Enterprise

The Progressive Critique of Free Markets: A Response | Part 5

Free Markets, Social Darwinism, and Christianity

The early Progressives leveled two additional and particularly sharp criticisms against the free market that sought to place it beyond any moral defense. First, they argued that it amounted to laissez-faire, a thoroughgoing form of free-market economics that permits very few, if any, economic regulations. This criticism was potentially devastating because it claimed that free markets amounted to a form of anarchy that refused to countenance many salutary regulations. The charge appeared to be credible in large part because there were indeed some very prominent and influential advocates of laissez-faire in the 19th century. These included such intellectuals as Herbert Spencer and William Graham Sumner. Henry Carter Adams, the influential progressive political economist, attacked Spencer’s call for “unregulated workings of the law of supply and demand.”The progressive Supreme Court Justice Oliver Wendell Holmes Jr. also famously attacked laissez-faire in his dissent in the Lochner decision, writing, “The Fourteenth Amendment does not enact Mr. Herbert Spencer’s Social Statics.”

Laissez-faire advocates were in some cases tainted by their support for Social Darwinism, a system of ethics that advocates leaving poor and suffering people to their own devices. This morally callous philosophy has done great harm ever since to the cause of economic liberty. Even in our day, the charge of Social Darwinism is leveled by some critics of the free market, who allege that the free market means that “you are on your own,” and that no one need be concerned for the most vulnerable people. At times, such rhetoric is clearly exaggerated. For example, a congressional proposal for modest tax-and-spending cuts that left core welfare state benefits in place was described by President Barack Obama as “thinly veiled social Darwinism.”

The second sharp progressive criticism against free markets—one that we continue to hear in our day from progressive Christians—is that it is unchristian. Progressive Christians are joined in their religious attack on free markets by the secular left, which offers a post-Christian, quasi-religious vision of secular economic redemption. These contemporary religious and quasi-religious criticisms originated in the Progressive Era. Like the charge that the free market amounts to laissez-faire, the progressive religious critique was also potentially devastating because it claimed that the free market stood outside the sacred moral framework of Western civilization.

The early progressive Christian alternative to the free market took the form of the Social Gospel. The Social Gospel was a 19th- and 20th-century protestant reform movement, especially prominent during the Progressive Era, that sought the fulfilment of one’s full Christian duty by means of progressive social, political, and economic reform. Ely and the protestant theologian Walter Rauschenbusch were the two most prominent Social Gospel advocates. Ely’s position as a political economist gave him special influence in the Social Gospel movement because he could bring to his Social Gospel reform advocacy his scholarly authority as an expert in economics. Ely argued that, properly understood, Christianity requires us to aim first and foremost for the secular redemption of the earth rather than entrance into Heaven in the afterlife. In opposition to two millennia of Christian thought, Ely wrote that “Christianity is primarily concerned with this world.” He rejected as an “unfortunate error” the traditional Christian view “that Christianity is concerned primarily with a future state of existence.”

Progressive earthly reforms would be our best way of practicing the second commandment of Christ, “love thy neighbor.” The Social Gospel’s grand secular goals were hugely ambitious, yet they stood within reach because every significant human problem could be solved in principle by means of the new, modern discipline of social science. Social science was the great and efficacious instrument for analyzing and solving human problems, thereby fulfilling Christ’s second commandment. And so, in Ely’s words, “the second commandment…in its elaboration, becomes social science or sociology.” Ely was joined in his call for Christian reform by his fellow progressive technocrats, and especially by his former student John Commons.

The free market stood in the way of Social Gospel reforms. For Progressives, its unchristian selfishness and dogmatic resistance to social science–based reforms rendered it morally illegitimate for a Christian people. The free market prevented individuals from fulfilling their full Christian duty to others, and every good Christian was required to reject the free market and support social science and progressive reforms. While in our day the Social Gospel is not expressly mentioned, its echoes remain in progressive Christianity, which argues that interventionist economics is needed if we are to fulfill our Christian duty to others. Both Social Gospelers and progressive Christians can thus pose as exponents of moral views closer to the West’s Christian heritage.

These two charges—that the free market amounts to laissez-faire anarchy and that it is unchristian—are both false. Laissez-faire economics is not identical to the natural rights free-market economics that comes to us from the American Founding. Natural rights free-market economics is consistent with the founding principles of the United States because free-market economics rests on a political framework that includes the belief that all men are created equal and that government exists to protect our pre-existing natural right to life, liberty, and property. In consequence, the economy under natural rights free-market economics must be subordinate to politics, meaning that the economy cannot be permitted to subvert the free political order upon which it rests.

To be consistent with the principles of the American Founding, political economy must incorporate the moral goal of the maintenance of a free society. This means, among other things, that economic relations can be regulated if they subvert the moral conditions of freedom, because if the moral conditions of freedom are harmed, then the free political order that grounds free markets will also be harmed. In other words, the political economy of the Founders aims at both political freedom and economic prosperity as moral goals—and therefore efforts at increasing prosperity must not be permitted to harm efforts at preserving and advancing political freedom. For this reason, for example, the government can outlaw prostitution or regulate the sale of liquor. Moreover, the government can regulate the economy to prevent force, fraud, and physical harm, including harm to oneself by way of self-destructive contracts. Natural rights free-market economics therefore permits police power regulations intended to prevent moral, economic, and physical harms. It elevates morality above unqualified economic gain. Laissez-faire advocates either deny the police power or gravely restrict it, and in that sense they fall outside of the boundaries of natural rights free-market economics.

Another major difference between laissez-faire economics and natural rights free-market economics concerns the government’s treatment of the poor. Natural rights free-market economics permits some basic welfare programs on the grounds that we are morally obliged to preserve those too poor to help themselves. As the great natural rights theorist John Locke put it, “Every one…when his own preservation comes not in competition, ought he, as much as he can, to preserve the rest of mankind.” And indeed, the early republic did make provision for some welfare. Thomas Jefferson favorably described assistance to the poor by Virginia: “The poor, unable to support themselves, are maintained by an assessment on the titheable persons in their parish.” The goals of such public support were the preservation of the person’s life and, if possible, his self-sufficiency. Jefferson described an early form of workfare: “Vagabonds, without visible property or vocation, are placed in workhouses, where they are well clothed, fed, lodged, and made to labour.” This arrangement was apparently used quite extensively in early America: “Nearly the same method of providing for the poor prevails through all our states,” Jefferson wrote. By contrast with this minimal, natural rights welfare, laissez-faire proponents typically argue against all welfare programs. To be sure, laissez-faire economics is compatible with voluntary charity. And in our day, laissez-faire advocates (a group including many libertarians) frequently display admirable personal generosity toward the poor.

The Progressive Era charge that natural rights free-market economics is unchristian rested on a flawed understanding of Christianity. Social Gospel Christianity, one may argue, was not genuinely Christian because it denied the key Christian belief in the primacy of the afterlife over life on earth. It also implicitly denied original sin and so sought a secular, earthly redemption that, to an orthodox Christian, is unattainable.

The central error of the Social Gospel was its subordination of religion to politics and economics. By understanding Christianity as being fulfilled through politics and economics, it reduced Christianity to politics and economics. Today’s progressive Christianity retains the eschatology of traditional Christianity, and so it avoids the worst theological error of the Social Gospel. But like their Social Gospel predecessors, progressive Christians continue to insist on economic interventionism and income redistribution, while providing no persuasive argument for the theological necessity of such policies. In fact, Americans can be good Christians if they support minimal public welfare and are privately generous to the less fortunate.

The Way Ahead

The early Progressives noticed and addressed many legitimate problems of industrial society—but arrived at erroneous conclusions and solutions, many of which are being implemented to this day. The poor have always been with us, but they became much more visible as they crowded into our growing urban centers. Their problems could have been addressed by a combination of the free market, police power regulations at the state level, private charity, and minimal public welfare.

Instead, the early Progressives captured the moral imagination of countless economic reformers. Though Progressivism went into abeyance after World War I, it resurfaced in the 1930s with Roosevelt’s New Deal, which echoed many progressive arguments and carried out many of their policies. The next great surge in progressive economics occurred as a result of the Great Society. Since the 1960s, we have seen the federal government steadily increase its role in the economy, with only a moderate claw-back during the Reagan years. To this day, the American political system takes its bearings from the fundamental criticisms of the free market made over a century ago by Progressives, expressed through various interventions such as minimum wage laws, agricultural and industrial subsidies, and efforts to “correct” an allegedly unjust gap between rich and poor by way of income redistribution.

Yet despite a century of political success, interventionists have steadily failed to confront the strongest moral, theoretical, and practical arguments for free markets and against interventionism. Their failure provides an opening to advocates of economic liberty. A responsible, natural rights free-market economy (and not an austere system of laissez-faire) can and should capture the moral imagination of a new cohort of reformers. We can recover the natural rights regime of the Founders and their successors. But that recovery will mean returning to the Progressive Era confrontation between free markets and interventionism, seeing the natural rights regime and natural rights free-market economics as real, living, moral options, and reversing the choice the nation made to depart from its Founding. Advocates of economic liberty might reflect on and promote the Supreme Court’s opinion in Lochner. In delivering the opinion of the Court, Justice Rufus Peckham wrote:

There is no reasonable ground for interfering with the liberty of person or the right of free contract by determining the hours of labor in the occupation of a baker. There is no contention that bakers as a class are not equal in intelligence and capacity to men in other trades or manual occupations, or that they are not able to assert their rights and care for themselves without the protecting arm of the State, interfering with their independence of judgment and of action. They are in no sense wards of the State.

Lochner v. New York, at 57.

When most Americans return to the belief that adults can be presumed to be able to take care of themselves, we will have taken a large step toward recovering our economic liberty. The rest of the journey may take as long as the progressive march through our government and economy. We can copy their formula for long-term success: A principled critique of the existing order, combined with a clearly articulated vision of the new order.


About the Author

Luigi Bradizza, PhD, is Associate Professor of Political Science at Salve Regina University and the author of Richard T. Ely’s Critique of Capitalism.

The Progressive Critique of Free Markets: A Response | Part 4

The Charge of Worker Exploitation: Labor Unions and the Minimum Wage

In the late 19th-century, America’s free-market economy featured strong protections for private property and contract rights, prices of goods and services determined by supply and demand, and very little government intervention. Wages and prices were unregulated, as were most business operations. Government intervention was largely confined to stopping uses of property deemed harmful to others, under the long-standing sic utere doctrine, according to which people were forbidden from using their property in ways that injured the rights of others. As a result, the economy grew very rapidly during this time, and standards of living improved for everyone. However, economic gains were very unevenly distributed, prompting progressive critics to seek changes.

Progressive political economists made a number of arguments against free markets that gained increasing support among politicians, journalists, academics, clerics, and ordinary people, and eventually led to economic and political reforms of the free-market economy. These critics believed that workers were being exploited by businessmen on the grounds that they could force workers to accept low wages.

The political circumstances of the time seemed to confirm Progressives’ assertions. Because there were so many industrial workers available for hire—some coming from Europe in wave after wave of immigration in the decades before World War I, others moving from farms to urban areas—employers were provided with an abundance (and even an overabundance) of workers. In consequence, workers were forced to compete against each other for an occasionally scarce supply of industrial jobs. This had the effect of driving down some wages. Progressives complained that because wages were determined strictly by the free-market law of supply and demand, there was no necessary connection between wages and the cost of living. As the progressive economist John R. Commons put it:

The product of labour in all enterprises, like the product of the other factors of production, is subject to the law of diminishing returns. The larger the supply, the lower will be the value of the marginal product compared with the labour of producing it. Hence, whatever controls the supply of labour of a given class controls the marginal value of its product, and thereby the wages of the producers. The rate of wages is not determined by the cost of living.

Because workers could be paid less than what it cost them to live, the free market was accused of failing them in the most palpable and self-contradictory way possible: It was an economic system that failed to meet their most basic economic need for survival.

Progressives proposed an end to wage competition by means of labor unions. Unionized collective bargaining would prevent businessmen from playing workers against of each other and pushing down wages. The progressive political economist Simon Patten expressed the view that unions should be used “to secure the rewards of his work to the common laborer.” Put plainly, unions were needed to prevent workers from being cheated. Underlying this view of labor relations was the belief that workers and businessmen approached each other with unequal economic and, therefore, unequal bargaining power. Because workers were poorer than businessmen, they could not hold out for higher wages for very long without starving. This made them powerless and prisoners of their elemental fear of suffering and death. Such men could not be said to be truly free; they were more properly described as coerced by their fear. As the progressive legal reformer Roscoe Pound wrote, favorably quoting Lord Northington: “Necessitous men are not, truly speaking, free men, but, to answer a present exigency, will submit to any terms that the crafty may impose upon them.” Commons described their condition as one of “wage-slavery,” or “the dependence of one man upon the arbitrary will of another for the opportunity to earn a living.” By contrast, prosperous businessmen could use their greater wealth to outwait recalcitrant workers. Because workers were exploited by businessmen operating within the rules of the economic system, they were coerced by the system itself, that is, by free-market economics. What to free-market defenders seemed like an equal right to private property and voluntary contracts was to Progressives an immoral, systemic regime of coercion that indicted free-market economics to the core.

Today’s critics of free markets continue to echo the early progressive moral arguments against worker exploitation. They argue that lower-end workers must unionize if they are to prosper. Where unionization is difficult, they advocate for a substitute—the $15 per hour minimum wage. This proposal (already adopted by some cities and states) is meant to raise low-end wages in the face of economic stagnation and wage competition.

Progressive Era proponents of unionization did not understand that unionization intended to increase wages above the free-market rate had the effect of decreasing employment. They believed that employers could simply set wages higher if they wished. And yet, the same economic principles that caused Progressives to reject wage competition could be used to show that, in the absence of productivity increases, unions increase the cost of employment to the employer, thereby reducing employment. Workers then and now left unemployed by unionization are the hidden victims of this progressive reform.

Since the dawn of the industrial age, the path to prosperity for ordinary workers has been by way of increased productivity (that is, increased output per unit of input), not unionization. The same economic and moral logic that argues against unions can be applied to increases in the minimum wage. The hidden cost of a minimum wage is higher unemployment among some of the most vulnerable Americans—those without the work experience or training to warrant that wage. The economic cost of unionization and the minimum wage is simultaneously a moral mark against these forms of intervention.

Despite (or perhaps because of) the economic arguments against efforts to boost wages through unions and the minimum wage, the early Progressives (and many Americans since) were seen to have properly indicted the morality of the free market for sometimes not paying workers a living wage. It is certainly true that many workers at that time were not paid enough to get by. But here the progressive critique was exaggerated because it measured individual instead of household income combined with support from other sources, such as family members and neighbors. Furthermore, over time workers could gain experience and skill or benefit from productivity increases—and then earn higher wages. These were voluntary and therefore morally untainted methods of advancement.

Progressives were aware of some of these responses and rejected them. For example, Patten countered that “[d]ifficulties in towns are too massive to be surmounted by the altruism of such service as can be rendered by the mutual aid of family members and of neighbors.” Patten was at least partly correct. Urbanization led to an excess supply of labor and had in some respects made life more difficult for workers. As Ely pointed out, in early America, “independent farmers who tilled their own soil” could support themselves and thereby avoid being at the economic mercy of others. Moreover, “an abundance of unoccupied land furnished [a ‘hired man’] a frequent escape from his subordinate position.” Poverty was in some respects easier to bear in the agricultural economy that preceded the industrial economy. As Patten put it, the “poverty men of the country had some options in nature during the seasonal periods of plenty.” In that sense, they were more autarkic than urban dwellers, who had only their wages and who were therefore more vulnerable to unemployment.

But the economic vulnerability brought about by industrialization and urbanization was only part of the story. As even Patten acknowledged, pre-Industrial Era farmers were poor. As America industrialized, such men voluntarily urbanized in order to improve their material condition. Industrialization produced unquestionable benefits for millions of ordinary Americans, and so it was a great moral victory in the age-old struggle against poverty. All the same, urbanization then and now reveals a clear need for some way to ensure that the most vulnerable Americans do not starve in the event that their family and friends cannot help them during hard times. But unionization and the minimum wage were problematic solutions because of their harmful effects on vulnerable workers seeking employment.

Ideally, free-market defenders would have provided a persuasive alternative to Progressivism at the time. Had they done so, they might have halted the progressive intellectual advance and directed the political system toward free-market solutions to the problems of industrialization. But the absence of powerful defenders of the Founders’ regime in that generation, especially in the academy, meant that the Supreme Court remained the only bulwark capable of arguing against progressivism.

