More Perspectives on Progress

in life •  5 months ago

Yesterday we saw how GDP per capita has improved over the centuries and accelerated dramatically after The Enlightenment. Since higher GDP per capital correlates with a number of quality of life metrics, it’s an important measure of human progress.

Those who try to refute the significance of this progress often point to growing income disparity as evidence that something is terribly wrong with the system. But is a growing relative income disparity truly an indicator of economic or societal illness? Or might it instead be a natural consequence of economic progress?

As Pinker states in “Enlightenment Now”:

The starting point for understanding inequality in the context of human progress is to recognize that income inequality is not a fundamental component of well-being. It is not like health, prosperity, knowledge, safety, peace, and the other areas of progress I examine in these chapters.

Said another way, there are moral implications when people are deprived of basic healthcare, sustenance, education, safety, etc. They are undeniably “worse off” when deprived of these things. But does the fact that someone else has more than me, perhaps much more than me and increasingly so, make me any “worse off” provided that I have “enough” and more than yesterday?

Modern intellectuals (most often Leftist statists) harp on inequality in hopes of disproving the benefits progress, largely because it’s one of the very few things that they can harp upon. For instance, noting that the poorer half of the people control only 5% of the world’s wealth today, the same as in 1910, Thomas Piketty argues in his book “Capital in the Twenty-First Century” that the poorer half is “as poor” now as then. His implication is that all progress over the last century has inured to the benefit of “the rich.”

However, as shown yesterday, the world is far, far, far wealthier today on a per capita basis than it was in 1910. The bottom half today enjoy a standard of living that is simply incomparable to the bottom half of 1910, and this is triply so once welfare and social services are factored into the equation. As discussed yesterday, UN statistics show that the percentage of the population living in extreme poverty has declined from more than 90 percent from circa 1900 to less than 10 percent now. Is the bottom half really “as poor” today as in 1910? Clearly not. Not even remotely close.

The simple and unavoidable fact, one always overlooked by Leftists, is that progress is “lumpy”. It happens in fits and starts, and there are ten failures for every success. This is true because progress, innovation and discovery ultimately come from risk-taking. Capitalist society’s progress much more rapidly than Communist ones for the simple reason that risk-taking is incentivized in the former and discouraged in the latter.

In capitalist systems, more people take more risks and therefore develop more innovations in a given amount of time. Capitalism incentivizes this risk-taking by permitting people to tinker in whatever fields interest them (free from the constraints of central planning) and by affording discoverers and innovators a large share of any resulting profits. Potentially large upside gains are offered to the entrepreneur in exchange for the entrepreneur (rather than society as a whole) bearing the loss when, as is most often the case, the venture fails. (Obviously I’m distinguishing true capitalism from corrupt Crony Capitalism where losses are socialized via “bailouts”).

By contrast, Communism depends upon central planning. The empowered planners dictate the work of the people to a much greater degree. There are therefore few incentives for either the planners or the people to assume any risk of innovation. And when then central planners do take risks that don’t pan out (which is most often the case with any risk), everyone suffers because they are in the same centrally-planned boat. So, not only are individuals in communist systems denied the upside benefit that comes from any successful discovery, but when something goes wrong with the government’s “Five Year Plan”, everyone in society (and not just the risk-taking entrepreneur) absorbs the massive losses.

Risk-taking is unquestionably the engine of progress. Capitalism encourages innovative risk taking systemically while Communism represses it. In the authentic capitalist system, outsized rewards are enjoyed by the few successful entrepreneurs (French for “risk takers”) who develop radically new technologies that transform society and ultimately alleviate poverty. Therefore, the more quickly and extensively the capitalist economy is innovating (1) the greater and more frequent are the outsized rewards to the entrepreneurs from their wealth creation (resulting in rapidly increasing wealth disparity in relative terms), and (2) the faster is the reduction in poverty (as all of society ultimately benefits from the new innovations and higher levels of productivity and wealth creation). Increasing wealth disparity is therefore a sign of a healthy capitalist system, or at least it can be. (Admittedly it can also be evidence of corruption and Crony Capitalism).

To conclude, there’s nothing mortally wrong with increasing wealth disparity when the rising tide is lifting all boats, including the smallest ones. Likewise, increasing wealth disparity is not necessary a sign of a sick system. In fact, it could be important evidence of an exceptionally healthy and innovative one. Progress must be measured by improvements in the lives of the masses and not by the extend of the disparity between the richest and poorest.

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I support the concept that rising tides lift all boats, and that wealth disparity is not wrong. But thats not something a modern social justice advocate would even talk about. Back in the day, having a roof over your head thats constructed of mud and straw was considered well off. Over time it became stone walls, then wood, then somehow it evolved to just having shelter.

Right now if you have the following, are you really considered poor?

  1. Food (most countries provides some welfare level of nourishment)
  2. Water (most developed countries have this readily available, be it bottled or from the tap)
  3. Social Safety (most countries have local law enforcement).

What more could you ask for?

