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The World’s Poorest People Are Getting Richer Faster Than Anyone Else – Article by Alexander Hammond

The World’s Poorest People Are Getting Richer Faster Than Anyone Else – Article by Alexander Hammond

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The New Renaissance Hat
Alexander Hammond
October 29, 2017
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Last Tuesday marked the 25th anniversary of the United Nations’ International Day for the Eradication of Poverty. The date intentionally coincides with the 30th anniversary of the Call to Action, which saw the French anti-poverty campaigner Father Joseph Wresinski ask the international community, in front of 100,000 Parisians, to “strive to eradicate extreme poverty”.

To mark the occasion, Antonio Guterres, the United Nations Secretary-General, was featured in a short video assessing the current state of world poverty. Despite noting such issues as unemployment, inequality, and conflict continuing in some regions, Guterres correctly observed that since 1990 the world has made “remarkable progress in eradicating poverty.”

While it is valuable to acknowledge that problems remain, it is important to reflect on just how far we’ve come.

Alleviating Poverty Fast

The speed of poverty alleviation in the last 25 years has been historically unprecedented. Not only is the proportion of people in poverty at a record low, but, in spite of adding 2 billion to the planet’s population, the overall number of people living in extreme poverty has fallen, too.

As Johan Norberg writes in his book Progress, “If you had to choose a society to live in but did not know what your social or economic position would be, you would probably choose the society with the lowest proportion (not the lowest numbers) of poor, because this is the best judgement of the life of an average citizen.” Well, in 1820, 94 percent of the world’s population lived in extreme poverty (less than $1.90 per day adjusted for purchasing power). In 1990 this figure was 34.8 percent, and in 2015, just 9.6 percent.

In the last quarter century, more than 1.25 billion people escaped extreme poverty – that equates to over 138,000 people (i.e., 38,000 more than the Parisian crowd that greeted Father Wresinski in 1987) being lifted out of poverty every day. If it takes you five minutes to read this article, another 480 people will have escaped the shackles of extreme of poverty by the time you finish. Progress is awesome. In 1820, only 60 million people didn’t live in extreme poverty. In 2015, 6.6 billion did not.

Now let’s consider those people who are still trapped in extreme poverty. The Oxford University scholar Max Roser’s website, Our World in Data, used World Bank databases to estimate that in 2013, there were 746 million people living in extreme poverty. Of these people, slightly more than 380 million resided in Africa, with Nigeria being home to largest number (86 million). Meanwhile, 327 million of those in extreme poverty lived in Asia, with India having the largest proportion by far (218 million). China had 25 million. The remaining 35 million lived in South America (19 million), North America (13 million), Oceania (2.5 million) and Europe (0.7 million.)

Put differently, of those who live in extreme poverty, over 40 percent resided in just two nations: India and Nigeria.

The Poorest of the Poor

Since its economic liberalization reforms in 1991, India’s average income has increased by 7.5 percent per year. That means that average income has more than tripled over the last quarter century. As wealth increased, the poverty rate in India declined by almost 24 percent. But most significantly, for the Dalits – the poorest and lowest caste in Indian society – the poverty rate during this period declined even faster, by 31 percent. That means that in the nation that has by far the largest number of people in extreme poverty, it is the people at the very bottom of the social strata who are getting richer faster.

A similar trend can be seen in Nigeria. Since the new millennium, gross domestic income per capita has increased by over 800 percent, from $270 to over $2,450. There is much work to be done, but this level of progress shows that even in the poorest countries, the speed of economic growth is encouraging.

In order to help the poorest, consider the impact free-market capitalism has had in the last 200 years in alleviating extreme poverty. The Industrial Revolution turned the once-impoverished western countries into abundant societies. The new age of globalization, which started around 1980, saw the developing world enter the global economy and resulted in the largest escape from poverty ever recorded. That is something that the late Father Wresinski would have been eager to celebrate.

Alexander C. R. Hammond is the Research Assistant for HumanProgress.org, a project of the Cato Institute’s Center for Global Liberty and Prosperity. He writes about economic freedom, globalization, and human well-being.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author. Read the original article.

The Good News They’re Not Telling You – Article by Thomas E. Woods, Jr.

The Good News They’re Not Telling You – Article by Thomas E. Woods, Jr.

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The New Renaissance HatThomas E. Woods, Jr.
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As we look at things that impress us technologically we also have a certain trepidation, because we’re told that robots are going to take our jobs. “Yes, the internet is wonderful,” we may say, “but robots, I don’t want those.”

I don’t mean to make light of this because robots are going to take a lot of jobs. They’re going to take a lot of blue collar jobs, and they’re going to take a lot of white collar jobs you don’t think they can take. Already there are robots that can dispense pills at pharmacies. That’s being done in California. They have not made one mistake. You can’t say that about human pharmacists, who are now free to be up front talking to you while the robot fills the prescription.

Much of this is discussed by author Kevin Kelly in his new book The Inevitable, with the subtitle Understanding the 12 Technological Forces that Will Shape Our Future. It’s incredible what robots can do and what they will be able to do.

Automation Really Is Taking Our Jobs

To me, just the fact that one of Google’s newest computers can caption a photo perfectly — it can figure out what’s happening in the photo and give a perfect caption — is amazing. Just when you think “a machine can’t do my job,” maybe it can.

What kind of world is this we’re moving into? I understand the fear about that. But, at the same time, let’s think, first of all, about what happened in the past.

In the past, most people worked on farms, and automation took away 99 percent of those jobs. Literally 99 percent. They’re gone. People wound up with brand new jobs they could never have anticipated. And in pursuing those jobs we might even argue that we became more human. Because we diversified. Because we found a niche for ourselves that was unique to us. Automation is going to make it possible for human beings to do work that is more fulfilling.

How is that? Well, first let’s think about the kinds of jobs that automation and robots do that we couldn’t do even if we tried. Making computer chips, there’s no one in this room who could do that. We don’t have the precision and the control to do that. We can’t inspect every square millimeter of a CAT scan to look for cancer cells. These are all points Kevin Kelly is trying to make to us. We can’t inflate molten glass into the shape of a bottle.

So, there are many tasks that are done by robots, through automation that are tasks we physically could not do at all, and would not get done otherwise.