In the period during and just after the Progressive Era—until it was broken by President Franklin Roosevelt and the New Deal—the judiciary harbored some of the most principled and thoughtful defenders of the Founders’ vision of economics. Regrettably, the judiciary had a limited intellectual visibility and influence. All the same, in a particularly important case, the Supreme Court turned away an attempt by progressives in Congress to institute a minimum wage for women in Washington, DC, by way of the Minimum Wage Act of 1918. That act was ruled unconstitutional in Adkins v. Children’s Hospital. Writing for the majority, Justice George Sutherland acknowledged that some women need income support. But as a means to achieving this, he deemed the minimum wage unjust:

To the extent that the sum fixed exceeds the fair value of the services rendered, it amounts to a compulsory exaction from the employer for the support of a partially indigent person, for whose condition there rests upon him no peculiar responsibility, and therefore, in effect, arbitrarily shifts to his shoulders a burden which, if it belongs to anybody, belongs to society as a whole.

He continued: “Certainly the employer, by paying a fair equivalent for the service rendered, though not sufficient to support the employee, has neither caused nor contributed to her poverty. On the contrary, to the extent of what he pays, he has relieved it.” In other words, it is not the employer’s fault that the employee is poor. Her wages, however low they might be, are just because they represent the value of her labor. And yet the employer is unjustly made to bear the full burden of rescuing her from poverty—beyond the wages that he is already paying her and that take her part of the way to solvency. The responsibility for raising her income should instead fall to society, because the moral obligation to prevent her from starving does not rest solely with her employer.

Sutherland’s moral analysis indicates that some form of minimal public welfare, and not the minimum wage, is a more appropriate and just response to the presence of degrading poverty. In his decision, Sutherland argued that unions are a constitutionally permissible way to increase wages. He presumably had in mind purely voluntary unions that do not seek coercive methods to prevent non-union laborers from taking their jobs. Coercive unions are an unjust imposition on the employer because they forcibly prevent employers from firing unionized workers at will and substituting willing, non-union workers. If workers cannot earn a living wage by means of individual employment or voluntary unions, a more just and moral alternative remains direct income support, if necessary, in the form of minimal public welfare.


About the Author

Luigi Bradizza, PhD, is Associate Professor of Political Science at Salve Regina University and the author of Richard T. Ely’s Critique of Capitalism.

The Progressive Critique of Free Markets: A Response | Part 3

The Attack on Classical Economics

The early progressive attack on natural rights and limited government amounted to a charge of dogmatism, that is, a zealous attachment to the false idea of natural rights, the social contract, and government as an artificial creation aimed at securing natural rights. Progressives argued instead that government pre-exists men and is not an artificial creation of men. They levelled that same charge of dogmatism at classical economics, which is the economic expression of natural rights and limited government. Progressives claimed that classical economics is a rigidly deductive economic system premised on one central ideal: that self-interest can be harnessed as a reliable impetus to economic prosperity. From that one premise, Ely argued, classical economists then blindly deduced a range of dogmatic economic commandments and prohibitions. For example, they insisted that wages and prices must be governed by the law of supply and demand, that no impediments be raised to privately arrived at contracts, and that private property gained by the use of this system must be respected and defended as justly and properly acquired. The free market was presented as necessary and natural because it respects everyone’s right to self-seeking actions, and because self-seeking actions were seen as reliable and productive guides to economic activity.

Progressives instead argued against both the premise that self-interest is a proper starting point for an economic system and the rigidly deductive method that, in their view, propagates this erroneous premise in the face of damaging economic consequences. As Henry Adams put it: “It is not true that, when a man advances his own interests or what he believes to be his own interests, he thereby necessarily advances the interests of society.” In other words, self-interest is not consistent with the common good. In his more progressive years, the political economist John Bates Clark argued that the conception of the self-interested man that forms the unit of analysis of classical economics is a mistake: “The assumed man is too mechanical and too selfish to correspond with the reality; he is actuated altogether too little by higher psychological forces.” Clark warned that the free market call of “‘[e]very man for himself’ is the principle of disorganization and chaos.”

With respect to free-market prescriptions, Progressives held that economic systems must be judged on the basis of their results, particularly the results for the most vulnerable members of society. And on that count, they argued that the free market was a failure. They wanted a more flexible economic system that would proceed empirically and which could be adjusted and planned by the government so as to produce more widely distributed benefits. Ely called this approach to economics the “look and see” method. Progressives argued for an economic system based, not on self-interest and competition, but rather on social obligation and cooperation. In their economic decisions, men should consciously seek the good of all and not just their self-interest. Progressives seized on one of the most powerful arguments against the free market: that the self-interest at the root of the free market has too strong a tendency to degenerate into selfishness. In short, Progressives argued that the moral core of the free market was deeply immoral.

In our day, Ely’s particular approach to economics continues to comprise a part of the progressive understanding of economics. As such, Progressives embrace government planning (for example, in health care) and continue to be skeptical of attempts by economists to harness self-interest in the service of individual and national prosperity. They work toward social obligation and cooperation by, in general, compelling distribution of income at the cost of voluntary, free-market methods of increasing wealth and economic security.

As an alternative to limited government, natural rights, and free markets, the early Progressives proposed their own systematic approach: social science, a discipline that includes economics, and which would replace the individual self-interest of the free market with an explicit orientation on the part of economic planners toward their vision of the common good, which they understood as the greatest possible flourishing of each individual. Progressives promised that social science would yield genuine knowledge of human affairs along the lines of the more traditional and very successful “hard” sciences. That knowledge would be gained empirically, following the scientific method, and not assumed dogmatically, as was allegedly the case with natural rights and classical economics.

Rather than following abstract principles or being guided by experience built up over centuries, Progressives sought to make the world anew. Just as with the natural sciences, the practitioners and leaders of social science would be scientific experts. These experts would replace the allegedly chaotic, unplanned, and unjust workings of the free market with rational, scientific, neutral, impartial, and just management of the economy. Such experts could be established in bureaucracies that in their very mission would be aimed at public-spiritedness and the common good of society. They could correct alleged abuses, such as worker exploitation and an unjust distribution of wealth. These experts would free us from the distractions, injustices, incompetence, partisanship, and paralysis of traditional democratic politics.

There would still be some room for democratic politics within this new system. Elected leaders would identify problems, authorize and fund bureaucratic solutions, and hold bureaucrats accountable. But the implementation of economic policy would be carried out by bureaucrats. The prominent progressive intellectual Herbert Croly made an especially powerful case for this reform. He outlined the basic structure of the new government:

In order to understand the function which the administration ought to perform in a social democracy a sharp distinction must be drawn between the administration and the executive.… [The executive’s] primary business is organizing a temporary majority of the electorate, and of carrying its will into legal effect.

By contrast, administrative “officials do not in theory exert any influence upon the policy of the government. These are professional servants, whose business it is to contrive the means necessary to execute existing laws and to carry out any policy which has been decided upon by a departmental chief or by the cabinet.” No human problem would be beyond the bailiwick of these expert administrators. In particular, the economy stood to be regulated in detail by such experts, initially by modest intrusions such as Progressive Era industrial commissions, later by an array of federal and state agencies spawned by the New Deal and the Great Society.

In our day, progressivism and the apparatus it created to govern America informs much of the nation’s political agenda, often in opposition to proponents of limited government. Inspired by progressivism and unconstrained by a belief in natural rights, Congress today routinely passes laws without regard to any constitutional grounding in its limited Article I, Section 8 enumerated powers. It has also delegated a portion of its legislative authority to administrative state agencies. Congress permits these bureaucracies to pass binding regulations, each of which has the power of the law. Though they are subject to congressional oversight, bureaucrats are free from direct democratic accountability. Moreover, their powers often encompass two or more of the branches of government, in apparent violation of the separation of powers. Though the early Progressives are rarely cited by contemporary progressives, in their departures from the Founders’ constitutional norms, both Congress (in delegating its power) and the administrative state (in its rule without democratic control) have helped to fulfill the political intention of the early Progressives.

Despite some important political victories, today’s progressives have prematurely claimed intellectual victory. Though contemporary progressives believe that the theory of natural rights has been refuted, a small-but-vigorous intellectual cohort has argued for its return. Contemporary defenders of natural rights make the philosophic and moral argument that property belongs by nature to the person who creates it—and not to the government that merely protects it. And they also argue that a larger, progressive government crowds out the free market by competing for resources, because government is funded by wealth extracted from free-market producers. Moreover, they point out that administrative state lawmaking qualifies and harms self-government because bureaucrats are not directly answerable to the voters.

Critics of progressivism also call for a more nuanced understanding of the morality of self-interest in economics. Progressives have routinely blurred the difference between rational self-interest and selfishness. The former is compatible with justice to oneself and one’s loved ones—and it is also compatible with justice to others. Besides not necessarily being of any harm to others, self-interest is the source from which citizens generate the wealth needed for generosity to others, without which charity is little more than a good intention. Perhaps most importantly, rational self-interest leads to a great deal of voluntary and peaceful cooperation with others, which causes otherwise self-seeking men to become habituated to serving others in the course of serving themselves. By contrast with rational self-interest, selfishness is narrow, cramped, and asocial. It is either indifferent to others or understands itself as serving the self specifically to the exclusion of or in opposition to others. Rational self-interest need not degenerate into selfishness, although any thoughtful person would readily acknowledge that that is a perpetual risk of rational self-interest.

With respect to narrow considerations of economic efficacy, rational self-interest has been the source of the greatest outpouring of wealth in human history. Not the immiseration of the poor—but rather their elevation to unheard of wealth—has been the main story of American rational self-interest in economics. This impressive practical outcome is simultaneously a great moral victory for the free market in the struggle against poverty.


About the Author

Luigi Bradizza, PhD, is Associate Professor of Political Science at Salve Regina University and the author of Richard T. Ely’s Critique of Capitalism.

The Progressive Critique of Free Markets: A Response | Part 2

The Attack on Natural Rights and Limited Government

The progressive attack on free markets went beyond the practical and moral attack on the visible effects of the free market to an attack on its underlying principles. Progressives rejected the theoretical foundations of classical economics and the regime of natural rights upon which it rested. These attacks took the same form in both cases. They charged that both systems were rigidly theoretical, outdated, and disconnected from real world, contemporary, practical effects. They considered contemporaneous defenders of the Founding and of the free market to be ideologues for preferring their theory despite what Progressives claimed were its real-world failings in economics and politics.

To understand the progressive attack on natural rights, we must first understand natural rights. Natural rights are “inalienable,” as the Declaration of Independence states. Our rights are natural insofar as we are born with them. These natural rights include our rights to life, liberty, and property. It is the task of government to “secure these rights,” as the Declaration says. Rights are not gifts or endowments of the government. Government is an artificial creation established by and subordinate to the “consent of the governed.” Accordingly, ordinary citizens hold sovereignty over their government. Government is, so to speak, a tool of self-governing people by which they protect their rights. As such, the structure of government described in the Constitution of 1787 is aimed at setting up a limited government that secures our natural rights and little else.

In the economic realm, this especially means a vigorous and effective protection in law for our natural right to property and contract. That we have a natural right to contract is seen quite clearly in the Declaration of Independence, where our right to contract expresses itself in a social contract between sovereign individuals that establishes the government. These property and contract rights are centrally important to the economy. Private property rights protect private capital investments and profits. Without private property rights, there can be no secure holdings of property over time, which makes economic activity nearly impossible. Contract rights permit mutually beneficial, voluntary exchanges of goods and services between individuals. Without contracts rights, such exchanges might not occur, to the disadvantage of the individuals and the nation.

America’s founding philosophy, Constitution, and legal system were based on and in turn defended and promoted natural rights. The political and economic liberty created by the protection of natural rights made it easy for the United States to adopt the new discipline of what we now call classical economics. Political economists such as Adam Smith and David Ricardo proposed a system of free-market economics based on a right to private property, a right to contract freely, and a system of prices determined by supply and demand. For the first time in human history, self-interest in economics was lauded and, especially in America, openly institutionalized.

The economically coordinated self-interest of individuals, with willing buyers and sellers engaged in voluntary and mutually beneficial exchange, would secure the common good understood as individual and national prosperity. This economic system fit very easily into and was a logical outcome of the political framework provided by the Founders. The free market was seen as a moral system because it was based on a respect for our natural rights. And it worked very well. In the decades after the Civil War, America industrialized, entered the Gilded Age, and became the wealthiest country in human history.

The early Progressives, however, rejected both the Founding principles and the economic system of classical economics that it protected. They rejected the Founders’ belief in natural rights—in particular a natural right to property and contract. According to the influential progressive political economist Richard T. Ely, the doctrine of natural rights was part of “an unscientific eighteenth century social philosophy” that “has long ago been totally discredited by science.” There was never an actual historical state of nature in which men formed a government based on a social contract. Instead, Progressives argued, government is natural to man and not an artificial creation of man. It pre-exists the individual, and the individual cannot be understood outside government. Rights are not natural. Rather, they come from government, which pre-exists and forms the individual. As Ely wrote: “Rights are acquired in and through society,” not belonging to individuals by nature. In consequence, the government should be free to prevent allegedly exploitative contracts, regulate wages and prices, and tax the wealthy to support the social development of others as the government deems fit. Doing so violates no natural right to property because there is no natural right to property.

In addition to rejecting the doctrine of natural rights and the principles on which classical economics is based, Progressives also rejected the Founders’ conception of limited government. The Founders and their 19th-century successors believed that (to pick one example) economic intervention aimed at supporting workers’ incomes by means of a minimum wage was not only imprudent, but also an unjust, immoral, and unconstitutional violation of property and contract rights. They believed that legislating in this area would take us beyond the proper limits of government power.

It is true that many Founders departed from strict free-market theory by supporting, for example, tariffs or a national bank. But these departures were intended as a means of encouraging domestic enterprise, not inhibiting the private property and contract rights that lay at the core of the free market. The Founders wanted to secure the freedom of individuals to use and profit from their talents and hard work. They wanted productivity and national prosperity. And so, while many supported tariffs, they also supported free enterprise and not domestic economic intervention and guidance. In consequence, the regime that the Founders put in place leaned heavily in the direction of limited government.

In general, the early Progressives attacked limited government as an obsolete holdover from the 18th century. For Ely, the Founders understood liberty “in its negative aspects. Restrictions and restraints are found upon liberty, and it is thought that once we clear these away, liberty will assert itself as a benign force.” Negative liberty, which confined government to protecting only our natural rights, was based on the belief that citizens would be capable of living free lives so long as they were not impeded from doing so. By contrast, Progressives argued for a more positive liberty that aimed at moving citizens toward allegedly more enhanced and fulfilled lives.

The doctrine of positive liberty served as the permission for a range of economic interventions and programs that would have been seen as violations of property and contract rights by the Founders and their 19th-century successors. Today, to pick just a handful of examples among many, we have programs such as community-development grants, new homebuyer subsidies, and alternative-energy programs. These programs are defended on the grounds that they enhance the lives—the positive liberty—of Americans. There is no theoretical upper limit to positive liberty and therefore no limit in principle to how large the government might grow in efforts to promote it. The doctrine of positive liberty therefore threatens limited government.

During the Progressive Era, judges tended to oppose Progressivism and support robust free-market legal principles. And so a range of progressive interventionist measures aimed at allegedly “protecting” workers from what Progressives imagined was exploitation were seen by the courts as illegitimate violations of limited government and property and contract rights (including the contract rights of workers), a legal impediment that deeply upset Progressives.

To be sure, economic regulations were permitted in free-market America, under the long-established “police power” of state legislatures. The police power is the authority of the legislature to regulate private and economic life with a view to protecting health, safety, and morals. The police power permitted the government to regulate or outlaw uses of one’s property if such uses would violate the rights of others. Under the police power, states could, if they wished, legislate against, for example, the spread of disease (“health”) or unsafe working conditions (“safety”) or public vulgarity (“morals”), among other offenses. Morals legislation was justified on the grounds that licentiousness is incompatible with the moral conditions of a free society. Such legislation could extend to any behavior that threatened the moral order of society or the individual self-control necessary to free government. In other words, morality understood as one of the conditions of freedom took precedence over economic gain. The police power could not, however, be used for specifically progressive ends. For example, it could not be used to prevent alleged wage exploitation or to redistribute wealth—because doing so would violate one’s natural right to property and contract, and it would not intrude on the moral conditions of freedom.

The early Progressives were deeply upset that so many of the interventionist measures for which they called were rejected as falling outside the police power. One case in particular drew their strong protests. In the landmark case of Lochner v. New York, the Supreme Court overturned a New York law that limited, on health and therefore police power grounds, the number of hours per week that bakers could work in bakeries. The majority argued that while the law was presented as a health measure, it was in fact a surreptitious attempt by New York to “protect” workers from purported exploitation by employers who wanted them to work excessive hours. The Court argued that bakers were mature adults capable of looking after their own economic interests and forming contracts and did not need to be protected from alleged “exploitation.” The Court struck a blow for limited government and free markets, but earned the opposition of Progressives, who were anxious to expand greatly the government’s regulation of the economy.