Well, it happens that modern society is starting to address certain things like the poor are poor because they lack the education to rise from it. Or society creates a blanket to weigh the man down because of socially constructed oppression. And all of this is caused by capitalism. Its a bit absurd, but that's the modern issue and their progress is how do we move away from that.

I don't think most see the bigger picture of how far we've gone and how far we can go in terms of bringing everyone to a higher standard.

Actually growing relative income disparity is the sign of corruption in the goverment,increasing of the political corruptions in the poor countries...

i agree with you about "risk-taking is unquestionably the engine of progress." taking-risk is indepented from the regime. Because how the corruption is corruption whatever the regime it is also the same with the taking -risk situation. No differences...They both have cons and pros of course...

" Progress must be measured by improvements in the lives of the masses and not by the extend of the disparity between the richest and poorest." i think this idea is totally wrong because of the it is not equal for the poor and rich.Ok they both don't earn the same money,ok they live different houses or have got different cars but basic needs ( for example education, health , justice ) are different then there is a big problem . What is normal if a child would go to a bad school just because of his father's income is low then i just ask where is the justice in education?

Thank you for sharing and have a nice day my friend...

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Actually growing relative income disparity is the sign of corruption in the goverment,increasing of the political corruptions in the poor countries...

This is the modern view of why it occurs, but I think income disparity will always exists. Its a matter of whos on which side, and how much of society is caught on either side. Without a doubt capitalism has boosted everyone to a higher standard, but also made the gap significantly wider. But I think its moved more people from the lowest bracket up.

What is normal if a child would go to a bad school just because of his father's income is low then i just ask where is the justice in education?

People on one side will often say that education is not a right, therefore justice is not necessary. You are born into a situation and society does not have a job to give you better education, just equal. If you happen to live in a lower income neighborhood and your school is bad, then that's your parents fault for not having done more to put you in a better situation.

It sounds cruel, but then lets look at the schools. Are they bad because the community of students are bad? Is it the local community attitude towards school? Or is it because we are failing our teachers? Is funding really THE issue? Or is it how we are teaching our kids from the home to the school itself?

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Firstly if we are modern people we need to agree that we all must be equal ,at least equal
for health , education and justice in this world.As you you know when a person is born ,it has some rights in a social goverment and equal education for everone is one of the duty in the social goverment or country. So actually yes pre-education is responsibility of parents before the school. So i am against to the private schools and education with money.Because this situation influences the justice between the rich and poor children in the begining of the life. Because when someone is born he/she cannot choose his/her family which is rich or poor. So i believe every one must have a good and equal education.Of course

"If you happen to live in a lower income neighborhood and your school is bad, then that's your parents fault for not having done more to put you in a better situation."

Firstly bad neighborhood reason is the poor goverment and poor goverments feeds the people's ignorance . Think the country a body and you want to make this body stronger. If you make legs , your legs will get stronger if you make chest your chest. But these progresses are wrong you need to get your body entirely stronger and also your mind. If you can do then you will be stronger. So the education is one of the constituents that creates the body. Of course that is my idea.

have a nice day my friend...

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I don't think that we have a basic human right to education BUT! Under a modern social system, I would agree that there should be a basic level of education that society provides. I would also add that the quality of that education is not required to be the best, but rather it should serve to provide the basic education necessary to become a higher member of society.

That being said, I support private schools for those who can afford them and I expect them to do things far greater than what public schools can afford.

I don't think most people would argue against that, they would only argue around the definition of what "basic education" means.

(FYI, you can use the greater than arrow command to quote things)

Firstly bad neighborhood reason is the poor goverment and poor goverments feeds the people's ignorance .

I don't think the full reason to why bad neighborhoods exist can be captured in 1 sentence like that. Its not just poor governance, its also a lack of community, and the creation of a community is solely up to the community members.

Its my belief that capitalism pushes capital away from those areas because there is no economic advantage to being there. By that same account, people are responsible for their own success if they are all given the same baseline tools (basic education). The complexity is that there is also social unjustice keeping the poor down. Thats the difficult part.

More often than not, people who are rich, they just think and do more than those who are poor. And their wealth is well deserved. It happens often, but not always. Poor people are so absorbed in their mood of the poor that they are too lazy to develop and raise their ass from their poor room. I think that in our modern world there are many ways to improve your life. Do not become a millionaire in 1 day, but at least stop being below the poverty line is feasible to many. But many people do not want to get out of the mud and poverty, they are accustomed to sit there and shed tears about their bitter fate. I'm not talking about everyone, but that's how the big half lives.

"Progress must be measured by improvements in the lives of the masses and not by the extend of the disparity between the richest and poorest."
I love this main idea. again an excellent article.
congratulations

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Risk taking has made a lot of people millionaires and has made a lot of people lost what they had... Thats why no one should test the deep of the river with both feet

No one will ever be satisfied if you really think about it. Whether your on top, on bottom or somewhere in between(didn't in between used to be one word?) there will always be the mind set of more. Yes, the poorest of us are far better off today than we were 100 years ago or are they?