Automation Creates Luxuries We Didn’t Know Were Possible

But also automation creates jobs we didn’t even know we wanted done. Kelly gives this example:

Before we invented automobiles, air-conditioning, flat-screen video displays, and animated cartoons, no one living in ancient Rome wished they could watch pictures move while riding to Athens in climate-controlled comfort. … When robots and automation do our most basic work, making it relatively easy for us to be fed, clothed, and sheltered, then we are free to ask, “What are humans for?”

Kelly continues:

Industrialization did more than just extend the average human lifespan. It led a greater percentage of the population to decide that humans were meant to be ballerinas, full-time musicians, mathematicians, athletes, fashion designers, yoga masters, fan-fiction authors, and folks with one-of-a kind titles on their business cards.

The same is true of automation today. We will look back and be ashamed that human beings ever had to do some of the jobs they do today.

Turning Instead to Art, Science, and More

Now here’s something controversial. Kelly observes that there’s a sense in which we want jobs in which productivity is not the most important thing. When we think about productivity and efficiency, robots have that all over us. When it comes to “who can do this thing faster,” they can do it faster. So let them do jobs like that. It’s just a matter of — so to speak — robotically doing the same thing over and over again as fast as possible. We can’t compete there. Why bother?

Where can we compete? Well, we can compete in all the areas that are gloriously inefficient. Science is gloriously inefficient because of all the failures that are involved along the way. The same is true with innovation. The same is true of any kind of art. It is grotesquely inefficient from the point of view of the running of a pin factory. Being creative is inefficient because you go down a lot of dead ends. Healthcare and nursing: these things revolve around relationships and human experiences. They are not about efficiency.

So, let efficiency go to the robots. We’ll take the things that aren’t so focused on efficiency and productivity, where we excel, and we’ll focus on relationships, creativity, human contact, things that make us human. We focus on those things.

Automation Really Does Make Us Richer

Now, with extraordinary efficiency comes fantastic abundance. And with fantastic abundance comes greater purchasing power, because of the pushing down of prices through competition. So even if we earn less in nominal terms, our paychecks will stretch much further. That’s how people became wealthy during and after the Industrial Revolution. It was that we could suddenly produce so many more goods that competitive pressures put downward pressure on prices. That will continue to be the case. So, even if I have a job that pays me relatively little — in terms of how many of the incredibly abundant goods I’ll be able to acquire — it will be a salary the likes of which I can hardly imagine.

Now, I can anticipate an objection. This is an objection I’ll hear from leftists and also from some traditionalist conservatives. They’ll sniff that consumption and greater material abundance don’t improve us spiritually; they are actually impoverishing for us.

Well, for one thing, there’s actually much more materialism under socialism. When you’re barely scraping enough together to survive, you are obsessed with material things. But, second, let’s consider what we have been allowed to do by these forces. First, by industrialization alone. I’ve shared this before, but on my show I had Deirdre McCloskey once and she pointed out that in Burgundy, as recently as the 1840s, the men who worked the vineyards — after the crop was in, in the fall — they would go to bed and they would sleep huddled together, and they basically hibernated like that for months because they couldn’t afford the heat otherwise, or the food they would need to eat if they were expending energy by walking around. Now that is unhuman. And they don’t have to live that way anymore because they have these “terrible material things that are impoverishing them spiritually.”

The world average in terms of daily income has gone from $3 a day a couple hundred years ago to $33 a day. And, in the advanced countries, to $100 a day.
Yes, true, people can fritter that away on frivolous things, but there will always be frivolous people.

Meanwhile, we have the leisure to do things like participate in an American Kennel Club show, or go to an antiques show, or a square-dancing convention, or be a bird watcher, or host a book club in your home. These are things that would have been unthinkable to anyone just a few hundred years ago.

The material liberation has liberated our spirits and has allowed us to live more fulfilling lives than before. So, I don’t want to hear the “money can’t give you happiness” thing. If this doesn’t make you happy — that people are free to do these things and pursue things they love — then there ain’t no satisfying you.

Tom Woods, a senior fellow of the Mises Institute, is the author of a dozen books, most recently Real Dissent: A Libertarian Sets Fire to the Index Card of Allowable Opinion. Tom’s articles have appeared in dozens of popular and scholarly periodicals, and his books have been translated into a dozen languages. Tom hosts the Tom Woods Show, a libertarian podcast that releases a new episode every weekday. With Bob Murphy, he co-hosts Contra Krugman, a weekly podcast that refutes Paul Krugman’s New York Times column.

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

Yes, We Still Make Stuff, and It Wouldn’t Matter if We Didn’t – Article by Steven Horwitz

Yes, We Still Make Stuff, and It Wouldn’t Matter if We Didn’t – Article by Steven Horwitz

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The New Renaissance HatSteven Horwitz
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One of the perennial complaints about the US economy is that we don’t “make stuff” anymore. You hear this from candidates from both major parties, but especially from Donald Trump and Bernie Sanders. The argument seems to be that our manufacturing sector has collapsed and that all US workers do is to provide services, rather than manufacturing tangible goods.

It turns out that this perception is wrong, as the US manufacturing sector continues to grow and in 2014 manufacturing output was higher than at any point in US history. But even if the perception were correct, it does not matter. The measure of an economy’s health isn’t the quantity of physical stuff it produces, but rather the value that it produces. And value comes in a variety of forms.

Manufacturing is Up

The path to economic growth is not to freeze into place the US economy of the 1950s. Let’s deal with the myth of manufacturing decline first. The one piece of evidence in favor of that perception is that there are fewer manufacturing jobs today than in the past. Total manufacturing employment peaked at around 19 million jobs in the late 1970s. Today, there are about 12.5 million manufacturing jobs in the US.

However, manufacturing output has never been higher. The real value of US manufacturing output in 2014 was over $2 trillion. The real story of the US manufacturing sector is that we have become so much more efficient, that we can produce more and more manufactured goods with less and less labor. These efficiency gains are largely the result of computer technology and automation, especially in the last fifteen years.

The labor that we no longer need in order to produce an ever-increasing amount of stuff is now available to produce a whole variety of other things we value, from phone apps to entertainment to the expanded number and variety of grocery stores and restaurants, to the data analyses that makes all of this growth possible.

Just as the workers in those factories we are so nostalgic for were labor freed from growing food thanks to the growth in agricultural productivity, so are today’s web designers, chefs at the newest hipster café, and digital editors in Hollywood the labor that has been freed from producing “stuff” thanks to greater technological productivity.

