Recently I have been working my way through Eric D. Beinhocker's Origin of Wealth: Evolution, Complexity and the Radical Remaking of Economics. Early in the book, Beinhocker comments on a study by J. Bradford DeLong.
According to data compiled by Berkeley economist J. Bradford DeLong, it took 12,000 years to inch from the $90 per-person hunter-gatherer economy to the roughly $150 per-person economy of the Ancient Greeks in 1000 BC. It wasn’t until 1750 AD, when world gross domestic product (GDP) per person reached $180, the figure had finally managed to double from our hunter-gatherer days 15,000 years ago. Then in the mid-eighteenth century, something extraordinary happened – world GDP per person increased 37-fold in an incredibly short 250 years to its current level of $6,600, with the riches societies, such as the New Yorkers, climbing well above that. Global wealth rocketed onto a nearly vertical curve that we are still climbing today. (9)
That is to say, with regard to per capita GDP.
10000 BC = $90
1000 BC = $150
1750 AD = $180
2000 AD = $6,600
Remember that the world population grew from less than a billion in 1750 to more than 6 billion in 2000.
Based on UN data I linked last summer, this prosperity is spreading throughout the globe. The UN defines poverty as living on less than $1 per day. Based on historical data and projections, here are their estimated percentages of the world population that is living in poverty:
1970 = 38%
2000 = 19%
2015 = 10%
Again, remember that the population will double between 1970 and 2015. These changes brought about by the emergence of capitalism are truly breathtaking.
That is not to say these changes haven't brought new challenges, but the idea that the emergence of capitalism took people from idyllic conditions of bucolic bliss and enslaved them in factories, making the rich richer and the poor poorer, is an utter fantasy. Capitalism took people who lived from hand to mouth and freed them from the constant fear of pestilence and famine, it reduced infant mortality (death before age 1) rates from upwards of 250 per 1,000 births to less than 10 per 1,000 births, and it increased life expectancy from about 40 years to nearly 80 years. People with low incomes in developed nations live better today than many people with wealth did just a century ago. (See my post, The Market in Historical Perspective.) That prosperity is now spreading out to other parts of the globe.
Now it is true that a virus of individualistic materialism has infected our culture. Because capitalism is such a magnificent tool for amplifying the values of any society that embraces it, values of individualistic materialism have been amplified. But there is no reason to have an "…economic system wherein privately owned, relatively well organized, and stable firms pursue complex commercial activities with a relatively free (unregulated) market, taking a systematic, long-term approach to invest and reinvesting wealth (directly and indirectly) in productive activities involving a hired workforce, and guided by anticipated and actual returns" should be equated with individualistic materialism. (Quote from Rodney Stark, Victory of Reason, p. 56.)
Capitalism is deeply embedded in Christian ideas about linear time, progress, human rights, and the rationality of the universe created by a rational God. It has at its core the idea of creating economic freedom where people can engage in endless win-win economic transactions. It has been evolving into existence for at least 1,000 years. Individualistic materialism is largely a product of the Enlightenment and Modernism. It has co-opted ideas and tools that originated out of Christian social thinking. Those Christian economic ideas need to be recovered and redeemed from Modernism.
So let us restate the condemnation of capitalism, particularly when we really mean individualistic materialism. Capitalism has been a source of tremendous good in the world.
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