explosion occurred. Not surprisingly to regular readers of this blog, I believe that this wealth explosion is the direct consequence of markets left sufficiently free within a culture sufficiently keen on market-tested innovation (to use Deirdre McCloskey’s term). But perhaps I’m mistaken on this front. Perhaps this wealth explosion is instead the direct result of the policies of TR-WW-HH-FDR-LBJ-BHO. Or perhaps it’s the result of yet some third, other force. For purposes of that post the cause is not relevant: the point is that, objectively speaking, ordinary Americans today probably are richer than billionaires by the standards of 1916.
Second, I’m struck that many people do not understand that most of our modern wealth is the ‘summation’ of many small innovations, any one of which is not very significant. One commenter, for example, suggested that the absence of reggae music (which music I mentioned in my original post) would not really be missed by many people today. That commenter is correct on the narrow point but incorrect on the larger point: we would all miss the accumulated and combined ‘small’ products of modernity.
Relatively few of our modern advances are so singularly momentous that their introduction alone creates a noticeable impact on our lifestyles. These “relatively few” large-impact innovations that have occurred since 1916 include antibiotics (that’s probably at the top of the list), harnessing the electromagnetic spectrum for purposes of communication, jet propulsion for aircraft, Norman Borlaug’s green revolution, the microprocessor, and the Internet.
Note, though, some of the things that are not on this list — for example, the automobile, the telephone, and harnessed electricity. These things existed before 1916, yet they were only just then becoming widely available. Yet they were made widely available only by a series of relatively small innovations — some in the hard sciences, some in industrial organization and logistics, some in management techniques, some in finance. Take away any one of these ‘small’ advances and the world is not noticeably a poorer place; take away many of these advances and the resulting impoverishment is palpable. Put differently, the widespread availability of these (and other) ‘big’ visible things itself requires a whole host of ‘small’ unnoticed innovations and advances, very few of which are individually vital, but which, when taken together, are indispensable.
The bulk of our modern prosperity, it seems to me, is the product of — or can be dissected into — small advances that are easily dismissed by careless thinkers as contemptible. (‘Who needs reggae?!’ ‘So what if Wal-Mart shaved a few fractions of a cent off of the cost of offering for sale each dollar’s worth of athletic socks, living-room lamps, and toasters?!’) Remove a drop of water from the ocean and the effect is unnoticeable. But keep removing drops of water. Eventually the ocean will run dry. Our prosperity pool would be a poverty hole.
Look around your home, Mr. or Ms. Ordinary American of 2016. Observe. Do you see those paper towels in your kitchen? While techniques for making paper have been known for centuries, the familiar roll of household paper towels first appeared in 1931. And guess what? If neither Arthur Scott nor anyone after him had ever had the creative idea that resulted in disposable paper towels — if today our world as we know it would be as we know it save for being without rolls of paper towels — we would not be much poorer than we actually are. The reduction in our prosperity that would occur were we suddenly to be stripped of our paper towels would register hardly at all in our psyches and would register not at all in any official statistics.
Ditto for those fresh blueberries that you, in your Boston or Chicago home, ate this February morning at breakfast. Ditto for the plastic, protective bag that covered the newspaper that you fetched this morning off of your driveway. Ditto for the ten-percent that you saved on the price of the jeans that you’re wearing because Wal-Mart arranged improved logistics for handling its inventory. (By the way, even if you didn’t buy your jeans from Wal-Mart, Wal-Mart’s lower prices on jeans pushed down — through competition — the price that you paid for your jeans.) Ditto for the improved audio of your television. Ditto for the four different varieties of sausage now in your freezer — packages of sausage sitting on a freezer shelf just below that box of pretty-darn-tasty frozen samosas. Ditto for the draw-string embedded within your odor-resistant and surprisingly strong plastic kitchen garbage bag. Ditto for the plastic (that is, not glass) bottle of shampoo in your shower. (When I was a teenage boy I cut my foot pretty badly on a piece of glass from a bottle of Prell shampoo that broke in the shower of my family’s home.) Ditto for the easy-to-start engines on your snowblower and lawnmower. Ditto for the wi-fi that you’re probably using now — you having forgotten that, in the not-too-distant past, to be on-line required a literal line of wires.
Ditto for the increasingly familiar Keurig pod and the machine that turns its contents into coffee.
Ditto for nearly all of it. Ours is a world of marvels. And nothing about these marvels is more marvelous than the fact that these marvels are so familiar and inexpensive and available to hoi polloi that intellectual fashion practically commands us — particularly us oh-so-perceptive intellectuals — to ridicule these marvels as contemptible baubles.
This item first ran on CafeHayek.com.
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