Despite progressive opposition, legal support for a robust right to property and contract continued until the 1930s. But under pressure from Franklin Roosevelt, the Supreme Court eventually succumbed to economic interventionism in NLRB v. Jones & Laughlin Steel Corp., ending the so-called Lochner Era of relatively unrestrained free markets in America. Ever since, the Supreme Court has permitted an extremely broad range of economic interventions by both the federal and state governments—interventions that go well beyond the traditional understanding of and limits to police power. It took decades of steady intellectual, political, and legal efforts for Progressives to win their battle over limited government.

In our day, the result is most apparent in tens of thousands of pages of regulations governing nearly every aspect of the economy, promulgated by unelected bureaucrats and often qualifying free-market arrangements.

Legislation aimed at abating alleged worker exploitation now includes the minimum wage, limits on hours worked, and mandatory vacation and family leave time. These laws fall outside permitted police power legislation because they touch on contractual arrangements that violate no one’s natural rights. Moreover, the federal government routinely passes workplace and product safety laws in violation of federalism and the traditional understanding that only the states are permitted to exercise a general police power.


About the Author

Luigi Bradizza, PhD, is Associate Professor of Political Science at Salve Regina University and the author of Richard T. Ely’s Critique of Capitalism.

The Progressive Critique of Free Markets: A Response | Part 1

The American economy today is mixed: It is partly free, vibrant, prosperous, and entrepreneurial—and partly unfree, obstructed, and lethargic. The free part is governed by the principles of our Founding and the U.S. Constitution, which safeguard private property and contract rights that permit us to gain, hold, use, and dispose of property. This legal structure has produced the most prosperous and innovative economy in human history. The unfree part of our economy, by contrast, is caused by changes—many of which are still in place today—brought about by Progressive thinkers and activists beginning in the late 19th century. To grasp what has happened, what may come, and how to revive our economic health, we must grasp the significant moral differences between the free-market political economy of the Founders and the interventionist political economy of the Progressives.

For free-market proponents, including America’s Founders, morality demands a respect for private property and contract rights. The economic system must therefore be subordinated to and consistent with property and contract rights. Men must be free to use their talents and improve their material circumstances in voluntary agreements with other men, provided they do not directly violate the right to life, liberty, and property of other people. The goals of such economic activity are individual and national prosperity. Though leery of government intervention, America’s Founders were not opposed to economic regulations. Their political economy is compatible with and requires a degree of regulation with a view to health, safety, and morals so as to prevent uses of property harmful to the rights of others and to maintain the conditions of freedom. In consequence, free-market political economy permits and even requires economic regulations to restrain commercial activity that is harmful to our moral health, such as drug trafficking and prostitution.

This approach is distinct from and should not be confused with laissez-faire economics. While laissez-faire economics is also based on private property and contract rights, it often prohibits salutary government regulations. For example, natural rights free-market economics allows state and local governments to regulate food safety and prohibit the sale of unsafe drugs, whereas many laissez-faire advocates improperly see such regulations as unjust intrusions on an individual right to voluntary exchange. Laissez-faire advocates typically argue for the complete or near-complete separation of state and economics.

The progressive reaction against free-market economics originated during the Progressive Era, a period that lasted from about 1880 to 1920. At that time, reform-minded political economists rejected the free market and the limited government bequeathed to us by the Founding Fathers. Progressive Era political economists such as Richard T. Ely, John R. Commons, and Simon Patten believed that limited government was based on a false theory of natural rights, and that private property and contract rights were therefore purely a creation of the government and not ours by nature. While they rejected natural rights and limited government on theoretical grounds, they also thought that the Founders’ political economy led to a damaging selfishness that harmed ordinary citizens. They thought the free market immoral because it harmed workers by underpaying and overworking them and, in general, by permitting the economically powerful to dictate harsh terms of employment to the economically weak. They subordinated the discipline of economics to a moral ideal of redistributive social obligation and cooperation, with the goals of more widely distributed economic benefits, the maximum flourishing of each individual, and a workplace that does not compel men to choose between being unemployed and submitting to harsh terms of employment. Like the free-market proponents they sought to replace, Progressives wanted individual and national prosperity, but believed that the free market could secure neither.

The progressive rejection of natural rights permitted them to propose a massive increase in the scope, size, and power of the federal government. They wanted intrusive and elaborate economic regulations aimed at reducing the power of businessmen, managing the economy, and improving the wages and working conditions of ordinary workers. They wanted much greater assistance for and relief from conditions harmful to the poor. They wanted government staffed by a permanent administrative bureaucracy of supposedly impartial, scientific experts. They wanted social and economic problems analyzed and resolved by elites professionally trained in the new discipline of social science. Above all, progressives wanted a broad moral reorientation away from competition and self-interest and toward cooperation and central planning.

These Progressive Era political economists were joined by progressive academics, politicians, journalists, and social justice activists. They called their movement “Progressivism” because they believed that Americans were on the cusp of a new era of progress whose goals and methods would make obsolete the political and economic thought of the past and propel us toward transformative and redemptive social, economic, and political reforms. Over time, they gradually altered America’s legal system and politics to make it more tolerant of interventionism and less accepting of natural rights and economic liberty. Their gradualism permitted them to present themselves as prudent—and thereby deflect charges of radicalism. They were careful not to devastate the economy by totally repudiating private property and contract rights. They favored a mixed economy and not a thoroughgoing socialism. In the many decades since the Progressive Era, one generation after another has been inspired by progressive visionary idealism to take up and advance the cause of progressive reform. In our day, self-described liberals and progressives in academia, think tanks, the media, and government are the heirs of these early Progressives.

Today’s interventionists are opposed by defenders of economic liberty, largely professional economists and economics professors, who regularly deploy very technical, pro-free-market economic theories to argue against intervention—often to little or no effect. Progressives have placed their economic views in the service of moral concerns and are unimpressed by pro-free-market technical refutations. If we are to recover our economic liberty, we must return to and confront the original moral arguments for progressivism made during the Progressive Era, and in particular, the belief that ordinary people cannot properly secure their interests by means of the free market. The critique of free markets as impractical and immoral was not as sound as the early Progressives imagined. As the heir to that early progressive critique, today’s progressive economics is no sounder in its rejection of free markets.


About the Author

Luigi Bradizza, PhD, is Associate Professor of Political Science at Salve Regina University and the author of Richard T. Ely’s Critique of Capitalism.


Pollution in Pre-Industrial Europe

Last week, I wrote about Jason Hickel’s romantic idea that people in the past “lived well” with little or no monetary income. I noted that prior to the Industrial Revolution, clothing was immensely expensive and uncomfortable. The cotton mills changed all that.

As a French historian noted in 1846, “Machine production…brings within the reach of the poor a world of useful objects, even luxurious and artistic objects, which they could never reach before.”

Today, I wish to turn to pollution. It is well known that industrialization helped to pollute the environment, but that does not mean that air and water were clean before factories and mills came along! Compared to today, our ancestors had to endure horrific environmental conditions.

Let’s start with air quality. In the 17th century London, Claire Tomalin observed in Samuel Pepys: The Unequalled Self, “Every household burnt coal … The smoke from their chimneys made the air dark, covering every surface with sooty grime. There were days when a cloud of smoke half a mile high and twenty miles wide could be seen over the city … Londoners spat black.”

In a similar vein, Carlo Cipolla in his book Before the Industrial Revolution: European Society and Economy 1000-1700, quotes from the diary of British writer John Evelyn, who wrote in 1661: “In London we see people walk and converse pursued and haunted by that infernal smoake. The inhabitants breathe nothing but an impure and thick mist, accompanied by a fuliginous and filthy vapour … corrupting the lungs and disordering the entire habit of their bodies.”

The streets were just as dirty. John Harrington invented the toilet in 1596, but bathrooms remained rare luxuries two hundred years later. Chamber pots continued to be emptied into streets, turning them into sewers. To make matters worse, even large towns continued to engage in husbandry well into the 18th century. As Fernand Braudel noted in The Structures of Everyday Life, “Pigs were reared in freedom in the streets. And the streets were so dirty and muddy that they had to be crossed on stilts.”

Lawrence Stone observed in The Family, Sex and Marriage in England 1500-1800 that “In towns in the eighteenth century, the city ditches, now often filled with stagnant water, were commonly used as latrines; butchers killed animals in their shops and threw the offal of the carcases into the streets; dead animals were left to decay and fester where they lay; latrine pits were dug close to wells, thus contaminating the water supply. Decomposing bodies of the rich in burial vaults beneath the church often stank out parson and congregation.”

A “special problem” in London, Stone wrote, was the “poor holes” or “large, deep, open pits in which were laid the bodies of the poor, side by side, row by row. Only when the pit was filled with bodies was it finally covered with earth.” As one contemporary writer, whom Stone quotes, observed, “How noisome the stench is that arises from these holes.” Furthermore, “great quantities of human excrement were cast into the streets at night … It was also dumped into on the surrounding highways and ditches so that visitors to or from the city ‘are forced to stop their noses to avoid the ill smell.’”

According to Stone, “The result of these primitive sanitary conditions was constant outbursts of bacterial stomach infections, the most fearful of all being dysentery, which swept away many victims of both sexes and of all ages within a few hours or days. Stomach disorders of one kind or another where chronic, due to poorly balanced diet among the rich, and the consumption of rotten and insufficient food among the poor.”

Then there was “the prevalence of intestinal worms,” which is “a slow, disgusting and debilitating disease that caused a vast amount of human misery and ill health … In the many poorly drained marshy areas, recurrent malarial fevers were common and debilitating diseases … [and] perhaps even more heart-breaking was the slow, inexorable, destructive power of tuberculosis.”

The situation was no better on the European mainland. In the middle of the 17th century, Queen Anne of Austria and mother of Louis XIV noted that “Paris is a horrible place and ill smelling. The streets are so mephitic that one cannot linger there because of the stench of rotting meat and fish and because of a crowd of people who urinate in the streets.”

In the 19th century, pollution remained a problem. In Inside the Victorian Home: A Portrait of Domestic Life in Victorian England, Judith Flanders noted Waldo Emerson’s observation that “no one … [in England] wore white because it was impossible to keep it clean.” According to Flanders, hair brushes looked “black after once using” and tablecloths were laid just before eating, “as otherwise dust settled from the fire and they became dingy in a matter of hours.”

In 1858, the stench from the River Thames was so bad that “the curtains on the river side of the building were soaked in lime chloride to overcome the smell”. The effort was unsuccessful, with Prime Minister Benjamin Disraeli once fleeing a committee room “with a mass of papers in one hand, and with his pocket handkerchief applied to his nose,” because the stench was so bad. He called the river “a Stygian pool, reeking with ineffable and intolerable horrors.”

Keep in mind that even after the Industrial Revolution had begun, much of the pollution was still non-industrial. Henry Mayhew, an English social researcher and journalist, found that the Thames contained “ingredients from breweries, gasworks, and chemical and mineral manufactories; dead dogs, cats, and kittens, fats, offal from slaughterhouses; street-pavement dirt of every variety; vegetable refuse; stable-dung; the refuse of pig-styes; night-soil; ashes; tin kettles and pans … broken stoneware, jars, pitchers, flower-pots, etc.; pieces of wood; rotten mortar and rubbish of different kinds.”

There can be no doubt that industrialisation did great damage to the environment during the second half of the 19th century. But it also created wealth that allowed advanced societies to build better sanitation facilities, and spurred the creation of an enlightened populace with a historically unprecedented concern over the environment and a willingness to pay for its stewardship through higher taxation.

Fast-forward to 2015 and the BBC reported “more than 2,000 seals have been spotted in the Thames over the past decade … along with hundreds of porpoises and dolphins and even the odd stray whale … There are now 125 species of fish in the Thames, up from almost none in the 1950s.” Similarly, average concentrations of suspended particulate matter in London rose from 390 in 1800 to a peak of 623 in 1891, before falling to 16 micrograms per cubic meters in 2016. Today, air in the capital of the United Kingdom ranks as one of the cleanest among the world’s major cities.

Contemporary evidence clearly shows that the lives of many Western Europeans before industrialisation were, at least by today’s standards, deeply unpleasant. It would be a stretch to conclude that they have “lived well.”


About the Author

Marian L. Tupy is a senior policy analyst at the Cato Institute and editor of HumanProgress.org

Europe is Taxing and Regulating Tech, Now It's Lagging Behind in Innovation

If we analyze the ranking of the main technological companies (2017), there is not a single European among the top fifteen. The vast majority are North American and Chinese companies.

It is even more worrying. If we go to the top 50 global technology companies, only four are European, but when we analyze those four, it is more than debatable that they are leaders in innovation, patents and market power. The European indexes of “technology” include, diplomatically, a few industrial conglomerates that have long lost the technological race.

This is not by chance or bad luck. It is by design, sadly.

A Wrong Taxation

The European Union usually talks a lot about technological investment and its commitment to new industries, but much of it is a facade. It penalizes technological investment in a very aggressive way, as well as the value creation and wealth that it entails. European taxation penalizes technological investment from the beginning, not only putting obstacles to companies from the start but, more importantly, with a confiscatory policy on capital investments, stock option schemes and private equity that finance business growth. It is not only monumental errors such as the so-called “Google Tax” and a myopic view of taxation aimed at scraping revenues from anything, but it is also the assault on any capital investment, added value, and profit created from risk-taking by investors who bet on innovation. In Europe, if something is not subsidized, it is considered suspicious.

Everything comes from the huge mistake of a European Union that seems to behave like a combination of a television preacher and the sheriff of Nottingham. One that tells others what they have to do and how to behave while confiscating the last coin of the remaining taxpayer.s The EU is obsessed with supposed tax revenues that only a central planner would invent, and at the same time ignores and hinders the enormous possibilities of employment, wealth and productivity improvement that it could attract.

A Wrong Regulation

The EU subordinates innovation to the bureaucratic whims of officials who insist on keeping things as they were in 1980. The European regulation for technology and innovation is as slow, inefficient and burdensome as it is for the old economy, and it puts obstacles under the excuse of normativism but hides something much worse, the thinly-disguised goal of supporting low productivity sectors by putting barriers to high productivity ones.

When one discusses this problem with regulators, they congratulate themselves because that the approval period of, for example, a Fintech company, is six to nine months. Even worse, anti-business myopia is reflected in a statement from thirty technological entrepreneurs sent to the European Union in which they warn of an “incoherent and punitive” system, “often archaic and highly inefficient” that can cause a “brain drain” of the best and brightest in Europe.”

Subsidizing Low Productivity Sectors to Penalize High Productivity Sectors

A thin veil of regulation and laws disguises protectionism.

There is an obsession of the individual states to shield at any cost the rent-seeking position of their ill-named “national champions”, who have become a kind of disguised Social Securities and are docile companions of political power. The constant subsidization of sectors in the process of obsolescence while penalizing those who could replace and improve the pattern of growth and the business fabric is very evident throughout the EU. By keeping dinosaurs alive, governments prevent the creation of an ecosystem that would make other companies grow, develop and become global leaders. It is not a surprise that, country by country, we see how the European Union that constantly talks about competition is, in reality, trying to put barriers to new leaders so that the rent-seeking sectors keep their privileges of decades ago.

By trying to protect the dinosaurs, the EU countries end up hindering the innovation capacity of their economies and do not allow new giants to thrive.

This is protectionism hidden under the excuse of regulation and taxation, and the worst is that it neither protects national conglomerates, nor encourages them to reinvent themselves, nor does it support the creation of new European leaders.

Of course, there are some positive initiatives, it can not be denied, but the empirical evidence is that those are drowned under a million pages of obsolete European Union rules and taxes that impede it to lead the technological change.

If Europe wants a better future for our children and grandchildren, and our economies to strengthen, it must stop subsidizing what does not work and penalizing what works, stop attacking those who risk and invest in innovation. Because what no European politician is going to achieve is to return to 1980. However, what politicians will achieve is to make Europe the ideal collateral damage of a US-China technological dominance.


About the Author

Daniel Lacalle is a PhD Economist and Fund Manager and is author of Escape from the Central Bank Trap, Life In The Financial Markets and The Energy World Is Flat. He holds the CIIA (Certified International Investment Analyst) and masters in Economic Investigation and IESE.

Postmodern Monetary Theory

Supporters of the Green New Deal and related forms of profligate social spending have almost uniformly adopted a stance of dismissiveness when pressed about the multi-trillion-dollar price tags of their proposals. Unable to offer a convincing answer rooted in the traditional public-finance concerns of tax revenue and budgeting, they have instead embraced a concept known as Modern Monetary Theory (MMT) as a sort of hand-waving exercise to make the price tag go away.

The basic concept of MMT holds that government can advantageously use its position as the sole issuer of legal tender to expand public expenditure far beyond what its revenue stream would support. By essentially exploiting a monopolist position over currency creation, the MMTers hold, government can maintain what my colleague Pete Earle describes as a “closed loop” of credit issuance for government spending. In this way, money can be created by the state to pay for almost anything the MMTers desire because all debts are payable in the same U.S. currency, though they offer the passing caveat that the monetary expansion at the heart of the scheme can be theoretically reabsorbed at a later date through taxation.