Or, put differently: those agricultural, industrial, and computer revolutions collectively have enabled us to have more food, more stuff, and more entertainment, apps, services, and cage-free chicken salads served with kale. The list of human wants is endless, and the less labor we use to satisfy some of them, the more we have to start working on other ones.

But notice something: all of the things that we produce have something in common. Whether it’s food or footwear, or automobiles or apps, or manicures or massages, the point of production is to rearrange capital and labor in ways that better satisfy wants. In the language of economics, the point of production (and exchange) is to increase utility.

When we produce more cars that people wish to buy, it increases utility. When we open a new Asian fusion street food taco stand, it increases utility. When Uber more effectively uses the existing stock of cars, it increases utility. When we exchange dollars for manicures, it increases utility.

Adam Smith helped us to understand that the wealth of nations is not measured by how much gold a country possesses. Modern economics helps us understand that such wealth is not measured by how much physical stuff we manufacture. Increases in wealth happen because we arrange the physical world in ways that people value more.

Neither producing cars nor providing manicures changes the number of atoms in the universe. Both activities just rearrange existing matter in ways that people value more. That is what economic growth is about.

Misplaced Nostalgia

We’re richer because we have allowed markets to produce with fewer workers. When we are fooled into believing that “growth” is synonymous with “stuff,” we are likely to make two serious errors. First, we ignore the fact that the production of services is value-creating and therefore adds to wealth.

Second, we can easily believe that we need to “protect” manufacturing jobs. We don’t. And if we try to do so, we will not only stifle economic growth and thereby impoverish the citizenry, we will be engaging in precisely the sort of special-interest politics that those who buy the myth of manufacturing often rightly complain about in other sectors.

The path to economic growth is not to freeze into place the US economy of the 1950s. We are far richer today than we were back then, and that’s due to the remaining dynamism of an economy that can still shed jobs it no longer needs and create new ones to meet the ever-changing wants of the consumer.

The US still makes plenty of stuff, but we’re richer precisely because we have allowed markets to do so with fewer workers, freeing those people to provide us a whole cornucopia of new things to improve our lives in endless ways. We can only hope that the forces of misplaced nostalgia do not win out over the forces of progress.

Steven_Horwitz

Steven Horwitz

Steven Horwitz is the Charles A. Dana Professor of Economics at St. Lawrence University and the author of Hayek’s Modern Family: Classical Liberalism and the Evolution of Social Institutions.

He is a member of the FEE Faculty Network.

This article was originally published on FEE.org. Read the original article.

What Markets Are Telling Us – Article by Ron Paul

What Markets Are Telling Us – Article by Ron Paul

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The New Renaissance HatRon Paul
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Last week US stock markets tumbled yet again, leaving the Dow Jones index down almost 1500 points for the year. In fact, most major world markets are in negative territory this year. There are many Wall Street cheerleaders who are trying to say that this is just a technical correction, that the bottom is near, and that everything will be getting better soon. They are ignoring the real message the markets are trying to send: you cannot print your way to prosperity.

People throughout history have always sought to acquire wealth. Most of them understand that it takes hard work, sacrifice, savings, and investment. But many are always looking for that “get rich quick” scheme. Monetary cranks throughout history have thought that just printing more money would result in greater wealth and prosperity. Every time this was tried it resulted in failure. Huge economic booms would be followed by even larger busts. But no matter how many times the cranks were debunked both in theory and practice, the same failed ideas kept coming back.

The intellectual descendants of those monetary cranks are now leading the world’s central banks, which is why the last decade has seen an explosion of money creation. And what do the central bankers have to show for it? Lackluster employment numbers that have not kept up with population growth, increasing economic inequality, a rising cost of living, and constant fear and uncertainty about what the future holds.

The past decade has been a lot like the 1920s, when prices would have dropped without intervention, but the Federal Reserve kept the price level steady through injections of easy money into the economy. The result in the 1920s was the Great Depression. But in the 1920s prices were dropping because of increased production. More goods being produced meant lower prices, which the Fed then tried to prop up by printing money. Unlike the “Roaring 20s” however, the economy isn’t quite as strong today. It’s more of a gasp than a roar.

Production today is barely above 2007 levels, while heavily-indebted households already hurt during the financial crisis don’t want to keep spending. The bad debts and mal-investments from the last Federal Reserve-induced boom were never liquidated, they were merely papered over with more easy money. The underlying economic fundamentals remain weak but the monetary cranks who run the Fed keep trying to pump more and more money into the system. They fail to realize that easy money is the cause, not the cure, of recessions and depressions. They didn’t realize that prices needed to drop in order to clear all the bad debt and mal-investments out of the system. Because they don’t realize that, we are on the verge of yet another financial crisis.

Don’t be confused by any stock market rallies over the next few months and think that the worst is over. Remember that after Black Tuesday in 1929 the Dow Jones rallied over the next year before it began slowly and steadily to sink again. The central bankers will do everything they can to delay the inevitable. If they had allowed housing prices to fall in 2008 and hadn’t bailed out the big Wall Street banks, the economy would have corrected itself. Yes, it would have been a severe correction, but it would have been nothing compared to the inevitable correction that will present itself when the Fed runs out of easy money options. The Fed may try to cut interest rates again, maybe even going negative, or it will do more quantitative easing, but that won’t work. Creating more money does not lead to economic growth and well-being. The more money the Federal Reserve creates, the more ordinary Americans will end up suffering.

Ron Paul, MD, is a former three-time Republican candidate for U. S. President and Congressman from Texas.

This article is reprinted with permission from the Ron Paul Institute for Peace and Prosperity.

The Good Old Days of Poverty and Filth – Article by Sarah Skwire

The Good Old Days of Poverty and Filth – Article by Sarah Skwire

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The New Renaissance HatSarah Skwire
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A Cultural Historian Decries Profit and Progress

Standing in a luxury hotel, cultural historian Luc Sante daydreams about the good old days of homeless alcoholics lighting trash fires in the streets of Manhattan’s Skid Row.

“Over there, next to the flophouse hotel,” Sante reminisced to the Guardian, “is where Nan Goldin lived and worked. Forty years ago there were still lots of vacant lofts here that had been burlesque and vaudeville theatres during the era when storefronts were saloons. There were bars solely inhabited by bums, their heads down on the counter. At night they’d be lined up outside the missions and Salvation Army hostels — veterans from World War Two, from the Korean War, from the Vietnam War. At night, trash fires would be lit in oil drums.”

