5 questions for Ronald Bailey on how the world is improving over time | American Enterprise Institute

Angelena Iglesia

When one looks at the data, it becomes clear that the world is dramatically improving over the long term. So why are people so pessimistic about the future? Ronald Bailey recently joined the Political Economy podcast to explore this question. Ronald is the science correspondent for Reason magazine and Reason.com. […]

When one looks at the data, it becomes clear that the
world is dramatically improving over the long term. So why are people so
pessimistic about the future? Ronald Bailey recently joined the Political
Economy podcast to explore this question.

Ronald is the science correspondent for Reason magazine and Reason.com. He’s the co-author — along with Marian Tupy — of the upcoming book, “Ten Global Trends Every Smart Person Should Know: And Many Others You Will Find Interesting.” He’s also the author of the 2015 book, “The End of Doom: Environmental Renewal in the Twenty-first Century.”

Below is an abbreviated transcript of our conversation. You can read our full discussion here. You can also subscribe to my podcast on Apple Podcasts or Stitcher, or download the podcast on Ricochet.

Pethokoukis: Why aren’t people as optimistic as you? Why
don’t they understand that the world is not terrible and has actually has
gotten a lot better?

Bailey: The problem is that we have psychological glitches
that bias us against reality and in favor of pessimism. For one, we have an
evolutionary tendency to worry more about how things could go wrong than to
think about how they can go well. As an anthropologist explained to me, “Back
in evolutionary times, guys who ignored a rustle in the bushes when it turned
out to be a lion are not our ancestors. Instead, the people who ran away from
possible lions whenever they heard the wind rustle are our progenitors.”

Another problem is that progress masks itself over time. All
these things that were terrible problems two or three generations ago — sanitation,
infectious diseases, warfare — they fade into the background as they become
less of a problem, and we forget about them. So we only see our current
problems, and we don’t compare the lesser magnitude of those problems with the
huge problems of our ancestors.

Via Twenty20

Your book discusses the “great enrichment” — how over the
last 200 years the global economy has grown to make us far better off today by
many, many multiples.

I have found out that some people are just skeptical about this data, and they don’t think it’s actually much better. They say something like, “Well, maybe we have better gadgets. But maybe in all other ways, life is too hurried, or there’s more pollution.”

It’s hard not to be astonished by how well-off humanity
has become over time. Only 200 years ago, the average per capita income on
planet earth was about $460 a person, and that has grown to an average of
almost $15,000 per person — a huge increase in human welfare.

Think about people living in America in 1900. The average
life expectancy then was about 45 years, and now it’s almost 80 years. And think
about what John Rockefeller couldn’t buy at the time. He couldn’t have a cell
phone, a computer, or antibiotics. He couldn’t have heart surgery, and he couldn’t
travel to Europe in less than six hours. No amount of money could purchase air
conditioning, reliable refrigeration, or electricity. That’s how much we’ve
improved. Again, progress is masking itself because we take for granted the
good things that we have now.

Over the last
40 years, we’ve seen a big decline in global poverty as more developing countries
have opened their economies and gotten wealthier. When I write about this,
people respond, “Good for China and India, but what did American workers and
communities get out of this?”

That is an example of zero-sum thinking — that there’s
only so much money or resources in the world, and if some people get some then
the others have none. That’s not what happens. As human ingenuity spreads
across the globe, we are all able to benefit from the developments in other
countries. A huge part of the great enrichment has been this global spread of
free trade and competition.

Now, of course, as this happens there will be losers
temporarily when industries shift. I can’t say that everybody is better off at
all times because that would be a miracle, and that is not the way the world
works. But on average, because of free trade and because of the spread of
industry across the globe, Americans that are home are living a lot better than
they used to.

What do you make of the argument that Earth is going to
overpopulate and run out of resources, so economic growth needs to end in order
to save the planet?

This line of argument fails to recognize that growing the
economy does not just mean using more stuff all the time. Instead, what we do
is use our ingenuity to extract more value out of less and less stuff over
time. As we demonstrate in the book, the United States and other advanced
economies are already de-materializing. That is, we’re using less and less
stuff to get more and more of what we want out of life.

Think about how much was de-materialized into a cell
phone. You used to have a camera, a phone, a tape recorder, a radio, a
television, and so on. That is all now in your phone. That’s just one example
of how we’re de-materializing. If autonomous vehicles come into existence that
will enable a transportation system where a single autonomous automobile would
be able to supply the transportation services for 10 to 12 people a day at
one-tenth the cost, shrinking the US automobile fleet by 90 percent.

So basically, we grow the economy by using our ingenuity. And
in fact, humanity will be withdrawing from nature over time —most people will
be living in cities by the end of this century, and a lot of the land that we
currently use for food or extracting resources will have reverted back to

What if we stop innovating and progressing? After all, we’ve
seen weak productivity growth for decades. What if our luck runs out, the next
round of meaningful innovations just doesn’t happen, and we’re stuck with a
world of shrinking opportunity?

This is possible if we make certain kinds of very bad political and ideological decisions. Governments can keep people poor. But I don’t believe that’s the way it’s going. Our book shows the advance of capitalist democracies over autocracies around the globe. While there has been a bit of a stutter in the wake of the financial crisis, we fully believe that relatively well-governed, free economies will slowly but surely take over the rest of the globe. And most people will be able to enjoy both civil and economic freedom by the end of the century.

This is how progress occurs — by allowing free markets and civil democracies. If those open institutions are maintained, then innovation is its product. So I don’t think the end of innovation is going to be a problem.

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