The ability to exploit this posited monetary monopoly presumes an idealized political system in which credit issuance and taxation seamlessly operate as mechanical levers under expert guidance, not the political system we actually have, in which the same tools are highly susceptible to intruding interest groups. Even though MMTers have convinced themselves that the tax lever will provide a conceptual safeguard against the drift toward hyperinflation, the practical intrusions of politics would likely render it impotent.

The Strange Marketing of Fringe Economics

A dissection of the conceptual problems of MMT is not however my primary purpose here. At its core, MMT is anything but modern despite what its moniker claims and could be more accurately described as a naïve and simplistic rehashing of superseded doctrines from almost a century ago. Contrary to the insinuations of MMT’s many hashtag proselytizers, economists from across the political spectrum have given serious consideration to the merits of their arguments — and found them wanting.

By every conceivable measure, MMT is an extreme heterodox theory that falls well outside of the mainstream. Its advocates therefore carry the burden of making their case in a clear and accessible form and in suitable venues to a skeptical economics profession.

What one often finds in practice however is the exact opposite. Instead of making their arguments in an accessible manner aimed at converting their skeptics, MMT supporters display an unusual habit of presenting their idea as if it were a matter of settled and obvious economic truth. To them, the unconverted skeptics are the real outsiders, missing an obvious solution to the financial phantoms they believe to be created by adherence to budgetary conservatism.

A recent, widely circulated Twitter thread started by MMT theorist Stephanie Kelton exemplifies the problem. When asked if we can afford the Green New Deal, Kelton replies simply, “Yes. The federal government can afford to buy whatever is for sale in its own currency.” While conceding that “inflation is the limit” to this novel approach, she retreats from specifics beyond simply asserting the theory’s reliance upon the aforementioned use of taxation to reabsorb enough of the monetary expansion used to finance the spending spree before high inflation sets in. Where that inflation occurs and whether the government can even successfully pinpoint it are at best peripheral concerns. The typical MMT advocate thus proceeds by declamation of the theory as they want it to operate rather than by demonstrating its actual viability in practice.

Most efforts to convince skeptics of MMT take on a similar form of declaiming its alleged truths rather than presenting a carefully argued and coherent case for the position, let alone mustering empirical evidence in its favor. To many MMTers, these doubters (which, at the present, include the overwhelming majority of the economics profession) could not possibly have identified a fault in the simplistic or politically untenable propositions of MMT that are visible from the surface. Rather, they simply don’t understand what MMT is really about, or they haven’t taken the time to wade through decades of obscure MMT theorizing as presented by its advocates in low-quality heterodox journals or even self-published internet manifestos. If you do not #LearnMMT and then agree with all it has to offer, the fault is entirely your own.

In the case of the Green New Deal, this strange sense of confidence in MMT has morphed into an almost-comical hubris. Consider how the revised FAQ for this multi-trillion-dollar spending extravaganza addresses the question of its own finance: “As the post-2008 consensus among serious economists and financiers affirms,” we are told, the Green New Deal “does not require ‘new taxes’ unless inflation emerges.”

The referenced “consensus among serious economists,” of course, is a rhetorical appeal to legitimize MMT. It effectively seeks to repurpose the widespread economic belief that dramatic increase in spending without taxation will invite inflationary pressures into an exploitable limit, short of which MMT can be deployed to finance extravagance from the public treasury. This latter twist is neither a consensus position among economists nor a serious solution to the constraints scarcity imposes on public finance.

In a sense, the MMT/Green New Deal alliance is unavoidable. The only world in which the fiscal dimensions of the Green New Deal and its closely associated jobs-guarantee program are even conceivable is also a world that accepts the truth of MMT as a foundational axiom. That truth however is anything but established, and MMT remains an unconventional outside view that invests more effort in finding new adherents for its doctrines than in explaining, defending, and demonstrating their economic validity. The convenient conversion of Alexandria Ocasio-Cortez to MMT as the preferred and only method for advancing her spending agenda has done more to advance its popularity than any argument on merit offered in support of MMT to date.

The MMT Epistocracy

There is nonetheless method to the madness of the strange forms that MMT proselytization employs. The MMTers’ depiction of their theory as both obvious and true chafes with the reality that it has few adherents beyond the fringes of the profession and little in the way of scientific evidence to support its claims.

To reconcile the troubles caused by this epistemic divergence, MMTers therefore turn to a series of rhetorical strategies that are more commonly encountered in the world of postmodernist moral philosophy and particularly its close cousin, critical theory.

These movements, which swept up the academic humanities in the mid-20th century, were largely accompanied by an intellectual turn against evidence-based argumentation and scientific falsifiability as methods of testing ideas in a competitive environment. At the same time, postmodernists (even where they differ greatly in particulars) have a habit of aggressively embracing theories of knowledge that rely upon the mastery of obscure, jargon-cluttered concepts and inwardly referential citation patterns that develop within their own insular clusters of accepted thinkers and the students who trained under those thinkers.

The practical result has been the cultivation of exclusionary echo chambers of thought within entire academic disciplines that now depend upon acroamatic transmission to advance their ideas. That is to say, credibility within postmodernism derives from training under the right school of postmodern literary critics, historians, philosophers, and so forth. The products of this approach vary greatly in quality, but postmodernists’ worst habits have contributed to an intellectual malaise in many of the afflicted disciplines. Poor arguments thrive when impenetrable but vacuous jargon insulate them from scrutiny and the formidable entry barriers of having the right academic genealogy protect them.

Notice many of the same insularities are at play in the way that MMTers interact with the mainstream of the economics profession: refusal to engage scientific arguments from outside the MMT world, deployment of proprietary jargon around MMT, and insistence that a true understanding of MMT requires specialized training from an obscure and insular group of heterodox economists who also advocate MMT aggressively on the political front. In this sense, MMT economics is better understood as an attempt to carve out an obscurantist epistocracy of knowledge over a particular narrow slice of public finance.

The first word, obscurantist, refers to the strategy of epistemic defense employed by the MMTers. Simply put, they tend to adopt a strategy that eschews arguing for the merits of their ideas in a scientific discourse with competing monetary theories. Rather, the immediate impulse of the MMTers is to question the standing of their challengers to even engage in criticism.

As we were recently told following Paul Krugman’s critique of the idea, he is unsuited to challenge MMT because he doesn’t understand what MMT is all about or has confused its historical forebears in early 20th-century chartalism with the alleged improvements from an even more obscure specialist literature known to MMTers themselves. By questioning the standing of their critics to even criticize, absent their own pursuit of training in the deepest nuances of a fringe economic heterodoxy, the MMT obscurantists thereby avoid having to answer any substantive critique of their theory from outside of their own ranks.

The second word, epistocracy, refers to those same ranks of theorists — the tiny group of intensely committed MMT economists who received training at one of a handful of heterodox academic departments that specialize in its cultivation. As specialists in MMT, they take on a role of guardianship of its knowledge, including claimed possession of that knowledge.

The two attributes act in concert to first establish MMT as a proprietary domain of knowledge, and then exclude its challengers from that domain on account of a lack of standing to enter it. On account of its similarity to philosophical movements that employ similar strategies in the humanities and softer social sciences, allow me to suggest that MMT would be more appropriately designated Postmodern Monetary Theory.


About the Author

Phil Magness is a Senior Research Fellow at the American Institute for Economic Research. He is the author of numerous works on economic history, taxation, economic inequality, the history of slavery, and education policy in the United States.

Debunking the Overpopulation Alarmists

Is overpopulation a problem? Are we running out of resources? Where did the concern over population growth and resource depletion come from? How accurate were the past predictions of gloom by people who were concerned about the two issues? Will we manage to combine rising numbers of people and higher standards of living with decent stewardship of the planet in the future?

These are just some of the questions answered in Population Bombed: Exploding the link Between Overpopulation and Climate Change, an extensively researched, well-written and concise new book published by the Global Warming Policy Foundation.

The book comes out exactly 50 years after Paul R. Ehrlich published The Population Bomb, in which the Stanford University biology professor famously claimed that population growth would result in resource depletion and the starvation of hundreds of millions of people. The authors of Population Bombed, Pierre Desrochers, who is an associate professor of geography at the University of Toronto, and Joanna Szurmak, who is a doctoral candidate in the graduate program in Science and Technology Studies at York University, Toronto, take stock of past scholarship on “depletionism” and provide a cheerful rejoinder to the doomsayers.

Desrochers and Szurmak begin by outlining the case for the prosecution. The “pessimists” claim that, on a finite planet, population and consumption cannot continue to expand forever; that, to maintain a high standard of living, the number of people will have to come down; that resource exploration and extraction are subject to the law of diminishing returns and will, therefore, become more expensive over time; that discoveries, inventions and innovations do not obviate the need for more resources; and, finally, that human successes in overcoming resource constraints in the past are not relevant to coping with environmental challenges today.

Conversely, the “optimists” claim that population growth makes humanity richer through division of labour and economies of scale; that human ingenuity enhances efficient modes of production and “delivers increasing returns … [through] progressively less damaging ways of doing things”; that, unlike other animals, humans use trade and innovation to get around resource constraints; and, finally, that there is no reason why our past successes cannot be repeated in the future.

To quote the British historian Thomas Babington Macaulay, “On what principle is it that with nothing but improvement behind us, we are to expect nothing but deterioration before us?”

Depletionism has a long pedigree that goes back to the Atra-Hasis, an 18th-century BC epic in which the Babylonian gods deemed the world too crowded and unleashed a famine to fix the “problem”. Confucius, Plato, Tertullian, Saint Jerome and Giovanni Botero revisited the issue over the succeeding centuries.

The modern concern with overpopulation is usually traced to the British cleric Thomas Malthus who argued that the human population grows exponentially, while food production grows linearly. Thus, population will eventually outgrow the food supply, resulting in mass starvation.

Depletionism reached its apogee in the concluding decades of the 20th century, when Garrett Hardin pointed to the “tragedy of the commons” (i.e., overuse of resources that are not privately-owned), the Club of Rome predicted stratospheric prices of resources and Paul Ehrlich warned of mass starvation. It was Ehrlich who, unwisely, agreed to a wager with Julian Simon from the University of Maryland on the future availability of resources – and lost.

According to the wager, Ehrlich would choose a “basket” of raw materials that he expected would become less abundant in the coming years and choose a time period of more than a year, during which those raw materials would become more expensive. At the end of that period, the inflation-adjusted price of those materials would be calculated. If the “real” price of the basket was higher at the end of the period than at the beginning, that would indicate the materials had become more precious and Ehrlich would win the wager; if the price was lower, Simon would win. The stakes would be the ultimate price difference of the basket at the beginning and end of the time period.

Ehrlich chose copper, chromium, nickel, tin, and tungsten. The bet was agreed to on September 29, 1980, with September 29, 1990, being the payoff date. In spite of a population increase of 873 million over those 10 years, Ehrlich lost the wager. All five commodities that he had selected declined in price by an average of 57.6 percent. Ehrlich mailed Simon a check for $576.07. Today, raw materials, including rare earths, are abundant and the concept of depletionism, as originally understood, has ceased to be the pessimists’ cri de coeur.

Instead, the pessimists have changed their tack (somewhat). Rather than emphasising depletion of raw materials, like Ehrlich used to do, they now warn of human overconsumption and the related loss of biosphere integrity (the destruction of ecosystems and biodiversity), climate change, ocean acidification, land system change (from woodland to cropland), unsustainable freshwater use, perturbation of biogeochemical flows (nitrogen and phosphorus inputs to the biosphere), alteration of atmospheric aerosols (particulate concentration in the atmosphere), and ozone depletion.

Desrochers and Szurmak engage with many of these relatively new concerns by noting, for example, the methodological problems inherent in the overconsumption models, including the “planetary boundaries framework” that I described in the previous paragraph.

Wisely, the authors do not get bogged down in the science of global warming. Full discussion of global warming would, of course, require a book of its own. As it is, Population Bombed is 250 pages long, and includes 900 footnotes and an extensive 33-page bibliography. Instead, they call for honesty. They note that the use of fossil fuels is at the centre of today’s calls for population control and point out that the pessimists are simply taking the benefits of fossil fuel use, including environmental ones, for granted. Desrochers and Szurmak do not dismiss all concerns about CO2 in the atmosphere, but point out that getting rid of fossil fuels under present circumstances would have dire economic, social and environmental consequences – especially for the world’s poor.

To give just a few examples, production would have to become more expensive for businesses, the price of heating and cooling would become more expensive for households, and land, currently occupied by animals, would have to be covered by wind turbines.

That said, keep in mind that our species has addressed many environmental problems before and we will, probably, solve the future ones as well. Desalination, for example, can help with water shortages, while genetically-modified crops could eliminate the need for excessive use of fertiliser and pesticides. These breakthroughs, and the prospect of many more, make Desrochers and Szurmak’s book a reminder of humanity’s “can do” instincts and problem-solving ability.


About the Author

Marian L. Tupy is a senior policy analyst at the Cato Institute and editor of HumanProgress.org

Ending Factory Farming

While there are causes for optimism, factory farming is still on the rise globally, and we have to understand it to eliminate its harms. In this broad-ranging talk from Effective Altruism Global 2018: San Francisco, Lewis Bollard talks about the situations for various sorts of animal, the efforts to help them, and how different strategies may be helpful in different national contexts. A transcript of Lewis's talk is below.

As effective altruists who care about the wellbeing of individuals, it's natural for us to want to end factory farming, which may be the greatest source of suffering on earth. I think it's also natural for us as optimists and people who believe in technology to think that perhaps the end of factory farming is imminent or even inevitable.

You may have seen headlines recently that clean meat is just around the corner. That US meat consumption is falling, and that that the end of meat is nigh in the world. And while there have certainly been a lot of exciting developments recently, these are all headlines from six to seven years ago. The unfortunate reality that we have to confront is that factory farming is not inevitably going to come to an end. The reality is that right now, factory farming is continuing to grow.

There are more farm animals today in factory farms than ever before in history, and it's continuing to grow at the same rate as it has been for the last 20 years. So what can we do about this? Obviously we need to take a number of approaches to this problem, including ones focused on technology, but I want to focus today on three things that I think have been driving the increase in the number of animals in factory farms, and that I think offer particularly important, tractable and neglected approaches to reducing farm animal suffering.

The Plight of Birds

Over the last 50 years, the number of mammals alive on factory farms globally has barely increased, while the number of chickens alive at any point in time has significantly increased, up to a point of 23 billion alive at any point in time. That equates to over 60 billion slaughtered annually, because most of these chickens are broiler chickens who live short lives. And so when we think about what we can do to improve the plight of birds and particularly chickens, it comes down to two types of these birds. The first, you're probably familiar with, is the plight of layer hens.

We know from preference studies that these birds, given a chance to get to a nesting box, will push through a cage door as hard as they will to get to food after 24 hours of deprivation. So the mere fact that they're not getting access to a nesting box here - and we know there are similar desires to get to perches, to get to dust bathing ability - shows you the degree of behavioral deprivation inflicted on these animals, typically for more than a year at a time.

The good news is that there has been progress. The first progress that we've started to see has been over the last four years, initially in the US, going to corporations and securing pledges to get rid of battery cages. Now up to a point, those pledges, if implemented, will benefit about 275 million hens a year. Those campaigns have now gone international, working in Europe, in Latin America, increasingly in Asia, and have reached a point that those international pledges are set to benefit about 130 million hens a year if implemented. But of course that raises the question of if they will be implemented.

Here's the evidence that we have today; these are the latest figures. As of last month, there were 55 million cage free hens in the US. Now that's a significant increase from a few years ago when there were fewer than 20 million cage free hens in the US, but obviously there's still a lot of work to be done, and so one of the priorities for the movement within affecting layer hens is getting the implementation of these pledges that have already been secured.

The other priority is reaching the other group of chickens, the broiler chickens. So as most of you probably know, broiler chickens are a different strain of chicken that are raised separately from laying hens, and are raised for meat. And as you'll see in this photo that I took of a broiler chicken in India, their problem is less that they're in cages - they're normally not in cages - and more the way that they've been bred in the first place, that they have been bred to suffer. There have been studies done on broiler chickens with leg problems, which is a common ailment amongst chickens, in which they've been offered feed laced with pain relief or feed laced without pain relief, and chickens who don't have these leg problems, who don't have these genetics, show no preference between the two. But the chickens who do have these leg problems, the chickens like this one here, that have been bred to grow too large, too fast, choose the pain relief laced feed, suggesting to us that these birds are in chronic pain. And when we're talking about 16 billion alive at any point in time, about 60 billion a year, given the short lifespan, that's a huge amount of potential suffering.