The French have an elegant phrase for what Sante is doing. They call it nostalgie de la boue, “longing for the mud,” which means a romantic yearning for a primitive or degraded behavior or condition.

The phrase, which was coined by a French dramatist in 1855, has been around for a while and usefully describes the very real way in which the wealthier and healthier inhabitants of modernity look back at the past through a misty, romantic haze.

While it annoys historians when we put a soft-focus filter on history, it doesn’t generally do a lot of damage. We don’t need every medieval romance novel to remind us that the heroine’s breath didn’t smell like cool mint Listerine. It’s probably for the best that the historical re-enactors at Colonial Williamsburg don’t actually use authentic colonial medical remedies for their health problems, and visiting tourists are certainly grateful for modern plumbing and street sanitation. Even the BBC’s determinedly authentic 1900 House had a phone and modern fire protection in case of emergencies.

Any lover of history will occasionally find him or herself dreaming about attending a performance in the pit at Shakespeare’s Globe, or roughing it in the saloons and shacks of a gold rush town. Some of us may even have recently spent an entranced hour or two playing with the Victoria and Albert Museum’s “Design-a-Wig” website. But a good student of history will acknowledge that the Globe was undoubtedly loud, smelly, crowded, and occasionally even dangerous for playgoers. And the rugged romance of the gold rush town is offset by the knowledge that you were probably far more likely to die of gangrene or cholera than you were to strike it even moderately rich. And those glorious 18th-century wigs? Heavy, hot, smelly, and prone to harboring bugs.

But a real case of nostalgie de la boue goes further than the soft-focus filter that ignores the unpleasantness of the past. Rather than ignoring the historical “mud,” nostalgie de la boue actively longs for that kind of unpleasantness and insists that without it, life is less authentic, less meaningful, and altogether worse.

And that is where Luc Sante seems to be. While he is quite correct to note that the ribaldry of Paris has long been a desirable antidote to the humorless Puritanism of American cities, Sante goes entirely off the rails when he insists that his praise for the “materially poor but … imaginatively free and creatively rich” inhabitants of Paris is not a romantic vision.

According to Sante, people ask him, “How can you be promoting the life of the poor in the 19th century when so many of them didn’t eat every day?”

Sante concedes, “Well yeah, it’s bad, but is it really any worse than the situation today when everybody’s fed but you have an incredible percentage of New Yorkers who live in the shelter system – including people who have regular jobs?”

The horrors of the shelter system aside, there’s a great deal to be said for a world where more and more people are fed better every year, and my guess is that a great number of the imaginatively free Parisians that Sante dreams of would have enjoyed the occasional extra baguette. It is possible to value historical creativity and intellectual independence without also having to praise historical dietary deficits. (And it is worth noting, should Sante happen to read this, that the feeding of all those extra people is not due entirely, or even primarily, to “the shelter system.” It’s the market economy and all that goes with it that is making the world better fed every year.)

Sante continues his nostalgia for the mud when he argues, “In the Paris I write about, people ran businesses to make a living, not to make a profit. Cafes, bars: they’re no longer public institutions or part of a community. There’s no possibility for eccentric self-determination amongst the shopkeepers.”

The distinction Sante draws between “making a living” and “making a profit” is not particularly clear to me. It suggests, perhaps, an unstated assumption that there is such a thing as an agreed-upon “correct” amount of profit for a business or businessperson to make — beyond which all profit becomes filthy lucre. Possibly he is making an equally indefensible assumption that businesspeople in the past weren’t interested in being as successful as they could be and that it is only our postmodern cynicism that has unleashed the drive for profit.

Maybe Sante means to say that unlike today’s businesses, the businesses of years ago “made a living” by helping to create a community among their customers rather than just “making a profit” by selling stuff. I think that thousands of today’s small business owners and their Facebook pages, Etsy stores, and farmer’s market stands would beg to differ with his assessment of their importance to their communities.

There’s not necessarily always a problem with nostalgie de la boue. It’s how we got Peaky Blinders, the renewed interest in home canning, restaurants that serve bone marrow, and the great revival of folk music spurred by O Brother Where Art Thou?, after all.

Sante, though, has so much mud in his eyes that he is blind to the tangible and important progress that has been made in human wealth and welfare. His mucky nostalgia leads him to claim that our increasing wealth — which has given us more health, more discretionary income, more food, and more free time — is a danger more pernicious than terrorism. “Money, for me, may not immediately kill people in the way terrorism does, but it does certainly change the fabric of daily life in much deeper and more insidious ways.”

That is a statement of such offensive ignorance that it could only be made by a man standing high above the former Skid Row, looking down through glass, with room service and maid service only a phone call away. I wonder if the men and women in the photographs that Sante treasures would have said the same?

Sarah Skwire is the poetry editor of the Freeman and a senior fellow at Liberty Fund, Inc. She is a poet and author of the writing textbook Writing with a Thesis. She is a member of the FEE Faculty Network.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author.

What Are Your Odds of Making It to the 1%? – Article by Chelsea Follett

What Are Your Odds of Making It to the 1%? – Article by Chelsea Follett

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The New Renaissance HatChelsea Follett
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They’re better than you think

Your odds of “making it to the top” might be better than you think, although it’s tough to stay on top once you get there.

According to research from Cornell University, over 50 percent of Americans find themselves among the top 10 percent of income-earners for at least one year during their working lives. Over 11 percent of Americans will be counted among the top 1 percent of income-earners (i.e., people making at minimum $332,000) for at least one year.

How is this possible? Simple: the rate of turnover in these groups is extremely high.

Just how high? Some 94 percent of Americans who reach “top 1 percent” income status will enjoy it for only a single year. Approximately 99 percent will lose their “top 1 percent” status within a decade.

Now consider the top 400 U.S. income-earners — a far more exclusive club than the top 1 percent. Between 1992 and 2013, 72 percent of the top 400 retained that title for no more than a year. Over 97 percent retained it for no more than a decade.

HumanProgress.org advisory board member Mark Perry put it well in his recent blog post on this subject:

Whenever we hear commentary about the top or bottom income quintiles, or the top or bottom X% of Americans by income (or the Top 400 taxpayers), a common assumption is that those are static, closed, private clubs with very little dynamic turnover. …

But economic reality is very different — people move up and down the income quintiles and percentile groups throughout their careers and lives.

