Reasons why life will get better
Reasons why life will get better

All that separates us from the living standards of the poorest Africans are a couple of hundred years of capitalism induced productivity gains.

The number of people subject to the incentives that created these productivity gains were for the vast bulk of the period far less than now. Most inventions were the product of the UK, US France and Germany. These countries had much smaller populations in the past. Furthermore most of these much smaller populations were also effectively “outside” the capitalist incentive system – domestic servants, tenant farmers, housewives … etc with little knowledge or opportunity to create new productivity improving knowledge.

There are now vastly more people subject to some form of capitalist incentives in India, China, ASEAN, South America and Eastern Europe …etc. Thanks to the internet they are also far more likely to have access to the latest/best way of doing things. Again thanks to the net improvements they create will be dissipated through the global economy far faster than ever before.

Most productivity gains result from the tinkering of existing process or doing something new with old/existing product knowledge. There has been and is a massive and ongoing increase in the discrete items/knowledge/process that can be manipulated to create something new. The number of ways discrete chunks of “knowledge”, be they tangible or intangible, can be recombined grows hugely as the number of items increases i.e. if there were only 16 discrete items then there would be 16 × 15 × 14 × 13 … = 20,922,789,888,000 potentially productivity increasing combinations.

Therefore there are vastly more people operating under the incentives to make vastly more possible permutations and combinations of productivity increasing opportunities. Productivity and hence our standard of living will increase. This holds even if Europe and America “re-tribalise” or otherwise stop being an initiator of productivity gains.

Europeans and Americans will still benefit from the productivity gains developed elsewhere in the world as after a lag they will be implemented in Europe and America. Just as over the last 50 years US initiated productivity gains have been copied in Europe, effectively “yanking up” their productivity levels. This also makes a farce of the literature comparing GDP per head between the US and Europe. Of course the latter will increase in line with initiatives generated or spread by the former. This can not be used to argue that the US should adopt European pseudo-socialist structures. Someone has to be the initiator of new ways of doing old things or old ways of doing new things. People operating under capitalist incentives with access to tangible or intangible “knowledge” are the key.



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