So what can we do to alleviate it? Obviously one thing is to reduce the amount of chicken that people eat. And I'll talk a little bit about some of the efforts in China on that later on. The other thing we can do is to reduce the suffering of each chicken, and so advocates have been working in the US over the last two years to secure five asks of companies.

The first is to change the breed, to move away from these breeds of birds that are in constant pain. The second is to reduce the overcrowding in chicken barns. The third is to improve living conditions, in particular litter, lighting and enrichment. The fourth is to move to a less cruel method of slaughter. And the fifth to ensure the auditing of those pledges. There's already been significant progress to date: Burger King, Subway, major food service companies in the US have committed to these pledges.

And advocates are right now engaged in the toughest fight of all: the fight to get McDonald's to give up this incredibly cruel system of raising chickens. McDonald's accounts for about three to four percent of the chicken purchased in the US every year. So the decisions they make will have a huge impact directly on chickens, about 270 million chickens a year in their supply chain. But they will also have huge knock-on effects, so it's critical that advocates win this campaign to ensure better conditions for chickens in the US, and I think likely, too, in the future around the world.

The Plight of Fish

This brings us to the second issue, the only group of animals, or vertebrate animals, that's larger than chickens on farms. And that's farmed fish. So this graph shows the increase in the number of farmed fish, individual farmed fish, over time globally. The best estimate now is that at any point in time, there's between 75 billion and 140 billion farmed fish, confined in fish farms globally. The estimate is that there may be another 1 to 2 trillion wild caught fish who are slaughtered globally. Most of them are very small fish.

This graph doesn't quite represent that. This graph shows more the trend line. This is in terms of tonnage rather than in terms of individuals because we don't have good individual data for wild caught fish. But what you can see is the trend over time is one in which wild caught fish is not increasing, while farmed fish is increasing rapidly. So something that's appealing about focusing on farmed fish is not just that they're more directly under our control, and that there's a greater lifespan of chronic suffering to affect, but also the fact that this is a trend line hitting in a very bad direction. So I want to tell you just a little bit about visiting a fish farm in India last year. And to me what was surprising about it was that from a distance, a fish farm really didn't look that bad.

So, all the commercial facilities we visited were like this. Huge ponds the size of multiple football fields. You don't obviously see overcrowding, you don't obviously see incredibly dirty water. We know very little about what these fish are experiencing beneath the surface, but you don't immediately see the problems. But I think somewhere where you do immediately see the problems is when you look at the slaughter of these fish.

At a fish farm, the method of killing fish, both farmed fish and wild caught fish globally, is truly barbaric. So these fish were hauled out of the water. Many of them were crushed to death underneath each other. Some of the other ones were live disemboweled, and the ones that weren't suffocated over the course of several hours. So we followed some of these fish to a live market, where they were still alive hours after they had been caught.

And I think the thing which is most striking with this particular welfare issue is how simply it could be solved. So, technology already exists to stun fish. Electrical stunning technology is relatively cheap. Some European companies like Tesco already require this throughout their supply chain and yet we see that over 90 percent of the fish globally are not stunned prior to slaughter. So in addition, of course, to wanting to reduce the number of fish, there are some really simple things that with a bit of pressure, could reduce a huge amount of chronic suffering, over 100 billion farmed fish a year, potentially over a trillion wild caught fish a year, if we could get stunning technology in place.

The other positive trend on fish recently is the attention that the issue has gotten from the media. So just in the last year, we've seen headlines from the Washington Post in terms of looking at the scientific consensus that fish feel pain, from the Smithsonian magazine, again, talking about fish pain, from the New York Times, talking about fish depression and increasing evidence that fish can feel depression just like we can, and just like we know that mammals and likely birds can too. From NPR, talking about the way that wild caught fish are being treated. And finally from USA Today, talking about progress in Switzerland and potential progress in the UK toward banning the boiling alive of lobsters and crabs.

Farm Animals in China

The third major driver of the increase in the number of farm animals globally is China. So as China has gotten richer over the last 20 or 30 years, we've seen a dramatic increase in the number of farmed animals in China.

This graph shows you the portion of the world's farm animals of each variety that are housed in China currently. And what you see is for chickens, it's about a fifth to a quarter. For pigs it's about half the world's farm animals, for farmed fish, it's over half. And this is not a case of China exporting to the world for the most part, though there's a little bit of that. This is primarily for domestic consumption, and so if you care about the plight of animals on farms, you have to care about China and the trajectory of this issue in China. And I think there are a number of hopeful signs on that.

It may be a little hard to read what this says, but this was a survey done at the end of last year, of 2,000 Chinese consumers. They were asked how often they eat each of these groups. So in blue means they eat this group of food every day and red means a few times a week, green once a week, purple less than once a week and the light blue means they never eat this food. And what you see is, despite some of the headlines you may have seen, there's very little vegetarianism or veganism in China. There were very few people, less than one percent, who said that they never ate pork or never ate other animal products. However, what you also see alongside this, is that the majority of Chinese consumers in this survey said that they don't eat meat every day. In fact, not only do they not eat pork, they don't eat chicken or other types of meat every day, and it's far more common to eat it on a weekly basis.

And you also see that Chinese consumers eat plant protein on a daily basis. So things like mock meats, things like legumes, things like nuts often mixed together with meat dishes. So for instance, a tofu and pork dish is regularly part of the diet. And I think this provides a basis to work from that we don't have in the US, because these alternatives are already readily available, and they're already accepted as part of the Chinese diet.

Here's a graph that shows similar data in another format. So what you see here is in green, plant protein, and in red, animal protein. You can see in the US, we're incredibly dependent on animal protein. About two thirds of our daily protein average intake is coming from animal-based protein. When you look at the rest of the world, that's just far less the case. So the average Chinese person and the average Indian is getting more plant-based protein now than the average American. And what you see particularly when you look at somewhere like India, like the rest of Asia and China, is that the animal protein segment is not as big as it's gotten in the US. It seems like there's the potential to shrink that without people going below the level of daily protein required. So although we obviously want to increase the percentage of plant protein, there's also the potential to simply reduce the percent of animal protein.

And here's two more causes for optimism. So what you see on the first side was, again the same survey, reported changes in consumption, so people everywhere always say they're eating more fruits and vegetables and you can take that with a grain of salt. But the thing that I think is interesting here is that poultry and pork consumption are reported to be down. We're actually seeing that showing up in the national statistics. Now at the same time, fish and seafood consumption is up. So it's not clear that this is totally worked out net positive, but I think there's a positive trend there. I think there's also a positive trend in the increase in plant protein consumption, which sort of goes against the narrative that China is moving away from plant protein and toward animal protein. The other thing you see is a receptiveness to clean meat, which seems to be greater than the receptiveness that we've seen to clean meat - meat grown from cells - in the US. And so if you think that that's likely to be in the future, down the line, it suggests China may be a good market for that.

The one other cause for optimism that I want to highlight is the change within the Chinese government. So something you've seen on a number of social issues in China, for instance, on environmentalism, is that the Chinese government was traditionally silent on the matter, but that once Chinese government officials started talking about it, they legitimized the issue and were able to achieve policy changes far faster than we've achieved them in the US. And my hope is that this is the start of a trend like that.

So what we saw last year was what is to my knowledge, the first time Chinese government official has spoken in favor of animal welfare, and indeed the first time that a Chinese government official has called for animal welfare legislation, which China doesn't yet have. And in fact also in the same speech, called for a set of regulations and technical standards. And so my hope is we'll start to see the dividends of that.


About the Author

Effective Altruism is a project of The Centre for Effective Altruism, a registered charity in England and Wales. Effective altruism is changing the way we do good. Effective altruism is about answering one simple question: how can we use our resources to help others the most? Rather than just doing what feels right, we use evidence and careful analysis to find the very best causes to work on. But it's no use answering the question unless you act on it. Effective altruism is about following through. It's about being generous with your time and your money to do the most good you can.

The Jagged Arc of Human Progress

Human progress is dramatic and real. The fundamentals of human wellbeing, including life expectancy, income, nutrition, education and personal safety, have improved dramatically – especially over the last two centuries or so.

The arc of those improvements, however, is jagged, not linear. Occasional backsliding, as the findings of the just-released Human Freedom Index 2018 indicate, is unavoidable.

The Index, which is co-published annually by the Cato Institute, the Fraser Institute, and the Liberales Institut at the Friedrich Naumann Foundation for Freedom, presents the state of human freedom in the world based on a broad measure that encompasses personal, civil, and economic freedom. As its authors, Ian Vásquez and Tanja Porcnik, note, “Human freedom is a social concept that recognises the dignity of individuals and is defined here as negative liberty or the absence of coercive constraint.”

The data in the Index goes back to 2008. This year’s edition contains 2016 data, covering 162 countries. The Index uses 79 distinct indicators of personal, civil and economic freedom in the following areas: rule of law, security and safety, movement, religion, and association, assembly, and civil society; expression and information, identity and relationships, size of government, legal system and property rights, access to sound money, freedom to trade internationally, and regulation of credit, labour, and business.

Indicators of personal and civil freedoms are weighted at 50 percent, and the indicators of economic freedom are also weighted at 50 percent. Individual countries are rated on a scale from 0 to 10, with higher values representing more freedom.

According to the 2018 Index, the average human freedom rating for 162 countries in 2016 was 6.89. That’s 0.01 less than was the case last year. More specifically, 63 countries increased their ratings and 87 decreased their ratings. Since 2008, the level of global freedom has also decreased by 0.06. During the intervening decade, 56 countries improved their scores and 81 countries saw their scores deteriorate.

The top 10 freest jurisdictions included, in descending order, New Zealand, Switzerland, Hong Kong, Australia, Canada, the Netherlands and Denmark (tied in 6th place), Ireland and the United Kingdom (tied in 8th place), and Finland, Norway, and Taiwan (tied in 10th place). The bottom 10 jurisdictions included, in descending order, Iran, Burundi, Algeria, Egypt, Sudan, Libya, Iraq, Yemen, Venezuela and Syria.

The highest levels of freedom were in North America, Western Europe and Oceania. The lowest levels were in the Middle East and North Africa, sub-Saharan Africa and South Asia.

The countries that improved their level of human freedom most from last year were Ukraine (0.44), Iran (0.34), Timor-Leste (0.26), Belize (0.19) and Niger (0.19). The largest deteriorations were in the Seychelles (−0.24), Surinam (−0.23), Turkey (−0.19), Cape Verde (−0.18) and Poland (−0.18).

Since 2008, the countries that have seen the greatest improvement in their human freedom scores include Côte d’Ivoire, Angola, Zimbabwe, Taiwan and Lesotho. The largest deteriorations occurred in Greece, Brazil, Venezuela, Egypt and Syria.

As the authors of the Index note, freedom is good in and of itself. But freedom is also highly correlated with democracy – Hong Kong being the main exception – and with economic wellbeing. In fact, countries in the top quartile (i.e., 25 per cent) of human freedom “enjoy a significantly higher average per capita income ($39,249) than those in other quartiles. The average per capita income in the least-free quartile, for example, is only $12,026.”

The authors of the Index write that “freedom plays an important role in human well-being” and note “the complex ways in which freedom influences, and can be influenced by, political regimes, economic development, and the whole range of indicators of human well-being.” As editor of HumaProgress.org, I can only concur.

The decline in human freedom shows that progress does not take place along all dimensions of human well-being, all of the time. That, as Harvard University psychologist Steven Pinker notes, would not be progress, but a miracle. The findings of the Human Freedom Index 2018 report also remind us that progress is not guaranteed. To live in a better world, all of us have to be on guard and defend the gains that humanity has made.


About the Author

Marian L. Tupy is a senior policy analyst at the Cato Institute and editor of HumanProgress.org

Growth Is the Ultimate Weapon in Ending Child Labor

Child labor was once ubiquitous. Take, for example, ancient Rome. As Mary Beard noted in her 2015 book SPQR: A History of Ancient Rome, “Child labour was the norm. It is not a problem, or even a category, that most Romans would have understood. The invention of ‘childhood’ and the regulation of what work ‘children’ could do only came fifteen hundred years later and is still a peculiarly Western preoccupation.” Today, fewer than 10 percent of children worldwide have to work for a living. By and large, those that do, live in poor countries. Economic growth, which was key to eliminating child labor in the developed world, can achieve the same outcome in the developing one.  

Prior to the mechanization of agriculture, which increased farm productivity, there were no food surpluses to sustain idle hands - including those of children. “The survival of the family demanded that everybody contributed,” writes Johan Norberg in his 2016 book Progress: Ten Reasons to Look Forward to the Future. As such, “it was common for working-class children to start working from seven years of age … In old tapestries and paintings from at least the medieval period, children are portrayed as an integral part of the household economy.… [with many working] hard in small workshops and in home-based industry,” Norberg continues.

As agricultural productivity increased, people no longer had to stay on the farm and grow their own food. They moved to the cities in search of a better life. At first, living conditions were dire, with many children working in mines and factories. By the middle of the 19th century, however, working conditions started to improve. Economic expansion led to increased competition for labor and wages grew. That, in turn, enabled more parents to forego their children’s labor and send them to school instead.

Between 1851 and 1911, for example, the share of British working boys and girls between the ages of 10 and 14 dropped from 37 and 20 percent respectively to 18 and 10 percent respectively. In the United States, the share of working 10 to 13 year olds fell from 12 percent in 1890 to 2.5 percent in 1930.

In his 2018 book Enlightenment Now: The Case for Reason, Science, Humanism, and Progress, Harvard University professor Steven Pinker recounts how technology helped get boys off the farm and into the classroom. He quotes a tractor advertisement from 1921, “By investing in a Case Tractor and Ground Detour Plow and Harrow outfit now, your boy can get his schooling without interruption, and the Spring work will not suffer by his absence. Keep the boy in school—and let a Case Kerosene Tractor take his place in the field. You’ll never regret either investment.”

While legislation eventually enshrined in law what was already happening in practice and banned child labor, it is crucial to remember that it was only after a critical mass of children were pulled out of the labor force by their parents that people realized that life without child labor was possible. Similar processes are taking place in the rest of the world today.

According to the International Labor Organization’s 2017 Global estimates of child labor: results and trends 2012-2016 report, child laborers as a proportion of all children aged 5 to 17 dropped from 16 percent in 2000 to 9.6 percent in 2016. That year, 19.6 percent of children worked in Africa, 2.9 percent in the Arab states, 4.1 percent in Europe and Central Asia, 5.3 percent in the Americas and 7.4 percent in Asia and the Pacific.

The total number of child laborers fell from 246 million in 2000 to 152 million in 2016. That’s a reduction of 38 percent over a relatively short period of 16 years. In 2016, almost half of child laborers lived in Africa (72.1 million), which is the world’s poorest continent. Over 62 million child laborers lived in the populous Asia and the Pacific region. Some 10.7 million lived in North and South America, 1.2 million lived in the Arab States and 5.5 million lived in Europe and Central Asia.

As was the case throughout human history, agriculture continued to dominate child employment, accounting for 71 percent of child laborers. Services employed 17 percent of child laborers and industry 12 percent. In spite of continued population growth, the International Labor Organization expects that the total number of child laborers will continue to decline, falling to between 121 and 88 million in 2025. As such, the importance of economic growth in developing countries cannot be overstated.


About the Author

Marian L. Tupy is a senior policy analyst at the Cato Institute and editor of HumanProgress.org

Animal Advocacy Strategies: Technology versus Social Change

If we want to help farmed animals, there are at least two clear avenues to pursue. One, we can promote technologies to replace farming, like plant-based or clean (cultured) meat. Or two, we can try to change social attitudes towards the moral standing of animals. Does either of this options seem much better than the other? In this talk from EA Global 2018: San Francisco, Kelly Witwicki and Kieran Greig discuss the relevant considerations. A transcript of Kelly and Kieran's talk is below.

Kieran: Before we go into the considerations for and against tech change versus social change, I think we're going to first start off with a number of qualifications in order to narrow down on exactly what we are going to be discussing. The first thing is for technological development, we're just going to be constrained to food tech, so particularly plant-based alternatives and clean meat. I know there're other things we could consider, so things like virtual reality, or we could get a lot more speculative about things like artificial intelligence or potentially gene editing, but we're just really not going to go into those things. So it's just focused on food tech, plant-based foods, and clean meat.

Kelly: And I'm going to be talking about social change/advocacy. I might use those interchangeably. We're talking about the things that the animal advocacy community right now thinks are priorities, so things like strong corporate or legislative reforms, things like personhood initiatives to get basic rights for some species, or for some individuals of non-human species. And possibly also work that affects society's attitudes towards farmed animals, towards animal farming, and towards animal farming alternatives. So there's a lot of range in there. This could include supportive documentaries and non-fiction film and television, but just assume that we're talking about the best things in the clean meat, plant-based food tech space and the best things in the advocacy space. So clean chicken meat to strong reforms or personhood initiatives, not like clean suede and, I don't know, whatever advocacy we think is ineffective.