What if we look at economic mobility in terms of accumulated wealth, instead of just annual income (as the latter tends to fluctuate more)?

The Forbes 400 lists the wealthiest Americans by total estimated net worth, regardless of their income during any given year. Over 71 percent of Forbes 400 listees — and their heirs — lost their top 400 status between 1982 and 2014.

heirsSo, the next time you find yourself discussing the very richest Americans, whether by wealth or income, keep in mind the extraordinarily high rate of turnover among them.

And even if you never become one of the 11.1 percent of Americans who fleetingly find themselves in the “top 1 percent” of US income-earners, you’re still quite possibly part of the global top 1 percent.

Cross-posted from HumanProgress.org.

Chelsea Follett (Chelsea German) works at the Cato Institute as a Researcher and Managing Editor of HumanProgress.org.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author.

Inflation’s Not the Only Way Easy Money Destroys Wealth – Article by Frank Shostak

Inflation’s Not the Only Way Easy Money Destroys Wealth – Article by Frank Shostak

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The New Renaissance Hat
Frank Shostak
October 14, 2014
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The US Federal Reserve can keep stimulating the US economy because inflation is posing little threat, Federal Reserve Bank of Minneapolis President Kocherlakota said. “I am expecting an inflation rate to run below two percent for the next four years, through 2018,” he said. “That means there is more room for monetary policy to be helpful in terms of … boosting demand without running up against generating too much inflation.”

The yearly rate of growth of the official consumer price index (CPI) stood at 1.7 percent in August against two percent in July. According to our estimate, the yearly rate of growth of the CPI could close at 1.4 percent by December. By December next year we forecast the yearly rate of growth of 0.6 percent.

Does Demand Create More Supply?

It seems that the Minneapolis Fed President holds that by boosting the demand for goods and services — by means of additional monetary pumping — it is possible to strengthen economic growth. He believes that by means of strengthening the demand for goods and services the production of goods and services will follow suit. But why should that be so?

If by means of monetary pumping one could strengthen the economic growth then it would imply that — by means of monetary pumping — it is possible to create real wealth and generate an everlasting economic prosperity.

This would also mean that world wide poverty should have been erased a long time ago. After all, most countries today have central banks that possess the skills to create money in large amounts. Yet world poverty remains intact.

Despite massive monetary pumping since 2008, and the policy interest rate of around zero, Fed policymakers seem to be unhappy with the so-called economic recovery. Note that the Fed’s balance sheet, which stood at $0.86 trillion in January 2007 jumped to $4.4 trillion by September this year.

Production Comes Before Demand

We suggest that there is no such thing as an independent category called demand. Before an individual can exercise demand for goods and services, he/she must produce some other useful goods and services. Once these goods and services are produced, individuals can exercise their demand for the goods they desire. This is achieved by exchanging things that were produced for money, which in turn can be exchanged for goods that are desired. Note that money serves here as the medium of exchange — it produces absolutely nothing. It permits the exchange of something for something. Any policy that results in monetary pumping leads to an exchange of nothing for something. This amounts to a weakening of the pool of real wealth — and hence to reduced prospects for the expansion of this pool.

What is required to boost the economic growth — the production of real wealth — is to remove all the factors that undermine the wealth generation process. One of the major negative factors that undermine the real wealth generation is loose monetary policy of the central bank, which boosts demand without the prior production of wealth. (Once the loopholes for the money creation out of “thin air” are closed off the diversion of wealth from wealth generators towards non-productive bubble activities is arrested. This leaves more real funding in the hands of wealth generators — permitting them to strengthen the process of wealth generation (i.e., permitting them to grow the economy).

Artificially Boosted Demand Destroys Wealth

Now, the artificial boosting of the demand by means of monetary pumping leads to the depletion of the pool of real wealth. It amounts to adding more individuals that take from the pool of real wealth without adding anything in return — an economic impoverishment.

The longer the reckless loose policy of the Fed stays in force the harder it gets for wealth generators to generate real wealth and prevent the pool of real wealth from shrinking.

Finally, the fact that the yearly rate of growth of the CPI is declining doesn’t mean that the Fed’s monetary pumping is going to be harmless. Regardless of price inflation monetary pumping results in an exchange of nothing for something and thus, impoverishment.

Frank Shostak is an adjunct scholar of the Mises Institute and a frequent contributor to Mises.org. His consulting firm, Applied Austrian School Economics, provides in-depth assessments and reports of financial markets and global economies. See Frank Shostak’s article archives.

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

The Great Fact: A Review of Deirdre McCloskey’s “Bourgeois Dignity” – Article by Bradley Doucet

The Great Fact: A Review of Deirdre McCloskey’s “Bourgeois Dignity” – Article by Bradley Doucet

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The New Renaissance Hat
Bradley Doucet
September 20, 2014
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We live in astonishing times. We take it for granted, of course, which is good in a way because, well, we have to get on with the business of living and can’t spend every waking moment going, “Oh my God! This is amazing!” But it’s a good idea to stop and take stock from time to time in order to appreciate just how far we’ve come in the past 200 years or so—to show gratitude for just how much richer the average person is today thanks to the Industrial Revolution.
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“In 1800, the average human consumed and expected her children and grandchildren and great-grandchildren to go on consuming a mere $3 a day, give or take a dollar or two,” writes economist and historian Deirdre McCloskey in her excellent 2010 book, Bourgeois Dignity: Why Economics Can’t Explain the Modern World. That’s in modern-day, US prices, corrected for cost of living. Apart from a comparatively few wealthier lords, bishops, and the odd rich merchant, people were dirt poor, barely subsisting, unable to afford luxuries like elementary education for their kids—who had a 50% chance at birth of not making it past the age of 30. That’s the way it was, the way it had always been, and as far as anyone could tell, the way it always would be.

More Than 16 Times Richer

But thankfully, things turned out a little differently. There are seven times as many of us on the planet today, but we’re many times richer on average, despite pockets of enduring dire poverty here and there. According to McCloskey, “Real income per head nowadays exceeds that around 1700 or 1800 in, say, Britain and in other countries that have experienced modern economic growth by such a large factor as sixteen, at least.” And this is a very conservative estimate of material improvement, not taking into account such novelties as jet travel, penicillin, and smartphones.

