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The case for optimism

By January 15, 2023No Comments

Some economic perspective…

During the Middle Ages, an English laborer had to work 80 hours to pay for a pound of sugar. By 2021, an English laborer had to work only 1.89 minutes to do that. In 1800, it took 5.4 hours of work to buy 1,000 lumen-hours; in 1992, it took only 0.00012 hours of work for someone to light their home for six weeks.

Since 1970, the share of American workers in high-skill jobs has increased from roughly 30 to 46 percent. Another result has been the continued superiority of the American university system. According to U.S. News & World Report’s rankings, eight of the top 10 universities in the world are American.

based on Congressional Budget Office data, that real median household income grew by 26 percent from 1990 to 2019. When you throw in social benefits such as Social Security and unemployment insurance, median household income increased by 55 percent. For those in the bottom fifth of household income, the after-tax and transfer-income growth during that period was 74 percent. Strain observes in his book The American Dream Is Not Dead that three-quarters of adults raised in working-class homes have a higher inflation-adjusted income than their parents did. In 1993, 28 percent of American children lived in poverty. By 2019, that number was down to 11 percent.

In 2011, for example, $45.4 billion of venture capital was invested in young, innovative American firms. In 2021, $332.8 billion was invested in such firms.

Carbon emissions per capita have plummeted this century; we are now back down to levels from the 1910s. The cost of flying across the country has fallen roughly fivefold since the mid-1970s.

And I’ve yet to mention the two most impressive innovations of recent years—mRNA vaccines and the stunning gains in artificial intelligence. Who knows where AI will take us, but in the short term, it means that everybody can have a somewhat well-informed personal research assistant. As Tyler Cowen notes, we’re in the middle of a radical increase in the amount of intelligence in the world.

One map showed the locations of 56 mega-investments of more than $1 billion each—investments in auto, semiconductors, clean energy, and the like. Only two of those investments are in California; six are in Illinois, and five are in Iowa. After years of capital and wealth fleeing to the coasts, there are now signs of a rebound in the places that were left behind.

David Brooks writing in the Atlantic

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