So just assume we're talking about the top things because some of this, obviously in practice some of these considerations come down to, well this is a bad tech idea and this is a good advocacy idea, so in this talk we're only considering good advocacy and tech ideas. Also, to qualify, these are considerations for how we should divide and prioritize our resources as a movement, and where the marginal value is. So in practice, an individual's comparative advantage might matter a lot. If you have a degree in tissue engineering, you should probably just go work in food tech, but if you're the kind of person who could be a really strong entrepreneur or a really strong advocate, this is more of an open question for you.

These are very highly speculative topics and we're relying on pretty weak evidence in either direction, so really no one should come away from this with a strong opinion of whether in general we should be putting more into tech or more into advocacy, you should really have a weak leaning either way. And last couple of qualifications, that we're not each taking a side, we're going to each talk about some considerations for advocacy and for tech, generally just the ones that we each find strongest on either side. And we're going through some very loaded and complicated considerations so we're so sorry if we don't have time to explain some things.

Kieran: I think another really important thing to acknowledge is that there's obviously really complex and important interactions between the two, so the approaches are complementary. If we do make technological progress, and make social progress easier by changing attitudes, we also increase demand for the technological progress. Definitely that's worth considering and neither of us are saying that it's either/or, obviously it's how much do we want of this versus how much do we want of that. I think the other thing I would say on this is obviously that once people have stopped eating animals, it does seem like it would be easier to change their attitudes towards animals.

And I think the final point I would make here is that historically, there does seem to be a relationship between technological progress and social change. So for instance, and I don't have great sense of this but I've heard cases where the technological change seems to have driven the social change, so for example, with the eradication of the horse and cart by the automobile, with the decimation of whaling by changes in how we source oil. There's also examples around female empowerment through contraception, opposition to the Vietnam war through televised images. Yeah and I think I'll leave it at that for now.

Kelly: And this is one of our first cruxes and disagreements. I think those particular examples, teasing out the causation is very challenging because we do expect there to be a cyclical effect. In the case of animal farming, we have these studies suggesting that if you're thinking about eating animals or if you're eating animals, you think they're less morally valuable than you otherwise would, so we should expect therefore that once people are eating more clean meat, plant-based meat, they will be more receptive to animal friendly attitudes. So that's the kind of effect that can have and then in the opposite direction, we have things like, if people care about the animals more, they're going to want this technology more.

But teasing out the causation historically between tech change and advocacy change, I think is hard. It just seems like maybe the best we can say is like, there is causation in both directions and of course we also have examples where it seems like the tech definitely just followed morality. Like clean energy and electric cars and a lot of technology changes that have to do with the environmentalist movement, seem much more driven by morality and interest in climate change than just pure interest in efficiency. So as I said, don't think of us as taking a side, we'll just clarify what each point is for.

So, here's a point in favor of advocacy. Basically tech doesn't go backwards like social change can. once we've developed a technology, we know how to use it, we can use it, but social change is harder to say that's going to stick around. If we work on technology and bring the tech faster, then what we're doing is adding value between when the tech comes and when it would have come, but our end states are equally good in the long run.

If we instead work on advocacy, that changes the direction of the future, and not just the speed with which it comes, because we expect the technology to eventually come anyway but we don't expect social change to necessarily happen if we don't work on it. Then instead what's happening is at this time, when we start making the clean meat, if we're also doing this advocacy then maybe we can push up the change higher, and then we end up with a higher value long-term world. So that's a big consideration in favor of working on social change instead of tech, and we just think the tech might happen without us anyways.

A counter consideration, however, is that tech itself could be an efficient way to achieve that change because we reduce the dissonance and then maybe that helps us actually get social change.

Kieran: Yeah, sure. So I think that counter consideration is important. So, if we do take into account that the tech change could be the thing that is driving the social change, and that tech unlike social change can't go backwards, I think that the timeline, versus the direction change, to me doesn't seem to clearly point in favor of focusing on social change.

Kelly: Sure, so for one specific example of why this could be the case, let's say we expect value lock in to happen some time soon. For what value lock in means, basically just assume there's some kind of world, maybe like Artificial General Intelligence develops, and just for whatever reason, our values at that time matter a lot, they extend into the future from that point. Then we maybe want to make sure that we speed up value change as fast as possible as much as possible, maybe in exchange for what would otherwise be more robust, stronger, longer-term change.

And of course some tech might offer quicker improvement to that, so maybe aggressively rolling out clean meat chicken nuggets reduces cognitive dissonance more than taking the time to develop whole chickens' bodies with bones and special connective tissue and everything. And maybe that's the 80/20 of the tech that we can do for social change, but of course there may also be other ways to work against speciesist prejudice that have higher near-term returns even if we'd expect them to have lower returns relative to other strategies in the long-term, which could be things like maybe focusing on dramatic changes, like rights of personhood for some animal. Maybe that's just what we would want to do if we thought value lock in was going to come really soon. So we could just make sure we're pushing that speciesist barrier as fast as possible, even if not as long-term effectively as possible were value lock in not to happen.

We're really trying to run through a lot of things here, so excuse us for just going so, so quickly. I missed something just earlier that I want to make a point on. With advocacy, there's a consideration that maybe before our advocacy efforts can even have any promise, we need to get to a point where we have the same products that we're consuming now, and just have a different production process. So that there's no actual trade off for the end user, for the consumer, which might mean that we just want to get the tech to as strong a place as we can right now and then do the advocacy. Then go for the political change once we have the identical products, just with a different production process.

Kieran: Yeah, so just to jump back to the value lock in consideration. So I think one thing that affects my view here is that it seems like a low probability scenario, but potentially a really high value scenario. I think the other thing which I would be wary of there is potentially if we are trying to advance social change really quickly and perhaps using more aggressive tactics, whatever that would be, you are attempting to achieve personhood for certain nonhuman animals. I think there's some potential for there to be short term negative effects of that, and I think I'd just be aware of that when we are making that decision. And I think the other thing that I would say on this is just that, again, if we do suspect that there is going to be this value lock in scenario in the somewhat near future, that the tech lever might still be the best lever to pull on in order to achieve the social change, and it's not necessarily that the social change lever would be the best to pull on.

Kelly: Yeah, yeah so we want to make those chicken nuggets and reduce that dissonance or something like that.

Kieran: Yeah. Another consideration which informs my opinion on this, would be that in general, I think that the comparative advantage of advocates is going to be doing advocacy, which requires care and empathy for animals. For tech change, I think we're generally just going to be more replaceable. We'd be able to have scientists or other people who don't necessarily care about animals but they are motivated by profits and that sort of thing, they could potentially work on those things whereas for us if we do care about animals, our comparative advantage seems to an area which would require that care.

Kelly: And of course, that could also mean that we would see very high returns by starting tech projects, because maybe we're the most motivated in starting them but then investors and consumers can go take it from us once we've started it. This same consideration is also a general argument for the relative tractability of tech development so maybe we're more replaceable, but maybe it's also more tractable. You can see why we think you should only really lean weakly one way or the other, because these are all quite speculative considerations that just lean one way or the other a little bit. Nothing is very strong here, nothing is "Okay well this is obvious, we should be over here."

Something I've been thinking a bit about lately is that it's possible that humanity's moral circle mostly includes humans, most of us more or less, and then it kind of goes gray out into like, okay we care quite a bit about dogs and cats in the US, we care a little bit about pigs and chickens right now. At least we don't like factory farming. We don't really care about insects, we don't really care about digital minds yet, so they're further away from the moral circle.

And one consideration for working on tech instead of advocacy is that it's possible that the moral circle just has a set point, and it's just going to trend towards some particular point, it's not going to be able to expand forever. If there is a set point, it's probably focused around powerful beings and it's probably, if there is such a set point, it's likely to be a place where those who are included are those who you can get a lot out of, and those who are excluded are the ones who are a burden to take care for, who don't really give you anything in return. You just have to care for, like, children who are just always going to be children, aren't going to end up being productive to your society and the things that you want out of your life.

And that will probably mean that maybe our moral circle stops at humans, or it's just a lot harder to get past humans because humans of different ethnicities, having reduced racism means lower conflict and that's great for us. But maybe just including chickens is not necessarily great for us, it's only great for the chickens. So that would be then a reason just for thinking that the advocacy is less tractable and therefore we want to work more on the tech.

Kieran: Yeah so that's a really interesting point on this potential set point to a moral circle expansion. I think that for me, there seems to be just a large amount of uncertainty and speculation involved in whether there is a set point, and if there is a set point, where that set point is. So I find that for me, that is not one of the considerations which is most informing my opinion here. Obviously, it is definitely a consideration and we should definitely take that into account, but I think that something that I find more informative is that for clean meat, I think there are significant questions around whether we can achieve cost competitiveness with farmed animal products.

So there's been one report from the Open Philanthropy Project, there's also been a paper published on this by Van der Weele and Tramper in 2014, and the basic thesis here is that, with clean meat, you need a growth medium for the cells to proliferate, and the minimum costs of the growth medium currently are such that clean meat just can't become cost competitive. So I think at the minimum costs we're looking at something like $8 per kilogram and factory farmed animal products are just… they're literally a fraction of that right now. But on the other hand, there are proponents, companies working in this area. So for example, Hampton Creek reported that they would have clean meat in restaurants by 2018. Another group recently reported that by the end of 2018, the prices would be at $8 per kilogram. And yeah, I think I'll go with that.

Kelly: So this going to get at, I think, a major crux on some of these considerations, but basically clean meat should necessarily become cheaper than animal meat in the long term because it necessarily involves less energy in terms of the physical constraints of the universe. If you're growing an entire individual, you have to develop their brain and their immune system, I mean they might need some kind of immune system for clean meat, but we don't need to create a sentient intelligent brain. It feels like we can skip that part, we can skip the skeleton, so that's a lot of processes that just don't need to be part of the clean meat process. So theoretically, given enough technological advancement, the physical constraints of the universe suggest that this is what should happen eventually, maybe that's in 100 years, maybe it's 1,000 years. But it should happen eventually, which gets us to the crux here.

If you discount your uncertain impacts a lot, however far away they are, if they're farther into the future, if they're further away in space, if you think your uncertain impacts are things you should just discount basically down to zero or somewhere close to that, then you may be more interested in the next few decades. Because of that, you… well, that can go different ways on some of these considerations. But for this particular consideration, it might mean that you want to work on the advocacy and not the tech, because you don't think the tech is going to come in the next few decades. But if you are more interested in the very long term, and you don't discount that uncertainty, the uncertainty of 1,000 years from now, of the impacts that you can make 1,000 years from now, then you may be more interested in pursuing the technology because you think it's going to happen at least sometime before then.

And that goes for a few of the other considerations here, so log that if that's something that you… if you regularly either go towards the near-term stuff or the far-term stuff, that could make the decision much more clear for you, which way it should go, one or the other. We have a couple other considerations, we may not have time for questions but let's try to get through this quickly so we can do one or two.

One of the considerations for advocacy is that many existing animal product replacements are very high quality, and yet only a small part of the population is vegan, and our animal product consumption continues to rise. So that suggests that just making the technology good enough isn't enough, we need advocacy around it. We need to make people excited about it in order to get it adopted because just having the technology isn't enough.

Kieran: I'm not sure if they are high quality. So I have talked to people who feel like they kind of clearly don't taste like meat, or this is clearly different from the taste of milk. I think the other thing is that the ones which do seem to be high quality do tend to be more expensive, and this is just… this basic economics is one of the factors which determine what people buy, if the alternatives are more expensive, then people are going to buy them less. So we can drive the costs down by further technological development, then yeah, this could potentially make progress a lot easier.

So I think the final consideration for me is that there are axes other than tech versus social change which I find are informing my opinion here. So when I'm thinking about possible donation targets on the social change side versus the technological development side, it feels like there are other just very relevant differences between them, so the track record of certain organizations seems to be stronger on the advocacy side. I can look at something like THL which has been around for a number of years and I can feel more confident in them. When I look at the technological development side, these are just new startups, they have a very limited track record.

Kieran: Similarly, I feel more confident on the advocacy side in terms of how advocates have responded to signs of success and failure, and being able to update their approach in light of those things. I feel less confident that the tech side of things is going to be able to do that. Yeah, so I find that there's just these other relevant dimensions than the tech versus social change dichotomy, which is also informing my opinion here. And they do seem to be importantly different between the two options and I thought I would highlight that.

Kelly: Well there you go, sorry we don't have any answers for you and left you just more confused.


About the Author

Effective Altruism is a project of The Centre for Effective Altruism, a registered charity in England and Wales. Effective altruism is changing the way we do good. Effective altruism is about answering one simple question: how can we use our resources to help others the most? Rather than just doing what feels right, we use evidence and careful analysis to find the very best causes to work on. But it's no use answering the question unless you act on it. Effective altruism is about following through. It's about being generous with your time and your money to do the most good you can.

How Markets Empower Women: Part 2

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Labor Market Participation

As with innovations, labor market participation has also had a positive effect on women’s material well-being and social equality. Despite its poor reputation, factory work has proven particularly important for women’s labor force integration both historically and today in developing countries.

Consider the historical effects of factory work on women in the United States in the 19th century, as well as the effects of factory work on women today in developing countries such as China and Bangladesh.

19th Century Factories in the United States

Women’s economic involvement in the United States increased steadily from the American Revolution through the 19th century. “Women … experienced increasing … autonomy in the sense of freedom from utter dependence on particular men” over this time period as more and more women took on paid work and married women gained the legal right to separate estates, according to one study of a Southern factory city.63 However, it was the greater industrialization of the North that heralded the first entry en masse of women into the labor force.

Even the wealthy United States had “sweatshops” once. During the Industrial Revolution, young women fled the impoverished countryside to work at factories in cities where they could earn and spend their own money. Most ceased work after marriage, but for a time they enjoyed a level of independence that disturbed Victorian sensibilities.

Many complained that factory conditions were too dangerous for women. Others feared living apart from the protection of a father or husband would ruin women’s reputations, because even if they did not actually transgress the mores of the day, they still risked the appearance of impropriety. In 1840, the Boston Quarterly Review’s editor remarked, “ ‘She has worked in a factory,’ is sufficient to damn to infamy the most worthy and virtuous girl.”64

Female factory workers did not all consider themselves victims of “capitalist exploitation” and insufficient male protection. Such remarks about infamy and mistreatment prompted this response from a textile mill operative named Harriet Farley in Lowell, Massachusetts:

We are under restraints, but they are voluntarily assumed; and we are at liberty to withdraw from them, whenever they become galling or irksome… . [W]e are [here] to get money, as much of it and as fast as we can… . It is these wages which, in spite of toil, restraint, discomfort, and prejudice, have drawn so many … girls to … factories… . [O]ne of the most lucrative female employments should [not] be rejected because it is toilsome, or because some people are prejudiced against it. Yankee girls have too much independence for that.65

Farley was far from alone in her sentiments. The “joy of relative independence” was a recurrent theme in millworkers’ accounts, according to historian Alice Kessler-Harris of Columbia University.66 “As important as the feeling of having cash in one’s pocket was the sense of choice that many women experienced for the first time,” she notes.67

Diverse Motives and Achievements. Those who imagine Industrial Revolution factory work in the United States as a dark chapter in history might benefit from reading the words of those who lived through it. Farm to Factory: Women’s Letters, 1830-1860, provides a collection of first-hand accounts revealing a more nuanced reality.

The letters do indeed reveal abject misery, but that misery comes from 19th-century farm life. To many women, factory work was an escape from backbreaking agricultural labor. Consider this excerpt from a letter a young woman on a New Hampshire farm wrote to her urban factory-worker sister in 1845 (the spelling and punctuation are modernized for readability):

Between my housework and dairying, spinning, weaving and raking hay I find but little time to write… . This morning I fainted away and had to lie on the shed floor fifteen or twenty minutes for any comfort before I could get to bed. And to pay for it tomorrow I have got to wash [the laundry], churn [butter], bake [bread] and make a cheese and go … blackberrying [blackberry-picking].68

Compared to the unceasing labor of the farm, even harsh factory conditions can represent a positive change. By contrast, urban living often offered somewhat better living conditions. Far more women sought factory work than there were factory jobs available.

A closer look at the letters in the book reveals the incredibly varied lives of the “factory girls.” For example, with a substantial inheritance, Delia Page was never in need of money. But at age 18, Delia decided to take up work in a factory in New Hampshire despite the risks — a mill in nearby Massachusetts had collapsed in a fire that killed 88 people and seriously injured more than a hundred others.69 Delia’s foster family wrote to her about the tragedy and their fears for her well-being.70 But she defiantly continued factory work for several years.