This radical, positive change brought about by the Industrial Revolution is the “Great Fact” about the modern world. “No competent economist, regardless of her politics, denies the Great Fact,” writes McCloskey. But it does require explanation, and here there are many theories. What caused it? Why did it happen where and when it happened—starting in northern Europe around 1800—instead of in some other place, at some other time? And although modern economic growth has at least begun to reach most of the world, including now China and India, if we had a better understanding of its causes, perhaps we could do a better job of encouraging it to spread to the relatively few remaining holdouts.

What changed, argues McCloskey, is the way people thought about markets and innovation and the people who were engaged in the business of making new things and buying and selling them. “More or less suddenly the Dutch and British and then the Americans and the French began talking about the middle class, high or low—the “bourgeoisie”—as though it were dignified and free. The result was modern economic growth.” In other words, the material, economic fact has a non-material, rhetorical cause, which is why economics can’t explain the modern world. Our ideas changed, and we started innovating like never before, and an explosion of innovation drove the rapid economic growth of the past 200 years.

What Didn’t Cause the Industrial Revolution

Bourgeois Dignity is the second book of a trilogy. The first book, The Bourgeois Virtues (2006), which I have not read but now plan to, argued for the positive ethical status of a bourgeois life. The third book, Bourgeois Equality, due out in 2015, will present the positive case for the claim that it is a change in ideas and rhetoric that made the modern world—and that ideas and rhetoric could unmake it, too. As for this second book in the series, it presents the negative case by examining the materialist explanations for the Great Fact offered up by economists and historians from both the left and the right, and finding them all to be lacking.

Imperialism, for instance, did not bring about the modern world. The average European did not become spectacularly wealthy by historical standards simply by taking Africa’s and America’s wealth. Imperialism did happen, and it did make a few people rich and hurt a lot of people, especially in places like the Belgian Congo. But it did not raise the standard of living of average Europeans, who would have been better off if their leaders had allowed trade to flourish instead of supporting the subjugation of people in foreign lands. Besides which, empires had existed in other times and places without bringing about an Industrial Revolution. A unique effect cannot be the result of a routine cause. And it cannot either simply be the case that wealth was moved from one place to another, because there is much more wealth per person today than ever before, despite there being many more of us around.

International trade did not do it either, according to McCloskey. Trade is a good thing, as imperialism is a bad thing, but its effects are relatively small. And extensive trade, too, existed long before the 1800s, in places other than Europe and the United States, without launching the rapid material betterment of all. And for similar reasons, it wasn’t the case that people began saving more, or finally accumulated enough, or got greedier all of a sudden, or discovered a Protestant work ethic, or finally built extensive transportation infrastructure, or formed unions, or suddenly started respecting private property, or any of dozens of other explanations presented by economists and historians over the years.

Respect for Innovation and Making Money

Only innovation has the power to make people radically better off by radically increasing the output produced from given inputs, and only innovation was a truly novel cause, to the extent that it was taking place on an unprecedented scale two hundred years ago in northern Europe. And the reason that it began happening there and then like never before was a change in rhetoric—a newfound liberty, yes, but also a newfound dignity previously reserved for clergy and warriors. For the first time, in the 17th and 18th centuries, it became respectable, even honourable, to figure out new ways of doing things and to make money selling those innovations to other people, and so innovation and business were encouraged, and much of humanity was lifted out of dire poverty for the first time in history starting in the 19th century.

Ideas matter. Supported by bourgeois dignity, and despite the betrayal of a portion of the intellectual elite as of around 1848, we have continued to innovate and make money and lift more and more people out of poverty. There have been significant setbacks due to communism and fascism and two world wars, but almost everyone is much better off today than anyone dreamed was possible just a few short centuries ago. In order to continue spreading the wealth, and the opportunities for human flourishing that go with it, we need to defend the idea that business and innovation deserve to be free and respected, as Deirdre McCloskey herself has so admirably done in this fine volume.

Bradley Doucet is Le Québécois Libre‘s English Editor and the author of the blog Spark This: Musings on Reason, Liberty, and Joy. A writer living in Montreal, he has studied philosophy and economics, and is currently completing a novel on the pursuit of happiness. He also writes for The New Individualist, an Objectivist magazine published by The Atlas Society, and sings.
Commonly Misunderstood Concepts: Employment (2009) – Article by G. Stolyarov II

Commonly Misunderstood Concepts: Employment (2009) – Article by G. Stolyarov II

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The New Renaissance Hat
G. Stolyarov II
Originally Published November 26, 2009
as Part of Issue CCXX of The Rational Argumentator
Republished July 24, 2014
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Note from the Author: This essay was originally published as part of Issue CCXX of The Rational Argumentator on November 26, 2009, using the Yahoo! Voices publishing platform. Because of the imminent closure of Yahoo! Voices, the essay is now being made directly available on The Rational Argumentator.
~ G. Stolyarov II, July 24, 2014
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The mistaken identification of wealth with money, which I refuted in an earlier installment of this series, results in yet another damaging fallacy: the idea that the only legitimate “employment” is work performed for somebody else in exchange for money. This cultural confusion has become so deep-rooted that even people who own their own businesses or function as independent contractors are classified as “self-employed” – which, despite the second component of that term, is somehow seen as distinct from being “employed,” which has become in the minds of many identical to working for a formal organization on a fixed schedule for largely fixed compensation. There is nothing wrong with the latter kind of employment; indeed, I am currently engaged in it, and it pays well. It is a practical and a tremendously useful way to earn a living for many. But the societal stigma against many individuals who choose not to pursue that path needs to end.

I am not here seeking to justify individuals who refuse to work out of sloth or rebelliousness – or individuals who choose to subsist off of the welfare system. Indeed, I am not at all seeking to justify individuals who refuse to work at all. Rather, I seek to effectuate a cultural re-identification of employment with doing actual useful work – physical or mental – irrespective of how much, or how little, money that work earns. If wealth is not money but rather useful goods and services, then useful employment is any activity that generates useful goods and services. Some such activities happen to be highly compensated with money, either because there is large market demand for them or because they are subsidized by private institutions or governments. But other such activities arise out of individuals’ volunteer efforts, hobbies and interests, and desires to improve their immediate environment. An individual who devotes himself or herself primarily to the latter sorts of activities can be as worthy of respect and just as productive as an individual who makes a six-figure monetary income.

First, it is essential to recognize that either market value or institutional advantages that result in monetary subsidies are not necessarily a reflection of genuine wealth creation or usefulness. For instance, numerous products of high culture – including philosophy, literature, and classical music – are not in high demand among the masses, who simply do not understand such products. The creators of high culture will not earn as great an income on the market as the creators of light magazines and popular music. However, these same creators will contribute a much longer-lasting value to human knowledge, refinement, and moral standards for generations to come, whereas the creators of more popular works are unlikely to remain in demand for more than two generations. There is nothing wrong with this differential in compensation, per se, as people who do not appreciate high culture are entitled to vote with their dollars however they please. But this state of affairs does invalidate any notion that the amount of money one receives from one’s work is in any manner connected with one’s worth as a human being or one’s contribution to improving one’s own life and the lives of others – both in the short term and in the long term. Many creators of more refined works have even decided that it is unwise to try to make a living from such works and depend on their approval by a mass audience; instead, they have decided to subsidize their own creations and the dissemination of these works by means of a monetary income they earn from another occupation. This allows for works of high culture to be created exactly as the author intended them to be; if the author is talented and has a consistent vision, such works will be much more likely to endure long into the future.

Another important recognition is that some work is either impossible to transfer to the market given present technology or is prohibitively expensive to transfer. For instance, if I wish to go into my kitchen and get myself a beverage, it would be highly impractical for me to hire another individual to do this for me. If I get the beverage myself, I do not either collect or spend any money – provided that I already own the beverage, the glass, and the living space. But it cannot be denied that the act of getting the beverage was desirable to me and improved the quality of my life. Likewise, numerous actions that an individual performs to improve his or her own skills – such as reading books, practicing musical instruments, and doing mathematical problems – cannot be outsourced to other individuals and retain their value for the individual, which arises from the act of learning new skills that the individual himself would be able to use in the future. Indeed, it is true that all of us, if we have even the slightest desire to live well, will perform a wide variety of work every day for which we receive no monetary compensation at all! If we did not perform this work, it is unlikely that we would be in any position to earn any money, either.

A popular source of contempt in contemporary culture is the individual who, instead of leaving the home to work for money, chooses to remain at home and maintain it in good working order. This is, in my judgment, the single most egregious consequence of the fallacy that employment is the same as working for money. Working within the home – especially when supported by the monetary income of another family member – is a tremendously useful and life-affirming occupation; it facilitates a division of labor where various family members can specialize in the tasks they are most skilled at performing, thereby making good use of the principle of comparative advantage. Moreover, it enables a greater degree of care for any children in the household and provides a source of relief for those individuals who simply do not like working outside the home on a fixed schedule.

I note that there is nothing in this implying that any particular gender of individual should choose to stay at home, or that a family cannot function well if all of its members choose to work outside the home. Rather, I argue that a productive family can exist irrespective of which of its members do or do not choose to work for money. Indeed, for a family which has accumulated sufficient money and physical goods, it is possible to maintain productivity and a high standard of living even if none of its members earns a regular monetary income. Even if an individual has never earned any money in his or her life and, say, lives off a vast inheritance, it is still possible for that individual to perform useful and productive work. Indeed, one of the arguments that the great Austrian economist Friedrich Hayek made for the right of inheritance can be summarized as follows. Even if the vast majority of people who inherit their money will spend it unwisely, it is enough for one out of a thousand inheritors to be a great thinker and innovator. This individual, through his inheritance, will have the time and leisure to bring his vision to fruition, without needing to worry about providing for his day-to-day subsistence. The result could be a tremendous philosophical, technological, or artistic breakthrough that improves the lives of millions for centuries to come – and this result is worth the wasteful spending any other heirs might engage in.

Of course, the manner of productive work one does is often constrained by one’s current material situation. Many people will work for money, even if they wish to do something else, because they need the money to maintain the standard of living they wish to have. Increases in monetary income can go a long way toward improving both one’s access to leisure and one’s level of security and comfort. On the other hand, the same goals can also be achieved in part by spending less of the money one already earns and by living within one’s means – never letting one’s expenses exceed one’s income, which is akin to deficit spending for individuals, and not taking out interest-bearing debt, unless there is no other option, and the good the debt would fund could be seen as a necessity – such as a house. Devoting some time to managing one’s spending and establishing less expensive lifestyle choices is just productive as working to earn a salary increase.

If you wish to work to earn money, by all means do so. If you would rather focus on working in the home or doing volunteer work of any sort, this is excellent as well. Provided that one works and has useful outcomes to show for it, there is no need to feel any inferiority in one’s own case or any disrespect for others.

Read other articles in The Rational Argumentator’s Issue CCXX.

Commonly Misunderstood Concepts: Wealth (2009) – Article by G. Stolyarov II

Commonly Misunderstood Concepts: Wealth (2009) – Article by G. Stolyarov II

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The New Renaissance Hat
G. Stolyarov II
Originally Published November 16, 2009
as Part of Issue CCXVIII of The Rational Argumentator
Republished July 24, 2014
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Note from the Author: This essay was originally published as part of Issue CCXVIII of The Rational Argumentator on November 16, 2009, using the Yahoo! Voices publishing platform. Because of the imminent closure of Yahoo! Voices, the essay is now being made directly available on The Rational Argumentator.
~ G. Stolyarov II, July 24, 2014
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Many of the economic and personal fallacies of our time arise from the mistaken belief that wealth and money are identical. In fact, while money is in many cases an important gateway to wealth, it does not even approach describing what wealth truly is.

In our time, money may be equated to wealth even less justifiably than it could have been in times past – when most money was identified with precious metals, such as gold and silver, which had uses other than as media of exchange. Currently, money in virtually all countries consists of pieces of paper which are decreed to be money by government fiat. Legal tender laws force individuals to accept these special pieces of paper as payment for products, services, or debts. The supply of these pieces of paper is controlled by the government’s printing press – typically located at either the central bank or the treasury department.

Why do people seek and hold this money? They do so because they expect to be able to purchase with it actual goods and services – either now or in the future. This means that the money is not seen as valuable in itself; it is seen as valuable because of the other things it can obtain. However, the supply of these other things is not dependent on the number of pieces of paper in circulation. Rather, it is dependent on real factors that affect individuals’ and businesses’ abilities to produce actual goods and services. Thus, having more pieces of paper does not automatically make one wealthier. If the government simply chooses to print more of them, while no external factors affect the production of goods and services, then there will simply be more pieces of paper for the same amount of real goods and services. We would therefore get inflation: prices in terms of the pieces of paper will increase in proportion to the volume of new pieces of paper introduced. Of course, inflation has disastrous impacts on individuals’ existing savings, incentives for frugality, and transaction costs. It also constitutes an unjustified redistribution of wealth from the producers who earn it to the politically connected elites who get priority access to the new pieces of paper. Creating more “money” can often destroy actual wealth and productivity.