What led well-to-do Delia to seek out factory work in spite of the danger and long hours? The answer is social independence.71 In their letters, her foster family repeatedly urged her to break off what they considered a scandalous affair, implored her to attend church, and subtly suggested she come home.72 But by working in a factory, Delia was free to live on her own terms — to her, that was worth it.

The unique story of Emeline Larcom also emerges from the letters. Emeline’s background differed greatly from Delia’s. Her father died at sea and her mother, widowed with 12 children, struggled to support the family.73 Emeline and three of her sisters found gainful employment at a factory and sent money home to support their mother and other siblings.74 Emeline, the oldest of the four Larcom factory girls, essentially raised the other three. One of them, Lucy, went on to become a noted poet, professor, and abolitionist. Her own memoirs cast mill work in a positive light.75

Of the diverse personalities captured in the letters, only one openly despises her work in the mill.76 Mary Paul was a restless spirit. She moved from town to town, sometimes working in factories, sometimes trying her hand at other forms of employment such as tailoring, but she never stayed anywhere for long.77 She loathed factory work, but it enabled her to save up enough money to pursue her dream: buying entry into a Utopian agricultural community that operated on protosocialist principles.78

She enjoyed living at the “North American Phalanx” and working only two to six hours a day while it lasted.79 But as is common with such communities, it ran into money problems, exacerbated by a barn fire, and she was forced to leave.80 She eventually settled down, married a shopkeeper, and — her letters seem to hint — became involved in the early temperance movement to ban alcohol, another ultimately ill-fated venture.81

Delia, Emeline, and Mary provide a glimpse of the different ways that factory work affected women during the Industrial Revolution. Wealthy Delia gained the social independence she sought, and Emeline was able to support her family. Even Mary, who detested factories, was ultimately only able to chase her ill-advised dream through factory work.

Increased Earning and Bargaining Power. In addition to helping women achieve their personal goals, factory work also gave women the economic power to lobby for broader social changes.

By midcentury, women in the industrialized North began to mobilize for women’s reform, including equal property rights and custody of children, according to historian Robert Dinkin of California State University at Fresno.82 This prompted one male commentator to grouse in 1852 that “our women Americans” should be “angels, not agitators.”83 Some key reforms, such as the wave of laws granting married women more equal property rights, were not a direct result of women’s agitation. “Positive change in the status of women can occur when no organized feminism is present,” as Rutgers University historian Suzanne Lebsock put it.84 However, in the United States and Britain, working-class women played a key role in the suffrage movement.

By contrast, the women leaders of the anti-reform countermovement were generally housewives.85 Many of them felt threatened by the newfound purchasing power of factory workers. Sarah Hale, editor of Godey’s Lady’s Book, the most influential mainstream women’s magazine of the day, insisted women should shun activism and bewailed the fact that factory women could afford the same clothes as the upper-class — even gold watches — thus creating a “problem of distinguishing the lady from the factory worker by dress alone.”86 Her panic over blurring social classes exemplifies how industrialization created widespread material prosperity for the first time.

In the primarily agricultural economy of the South, women were less active in paid labor than their northern counterparts. Free women were not typically involved in the business aspect of plantations, with notable exceptions such as late 18th century indigo mogul Eliza Pinckney.87 As for enslaved women, the ability of slaves to earn money and buy personal property was mostly limited to urban areas. In 1860, about 6 percent of rural and 31 percent of urban slaves were “hired out,” often receiving a share of the wages earned.88 However, their property rights were profoundly restricted. The abolition of slavery in 1865 enabled many of the roughly 13 percent of U.S. women who had been slaves to engage in paid labor for the first time.89

Factories Helped Change Attitudes on Female Labor Force Participation. Before the rise of the modern regulatory state, there typically were no written laws barring free women from entering occupations. However, sexist customary prohibitions were strong. Cultural attitudes thus served to limit women’s ability to pursue various professions.

Aided by the increased visibility of women mill workers, those attitudes later underwent a transformation. By the mid-19th century, even Southern newspapers openly advocated economic freedom for (white) women: “Now, what every woman, no less than every man, should have to depend upon, is an ability, after some fashion or other, to turn labor into money. She may not … exercise it, but everyone ought to possess it.”90 Editorials made explicit calls to widen the range of occupations open to female workers, ranging from postmasters to artists.

In 1840, one source alleged that only seven industries were widely available to women: teaching, running an inn or boardinghouse, typesetting, bookbinding, needlework, domestic service, and mill work. By 1883, around 300 occupations were open to women, ranging from “lady government officials” to beekeepers and wood engravers.91 There were about 30 practicing women lawyers, and even female physicians in the United States. Despite facing prejudice for their race as well as their gender, the first black female physician, Rebecca Lee Crumpler, earned her medical degree from New England Female Medical College in 1864, and the first black female lawyer, Charlotte E. Ray, graduated from Howard University School of Law in 1872.92

New fields continued to open to women throughout the 20th century.93 Women’s labor force participation rose in part thanks to expanded opportunities. “Another factor was the greater acceptance of married women in the labor force,” claims Harvard University economist Claudia Goldin.94 But it was improvements in household production technology in the mid-20th century that allowed many more married women to enter the workforce instead of tending the home as a full-time job (see Figure 8). As shown in Figure 9, women’s home production time fell more sharply after 1966, as those technologies became more widely available, boosting labor market participation further. While not the only causes, the technological and medical gains freeing women’s time from home production and allowing for smaller family sizes played an outsized role in bringing women’s labor force participation in the United States up to its current level.

Figure 8: Labor force participation rates in the United States by sex and marital status, 1890-2016    Source:  Claudia Goldin, “The Quiet Revolution that Transformed Women’s Employment, Education and Family,” Harvard University Richard T. Ely Lecture, Figure 1,  https://scholar.harvard.edu/files/goldin/files/the_quiet_revolution_that_transformed_womens_employment_education_and_family.pdf ; “Employment Status of the Civilian Noninstitutional Population by Age, Sex, and Race,” U.S. Bureau of Labor Statistics; “(Unadj) Civilian Labor Force Level — Married 35-44 yrs., White Women,” U.S. Bureau of Labor Statistics; “Current Population Survey,” U.S. Census Bureau; and “Labor Force (Series D 1-682),” Historical Statistics, U.S. Census Bureau.

Figure 8: Labor force participation rates in the United States by sex and marital status, 1890-2016

Source: Claudia Goldin, “The Quiet Revolution that Transformed Women’s Employment, Education and Family,” Harvard University Richard T. Ely Lecture, Figure 1, https://scholar.harvard.edu/files/goldin/files/the_quiet_revolution_that_transformed_womens_employment_education_and_family.pdf; “Employment Status of the Civilian Noninstitutional Population by Age, Sex, and Race,” U.S. Bureau of Labor Statistics; “(Unadj) Civilian Labor Force Level — Married 35-44 yrs., White Women,” U.S. Bureau of Labor Statistics; “Current Population Survey,” U.S. Census Bureau; and “Labor Force (Series D 1-682),” Historical Statistics, U.S. Census Bureau.

Figure 9: Average weekly hours spent in home production and market work among female prime-age workers, 1900-2012    Source:  Valerie Ramey, “Time Spent in Home Production in the 20th Century United States,”  Journal of Economic History  (March 2009): 33; updates through 2012 are from Ramey’s website, “Valerie A. Ramey,” Department of Economics, University of California, San Diego,  http://econweb.ucsd.edu/~vramey/research.html .

Figure 9: Average weekly hours spent in home production and market work among female prime-age workers, 1900-2012

Source: Valerie Ramey, “Time Spent in Home Production in the 20th Century United States,” Journal of Economic History (March 2009): 33; updates through 2012 are from Ramey’s website, “Valerie A. Ramey,” Department of Economics, University of California, San Diego, http://econweb.ucsd.edu/~vramey/research.html.

Though the Industrial Revolution is often vilified, it empowered many women to both achieve their personal goals and to effect social change, and it was an important first step toward increasing women’s socioeconomic mobility. The option of labor force participation empowers women by offering them the chance to earn money and attain economic independence.95 The potential earning power then translates into increased intrahousehold and societal bargaining power, lending more weight to women’s voices. The option of entering the labor force also strengthens the fallback position of women who choose not to engage in paid labor.

Industrialization transformed not only women’s lives, but society, and ultimately brought about widely shared prosperity unimaginable in the preindustrial world. The pace of industrial economic development has even been speeding up.96 In South Korea, Taiwan, Hong Kong, and Singapore, the process of moving from sweatshops to First World living standards took less than two generations, as opposed to a century in the United States. Such “sweatshop” factories are often primarily staffed by women.

Harriet Farley’s arguments still apply today. As long as work is “voluntarily assumed” and laborers maintain the “liberty to withdraw” from it, we should not reject a potential force for women’s empowerment in developing countries in an attempt to protect them.

“[A]sk the woman,” economic historian Deirdre McCloskey suggests, “if she would rather that the shoe company not make her the offer… . Look at the length of queue that forms when Nike opens a new plant in Indonesia. And ask her if she’d rather not have any market opportunities at all, and be left home instead entirely to her father or husband.”97

Factories in Developing Countries Today

Today, throughout the developing world, factory work continues to serve as a path out of poverty and an escape from agricultural drudgery, with particular benefits for women seeking economic independence. There remain places “where sweatshops are a dream,” offering life-transforming wages.98

Experts across the ideological spectrum agree that factories are a proven path to development.99 “The overwhelming mainstream view among economists is that the growth of this kind of employment is tremendous good news for the world’s poor,” as economist Paul Krugman put it.100

Industrialization helps women in particular: consider China and Bangladesh.

Factories Today in China. China experienced the most remarkable advancement out of poverty of all time, partly thanks to a manufacturing boom following economic liberalization in the late 1970s and 1980s. Some fear this has led to widespread exploitation and sweatshop conditions.

“This simple narrative equating Western demand and Chinese suffering is appealing,” according to writer Leslie T. Chang. “But it’s also inaccurate and disrespectful.”101 “Chinese workers are not forced into factories because of our insatiable desire for iPods,” Chang explains.102 “They choose to leave their homes [in rural China] in order to earn money, to learn new skills and to see the world.”

She spent two years in China getting to know factory workers in order to make their stories known.103 “In the ongoing debate about globalization, what’s been missing is the voice of the workers themselves,” she says. “Certainly the factory conditions are really tough, and it’s nothing you or I would want to do, but from their perspective, where they’re coming from is much worse… . I just wanted to give that context of what’s going on in their minds, not what necessarily is going on in yours.”104

The book Chang published as a result of her research, Factory Girls: From Village to City in a Changing China, presents an intimate picture of how globalization changed the lives of women in her ancestral country.105 The portraits that emerge of independent, ambitious young women contrast sharply with the widespread narrative of victimhood.

Women accounted for 70 percent of rural transplants to the factory city that Chang visited. They travel farther from home and stay longer in urban areas than their male counterparts. Women “are more likely to value migration for its life-changing possibilities” than men, because gender roles are less restrictive in cities than in the traditional countryside.106 Unlike in most countries, in China women have a higher suicide rate than men, and in rural areas they are two to five times more likely to kill themselves than in cities.107 Yet China’s suicide rate has declined more rapidly than any other country’s in recent years, falling from among the world’s highest rates in the 1990s, driven by sky-high rates among young rural women, to among the world’s lowest rates (see Figure 10).108 The World Health Organization attributes this progress partly to women gaining the option to leave the countryside to work in factory cities, and so improving their social and economic conditions.109 The Telegraph’s Yuan Ren ascribes the high rural suicide rate to harsh gender roles: “Even today, many rural women are treated like second class citizens by their own family, subordinate to their fathers, brothers and — once married — their husband and mother-in-law.”110 A 2010 study found that, whereas marriage has a protective effect against suicide in many countries, marriage triples suicide risk among young rural Chinese women.111 The author notes that “being married in rural Chinese culture usually … further limits [a woman’s] freedom” as a possible explanation for this.112

Figure 10: Urbanization and decreasing suicide in China, 1992-2011    Source:  “Back from the Edge,”  The Economist , June 24, 2014; Jie Zhang and Long Sun, “The Change in Suicide Rates between 2002 and 2011 in China,”  Suicide and Life-Threatening Behavior  44, no. 5 (April 2014): 4.

Figure 10: Urbanization and decreasing suicide in China, 1992-2011

Source: “Back from the Edge,” The Economist, June 24, 2014; Jie Zhang and Long Sun, “The Change in Suicide Rates between 2002 and 2011 in China,” Suicide and Life-Threatening Behavior 44, no. 5 (April 2014): 4.

Escape from such gender roles helps explain why many women choose to migrate. Initially, Chinese society viewed factory work as dangerous and shameful to a woman’s reputation, echoing Victorian concerns for the Industrial Revolution’s factory girls.113 But over time, migration became a rite of passage for rural Chinese. Today, urban life affords factory workers — particularly women — freedom from rural areas’ more traditional, restrictive social norms. As The Economist put it, “Moving to the cities to work … has been the salvation of many rural young women, liberating them.”114

In the city, Chang was surprised to find that social mobility was strong, with many assembly line women moving into administrative roles or other fields.115 Factory turnover was high, as women frequently switched jobs in search of better prospects. Compared to their Industrial Revolution predecessors, China’s factory girls enjoy more opportunities for economic mobility and long-term labor force participation. Chang observed that evening classes in business etiquette, English, or computer skills could catapult an ambitious woman into white-collar work. In fact, as China’s human capital and wages have soared, more workers have moved into the services sector, and many factories have relocated southward to poorer countries such as Bangladesh.

Urbanization not only offers escape from poverty, but also has the knock-on effect of improving migrants’ home villages. It demolishes the idea that being poor in the city is just as bad, if not worse, than being poor in the countryside. When Min, a handbag factory employee accustomed to modern city life, visited her family home in the countryside, she found herself faced with this scene:

Electricity was used sparingly to save money, and most dinners were eaten in near-darkness. There was no plumbing and no heating. In the wet chill of the Hubei winter, the whole family wore their coats and gloves indoors, and the cement walls and floors soaked up the cold like a sponge. If you sat too long, your toes went numb, and your fingers too.116

Min made it her mission to modernize the farm home where she grew up. “Min walked through the house pointing out improvements she wanted: a hot-water dispenser, a washing machine, a walk of poured concrete across the muddy yard.”117 She told Chang she planned on eventually paying for the construction of an indoor bathroom and an electric hot-water heater so that her family might bathe in the winter without being cold.

Migrants like Min act as the chief source of village income by sending earnings home. Min and her older sister Guimin sent home more than double the amount of money the small family farm brought in through the sale of pigs and cotton. The money also gave the sisters a voice in family affairs, letting them insist that their younger sisters attend school longer than was usual for girls.

As Chang notes, most migrants never return permanently to the countryside. “The ones who do well will likely buy apartments and settle in their adopted cities; the others may eventually move to towns and cities near their home villages and set up stores, restaurants, and small businesses like hairdressing salons or tailoring shops.”118 Very few go back to farming.119 The majority of China’s swelling new middle class are former economic migrants who did well in the cities and stayed.120

But urban life does more than simply raise a woman’s expectations regarding social status and influence. According to Chang, migration makes rural women more likely to seek equality in marriage.121 This is one way, in the factory towns of the south, young women “came to believe that they mattered, despite their humble origins.”122

As economic opportunity has swept across China, it has brought a sense of self-worth. Chang notes the older and more rural Chinese she interviewed did not believe their stories were worth telling, but the young women in the city deemed themselves worthy subjects. Chang noted that “individualism was taking root.”123

Thanks to economic liberalization, for the first time “there was an opportunity to leave your village and change your fate, to imagine a different life and make it real… . [Factory women] were concerned with their own destinies, and they made their own decisions.”124 Globalization didn’t imprison them in sweatshops; it expanded their options.

Factories Today in Bangladesh. The word “sweatshop” still conjures images of the tragic 2013 Rana Plaza garment factory building collapse in Bangladesh that resulted in more than a thousand deaths. In the wake of such disasters, many people in rich countries assume the compassionate response is to impose trade restrictions. But such a response would harm Bangladeshi garment workers, most of whom are women, by forcing them into far worse situations than factory work.