But there is another respect in which money is not equivalent to wealth. Consider the fact that, even without inflation, the same amount of money will not purchase the same goods and services in every area. Indeed, a tiny, cramped apartment in the center of a major city may often cost more money than a spacious house in a small town. An individual earning the same amount of money in each area would be able to have a much higher standard of living in the small town. It is quite possible that the individual’s opportunities to earn more money in a big city will be greater, but the prices of goods will not increase in a one-to-one ratio with that individual’s relative salary increase. Rather, the prices are most likely to be higher in a ratio that is greater or smaller than the individual’s ratio of salaries – thereby making life in the city either less or more attractive to the individual. How much money one makes is not an indicator of the rate at which one accumulates wealth; a better indicator is what one can buy for one’s money.

These thoughts should give pause to both advocates of the government’s power of the printing press and to indiscriminate salary chasers. Both may be devoting their time and energy to the pursuit of numerical illusions rather than substantive benefits. A much more sophisticated and nuanced understanding of wealth is needed in order to truly thrive and lead a good life.

To achieve an understanding of wealth, we need to ask ourselves why we seek money in the first place. Ultimately, every unit of money – even one saved or invested for many years – goes to fund some human consumption. Money can pay for either goods – material objects – or services – human behaviors performed for the benefit of the payer. It is actual goods and services that constitute wealth, not the money. Moreover, the money price of these goods and services is irrelevant from the standpoint of the wealth of the person who owns them. If I have a table, I am no less wealthy if I cannot sell the table at all – nor am I any wealthier just because I have the potential to sell it for five million dollars. I still have the same table, and its physical qualities are unchanged. If I actually do sell it, I might become wealthier, but only insofar as my five million dollars would enable me to purchase more tables, better tables, or other goods and services I value. The important principle to recognize is that one either has potential wealth in the form of money or actual wealth in the form of the goods and services one has purchased. One does not have both at the same time in the same object. Fiat money is wealth only insofar as it can reasonably be expected to procure actual goods and services. Goods and services constitute wealth in themselves while they last. Capital goods that can produce other goods can also be described as potential wealth – but it is also true that they are not money while one owns them as goods.

A further distinction should be made. Not all material objects are goods, and not all human behaviors are services. Some material objects – such as clouds of poison gas in one’s living room – are active bads. Likewise, some human behaviors – such as people raping or murdering one another – are active disservices. The only way to comprehensively define wealth is with regard to a standard by which goods and services can be identified. The most fundamental standard from both a moral and a practical standpoint is the principle that the life of every innocent individual is the greatest and most basic good – where an innocent individual is one who has not violated this principle through actions such as murder or the attempt at murder. Thus, any object that promotes any individual’s life is a good; any behavior that promotes any individual’s life is a service. The more life-promoting objects one has – and the more life-promoting behaviors one either is able to elicit from others or is able to initiate oneself – the wealthier one is.

Everything else is a matter of means and context. How one gets wealth – whether it be through money, barter, gifts, or one’s own work and transformation of raw materials – has no bearing on the nature of that wealth; all of us who are not self-destructive pursue a wide variety of means that fundamentally aim at the goal of improving our lives. Ethically, the means ought to be non-coercive; we must not intrude on other people’s prerogatives to control their lives just like they must not intrude on ours. Wealth is still wealth, even if acquired through dishonest or evil means – but immoral means of wealth acquisition will destroy other wealth on net, through damage to property and human beings and their incentives to produce.

Moreover, it is possible for the same object to be beneficial in some circumstances and harmful in others. For instance, a piece of rope used to tie a knot may be extremely useful, while the same piece of rope strung across the floor of a room might be a tripping hazard. However, the same item or behavior in the exact same context should produce the same results; actual situations are never precisely repeatable, but we can at least estimate an object’s usefulness or lack thereof by analyzing situations where it has been applied in similar ways.

This view has practical implications beyond the scope of one’s views on economics or politics. Most items in our lives should be viewed not in terms of how we might be able to resell them to others, but rather in terms of what use they are to us personally. There is nothing wrong with resale as such, but it is not a behavior that can be imposed on all objects – and, indeed, economic bubbles are created when the expectation of resale for continually rising prices is applied by enough people to too many commodities. Those of us who acquire an item for our own use – which includes our purchases of art, furniture, automobiles, and yes, even houses – are not in the same position as businessmen who produce or acquire items for the specific purpose of reselling them at a profit. Businessmen see their inventories as potential money generators – an indirect route to greater wealth; consumers ought to see their property as useful in itself and any resale as incidental or fortuitous – a kind of loss mitigation once one is no longer able or willing to make good use of the property. We have adjusted quite well to the idea that the resale value of an automobile or a computer is virtually always much lower than its purchase price. In the role of consumers, we should adopt the same default expectation for houses – and for everything else. But the silly notion that one is entitled to resell any property at a higher price than one purchased it must be discarded, as it results in the foolish pursuit of higher-priced items in the vain hope of their further appreciation in price – without any expert knowledge of how markets in these items actually work. This turns many a layman into a speculator, while enticing him to take out loans with his fanciful expectations as collateral – as happened all too often during the housing bubble. Moreover, it engenders the disastrous attitude that price decreases – which make goods such as houses more affordable for people – are in some manner harmful. But one cannot destroy wealth by making goods easier to earn through honest work – nor can one create wealth by piggybacking off of others’ expectations of price increases.

Leave the house-flipping to the experts, and buy a house that you would want to live in, just as you buy clothes you want to wear and computers you want to use. That house would constitute real wealth for you, irrespective of its market price, and it will be there irrespective of financial market or currency value fluctuations – if you actually own the house or have a fixed-rate mortgage. To maximize your wealth, you should act in such a manner as to improve your access to actual goods and services that you value. Pieces of paper and expectations can only get you so far. And remember that your own ability to do useful work – including work that does not bring immediate monetary returns – is one of your most reliable gateways to wealth.

Read other articles in The Rational Argumentator’s Issue CCXVIII.