Social economist Naila Kabeer explored the “transformatory potential” of factories in her 2000 book, The Power to Choose.125 She interviewed 60 women in her native Bangladesh. The country is home to 18.4 million of the world’s poorest people and has strict gender norms.126

“In my mother’s time,” one woman told Kabeer, “women had to tolerate more suffering because they did not have the means to become independent. [T]hey are better off now… . [T]hey can work and stand on their own feet. They have more freedom.”127

For many years, government and nongovernmental organizations tried unsuccessfully to promote female participation in Bangladesh’s labor force. “In the end, however, it took market forces, and the advent of an export-oriented garment industry, to achieve what a decade of government and non-government efforts had failed to do: to create a female labor force,” notes Kabeer.128

The country industrialized rapidly, growing its number of export-oriented factories from a handful in the mid-1970s to around 700 by 1985.129 Today, approximately 80 percent of garment workers are female, according to the World Bank.130

In 1985, Britain, France, and the United States all imposed quota limitations on clothing imports from Bangladesh in response to anti-sweatshop campaigns financed by labor unions in the rich countries.131 Within three months, two-thirds of Bangladeshi factories shuttered their gates and more than 100,000 women were thrown out of work.132

The Bangladeshi General Secretary of National Garment Workers had this to say to the anti-sweatshop activists:

[N]ot buying Bangladeshi shirts isn’t going to help us, it will just take away people’s jobs. The shock tactics — such as the pictures I have seen from America of Bangladeshi shirts dripping with blood — should stop… . As workers, we give an emphatic “yes” to the campaign against quotas.133

Britain and France removed their quotas in 1986, and Bangladesh’s garment industry has since expanded to thousands of factories employing millions. (The United States finally ended its apparel quota regime, which included Bangladeshi imports, in 2005, but still maintains import tariffs on many kinds of apparel).134 Growing protectionist sentiment in rich countries, aided by sensationalized accounts of working conditions in poor countries, could restrict Bangladesh’s growth.

Despite its poor reputation, Bangladeshi factory work has slashed extreme poverty and increased women’s educational attainment while lowering rates of child marriage.135 The share of Bangladeshi women married by age 18 has fallen from more than 73 percent in 1994 to 59 percent in 2014, and the average age of Bangladeshi brides at first marriage has risen from 16 in 1975 to 19 in 2013.136 As in China, in Bangladesh women commit suicide at higher rates than men, and the rural suicide rate is 17-fold higher than the urban suicide rate.137 An overview of the literature concluded that the unusually high suicide rate among young women reflected forced marriages, lower social status of women, poverty, and high rates of violence against women.138 As with China, Bangladesh’s suicide rate has declined as urbanization has increased.139 As women have left the countryside for factory work in cities, it has not only improved their personal situations, but also sparked broader cultural change toward more freedom for women.

“Now I feel I have rights,” explained a factory woman whose earnings allowed her to escape her physically abusive spouse. “I can earn and survive.”140

The country’s women-dominated garment industry transformed the norm of purdah or seclusion (literally, “veil”) that traditionally prevented women from working beyond the home, walking outside unaccompanied by a male guardian, or even speaking in the presence of unrelated men. Many Bangladeshi women now interpret purdah to simply mean modesty instead of social and economic segregation. In Kabeer’s words, factory work let women “renegotiate the boundaries of permissible behavior.”141 Today, in Dhaka and other industrial cities, women walk outside and interact with unrelated men.

Kabeer found “the decision to take up factory work was largely initiated by the women themselves, often in the face of considerable resistance from other family members.”142 Some men beat their wives for seeking factory work. Dismayingly, a 2011 survey showed 65 percent of Bangladeshi wives have experienced domestic violence.143

Several men Kabeer interviewed feared factory work gave women too much freedom. As one man put it:

Women … are becoming a little too free. When I marry, I will not let my wife work. Then she will have to obey my wishes because she will be dependent on me.144

Not all Bangladeshi men think that way. In fact, the earning power of women is eroding the custom of bridal dowries. It has also brought about greater responsiveness by the court system toward women. Since women have started working, the “law is on their side,” one woman explained.145

Attitudes toward women are changing, and Kabeer found that earning increased the weight a woman’s priorities carried within the household. “When she brings [in] money, I have to buy her whatever she wants,” explained one factory woman’s husband. He continued, “She may want a new sari or she may say that [our] daughter needs a book …”146

“Because women can work and earn money, they are being given some recognition. Now all the men think that they are worth something,” claimed one woman.147

Tragedies like the Rana Plaza building collapse are horrifying and understandably garner a lot of press. But they should not overshadow the garment industry’s wider-reaching effects on the material well-being and social equality of women in Bangladesh. As one factory worker put it: “The garments have saved so many lives.”148

Conclusion

Market-led innovation has improved the lives of women even more so than for men. Women have reaped greater benefits from health advances financed by the prosperity created by free enterprise: female life expectancy has risen faster than men’s and today women outlive men almost everywhere. Women are also less likely to die in childbirth, and falling infant mortality rates have enabled smaller family sizes, giving women more time. Laborsaving household devices have also freed women from the burden of housework. This freeing of women’s time is ongoing as appliances spread throughout the world, and as women spend less time on household production, more of them choose to engage in paid labor.

Labor market participation offers women economic independence and heightened societal bargaining power. Factory work, despite its poor reputation, empowered women in the 19th-century United States by helping them achieve economic independence and social change. Today, the story of the factory girls is repeating itself in new settings across the world, as young women gain economic independence through risk and toil. In China, factory work gave rural women a chance to change their fates and the conditions in their home villages. In Bangladesh it let women renegotiate restrictive cultural norms.

Innovation and market participation enable women to achieve greater material prosperity and promote positive cultural change away from sexism. Progress is still in its earlier stages in many countries, but with the right policies, women everywhere can one day enjoy the same degree of material prosperity and cultural gender equality present in the United States today.


About the Author

Chelsea Follett is a research associate at the Cato Institute and managing editor of HumanProgress.org

Are We Really Poorer Than Our Parents?

In recent years, many US politicians and journalists have warned that the millennials are at the risk of ending up “poorer than their parents.” The evidence certainly suggests that the Great Recession has led to wage stagnation and high unemployment among young Americans, who have soured on the idea of achieving the American Dream.

The just-released Victims of Communism Memorial Foundation’s Annual Report on Generational Attitudes toward Socialism in America, for example, has found that 52 per cent of millennials would prefer to live in a socialist (46 per cent) or a communist (6 per cent) country. Conversely, only 40 per cent want to live in a capitalist one. Mercifully, Americans tend to associate socialism with the high-tax and high-redistribution welfare states of Scandinavia rather than the Marxist dictatorships of the days of yore.

Before they reject American-style capitalism, however, millennials should consider how prosperous ordinary Americans really are.

Economic prosperity is often measured in terms of personal income or wealth. Neither of those two measures, however, provides a full picture of people’s material wellbeing, for standards of living can increase due to either income growth or falling prices. People with stagnating incomes, for example, can experience material improvements if prices decline. Even people with falling incomes can be better off – as long as the cost of living decreases at a faster pace than incomes shrink.

As Ball State University economist Steven Horwitz wrote in his 2015 article Inequality, Mobility and Being Poor in America, “If the reason we care about incomes and wealth is because of what they enable people to consume, and thereby acquire goods that add to some broad notion of well-being, then it might also be worthwhile to look at some of the data on consumption to see what it suggests about … the real condition of the poor.”

Consider the cost and adoption of home appliances. As late as 1971, only 43.3 per cent of all US households had a colour TV. By 2005, 97.4 per cent of poor American households owned one. Similar stories can be told of washing machines, dishwashers, clothes dryers, refrigerators, freezers, stoves and vacuum cleaners.

As Horwitz noted, “Poor US households are more likely to have basic appliances than the average household of the 1970s, and those appliances are of much higher quality.” Not only do more people across the income spectrum enjoy access to previously unaffordable goods, but the speed of adoption of new products is increasing.

As W Michael Cox and Richard Alm from the Southern Methodist University showed in their 2015 paper Onward and Upward: Bet on Capitalism—It Works, it took about 50 years between the time that the telephone was invented and the time that 50 per cent of US households owned one. In contrast, it took just 12 years from the emerge of the smartphone for 50 per cent of individual Americans to own one.

Note that all this material progress took place even though the hourly wages of many American workers stagnated. Between January 1968 and January 2018, the inflation-adjusted average hourly wage in the manufacturing sector rose from $20.43 to $21.27. Manufacturing accounts for 19 percent of all US employment and wage stagnation among factory workers may be seen as analogous to the flat-lining incomes among millennials.

Source: W Michael Cox and Richard Alm, Onward and Upward: Bet on Capitalism—It Works

Source: W Michael Cox and Richard Alm, Onward and Upward: Bet on Capitalism—It Works

Bearing the above wage numbers in mind, how come most Americans can now enjoy goods that were previously owned only by the rich? 

First, it is important to note that hourly wages do not reflect the massive expansion in non-wage benefits, which rose from 19 per cent of wages in 1951 to 44 per cent in 2015. Today non-wage benefits include relocation assistance, medical and prescription coverage, vision and dental coverage, health and dependent care, flexible spending accounts, retirement benefit plans, group-term life and long-term care insurance plans, legal and adoption assistance plans, child care and transportation benefits, vacation and sick paid time-off, and employee discount programs from a variety of vendors, etc.

Also, many commonly owned goods have declined in price. In 1968, for example, a 23” Admiral colour TV cost $2,544 or 125 hours of labour in the manufacturing sector. In 2018, a 24” Sceptre HD LED TV cost $99.99 or 4.7 hours of labour in the same sector (all prices are in 2018 US dollars). That’s a reduction of 96 per cent in terms of human effort.

The upshot is that growth in nominal wages, or lack thereof, does not reflect the real changes in the standard of living experienced by vast majority of Americans. That’s something to keep in mind when young Americans contemplate the choice between capitalism and socialism.


About the Author

Marian L. Tupy is a senior policy analyst at the Cato Institute and editor of HumanProgress.org

How Markets Empower Women: Part 1

Innovation and Market Participation Transform Women’s Lives for the Better

Over the last 200 years, economic progress has helped to bring about both dramatically better standards of living and the extension of individual dignity to women in the developed world. Today the same story of market-driven empowerment is repeating itself in developing countries.

Competitive markets empower women in at least two interrelated ways. First, market-driven technological and scientific innovations disproportionately benefit women. Timesaving household devices, for example, help women in particular because they typically perform the majority of housework. Healthcare advances reduce maternal and infant mortality rates, allowing for smaller family sizes and expansion of women’s life options. Second, labor market participation offers women economic independence and increased bargaining power in society. Factory work, despite its poor reputation, has proven particularly important in that regard.

In these ways, markets heighten women’s material standard of living and foster cultural change. Markets promote individual empowerment, reducing sexism and other forms of collective prejudice.

Women’s empowerment in many developing countries is in its early phases, but the right policies can set women everywhere on a path toward the same prosperity and freedom enjoyed by women in today’s advanced countries.

Introduction

Women’s empowerment and gender equality have become mainstream aspects of international development discourse.1 Markets help achieve those goals. Markets played a vital role in empowering the women of the West historically and continue to empower increasing numbers of women around the world today.

A review of the development literature suggests that “gender inequality declines as poverty declines, so the condition of women improves more than that of men with development.”2 In other words, women stand to gain more from prosperity than men.

Markets empower women in at least two interrelated ways. First, markets have produced timesaving and health-related innovations that have disproportionately benefited women. Second, labor market participation offers women economic independence and heightened bargaining power. These modes of empowerment reinforce each other.

Laborsaving innovations shifted the traditionally female burden of housework onto machines, freeing women’s time. Medical advances provided by free enterprise have lengthened women’s lives and increased their children’s likelihood of survival, allowing for smaller family sizes. As a result, women have more time to pursue their ambitions: more life years, and more years for activities other than childrearing. They also have more time for leisure, making their lives more pleasant.

Labor market participation, in which firms compete for women’s labor, allows women to accumulate money and increase their bargaining power both in society and in their households. Such participation also speeds economic growth and innovation in a virtuous cycle by creating a larger labor force.3 Traditionally, the coercive power of the state, being primarily an expression of male preferences, often obstructed women’s labor market participation, limiting their activities to prescribed roles. Today, a growing number of women are free to make their own choices regarding family and career.

Innovation

Market-driven innovations have had a positive effect on women’s lives. Medical innovations, and health improvements financed by the unprecedented prosperity generated by free enterprise and industrialization, have improved women’s overall health, including life expectancy, and impacted their fertility. Laborsaving technology has lessened women’s time spent doing household chores, such as cooking and laundry. Positive change is not limited to the past but is ongoing in developing countries today.

Market-Driven Health Improvements

Living conditions remained remarkably constant throughout most of history: poverty was ubiquitous. Then, around 200 years ago, economic growth started to accelerate, first in Great Britain and the Netherlands, then the rest of Western Europe and North America, and finally the rest of the world. Markets globalized in the 19th century, and the Industrial Revolution took productivity to new heights, causing the acceleration in economic growth and ultimately leading to widespread prosperity.

Similarly, human life expectancy — arguably the best overall measure of health — remained relatively flat throughout history until the late 1800s, when it began to rise.4 This “health transition” started in Europe and North America in the 1870s, and then spread to the rest of the world.

These striking improvements in income and health are related. Ample literature shows that, on average, people in wealthier countries outlive those in poorer countries, a relationship known as the Preston curve.5 While the strong correlation does not necessarily prove that higher income causes better health, it does show that “income must be important in some ways and at some times” to the improvement of health, according to Nobel Prize-winning economist Angus Deaton.6

As income grows, it pays for improved diets, housing, sanitation, and medicine, all of which affect health. Deaton attributes the rise in life expectancy primarily to innovations in urban sanitation and the discovery of the germ theory of disease, noting that the unprecedented wealth generated by the Industrial Revolution funded the construction of safe water supplies and sewage systems at a scale never before achieved.7 That decreased the rate of infant deaths in particular. As important as scientific advances were, it was rising market-driven prosperity that financed the public-health projects inspired by newfound scientific knowledge. “Turning the germ theory into safe water and sanitation … requires … money,” Deaton notes.8

It is true that the rapid urbanization during the Industrial Revolution initially raised the mortality rate because disease spreads more easily in concentrated populations without proper sanitation. However, since the 1870s the urban mortality rate has declined faster than the rural rate in the United States.9 City dwellers typically have higher incomes than their rural counterparts and better access to modern medicine. During the Industrial Revolution, some factories even offered their workers free vaccinations.10

Importantly, “all of the health transitions in all countries have been achieved since capitalism began,” and specific health-improving innovations such as vaccines “must at least in part be due to the conditions created by capitalism,” argues philosopher Ann E. Cudd of Boston University.11 Major improvements in longevity first occurred in rich countries only after the Industrial Revolution and advent of global trade accelerated economic growth. Even more rapid progress can be observed in developing countries today, as poor countries can adopt institutions and technologies from rich countries to hasten their progress in both economic development and health.

Women’s Health and Fertility in Historical Perspective. Health advances that the market helped enable have benefited women even more than men. Consider the history of women’s health.

The average hunter-gatherer woman probably had about four children, with typical intervals of four years between each child.12 That represents low fertility by the standards of the poorest countries today; prehistoric women’s high levels of physical exertion likely decreased the probability of conception.13 Paleopathologists estimate about 20 percent of children died before their first birthday.14 “Life expectancy at birth among hunter-gatherers was 20-30 years depending on local conditions,” according to Deaton.15

After agriculture’s invention, many people stopped living nomadically and built permanent settlements. Quality of life may have deteriorated for women, who went through more childbirths (which were dangerous) and saw more of their children die than their ancestors did because permanent settlements without proper waste disposal are a breeding ground for disease.16

By the year 1800, the typical U.S. woman bore seven children.17 On average, only four would survive to see their fifth birthday. The other three typically died from ailments that are easily preventable or curable today.

Yet by the 20th century women outlived men.18 As Figure 1 shows, the average number of a woman’s children that she had to bury fell from three in 1800 to two in 1850 and one in 1900.

Figure 1: Survival of children per woman in the United States, 1800-2015    Source:  Max Roser, “Children that Died before 5 Years of Age per Woman (based on Gapminder), Children that Survived Past Their 5th Birthday per Woman,” Our World in Data,  https://ourworldindata.org/child-mortality/#how-many-children-did-a-woman-give-birth-to-that-died-before-their-5th-birthday .

Figure 1: Survival of children per woman in the United States, 1800-2015

Source: Max Roser, “Children that Died before 5 Years of Age per Woman (based on Gapminder), Children that Survived Past Their 5th Birthday per Woman,” Our World in Data, https://ourworldindata.org/child-mortality/#how-many-children-did-a-woman-give-birth-to-that-died-before-their-5th-birthday.

The average U.S. woman today has two children and sees both survive to adulthood. Most families today have fewer children in part because they are confident that every child they bring into the world will live.

Not only do women have fewer and healthier children, but childbirth has become safer for mothers. Data for Sweden and Finland dating back to 1751 paint a grim picture: around 1,000 maternal deaths for every 100,000 births (see Figure 2). If a woman gave birth seven times, that entailed a 7 percent chance of her death in childbirth. At the time, the British colonies that would become the United States were poorer than Sweden and Finland and probably had an even higher maternal mortality rate.

Figure 2: Maternal mortality rate in selected countries, deaths per 100,000 births, 1751-2008    Source:  Hans Rosling, “Maternal Mortality Ratio,” Gapminder,  http://www.gapminder.org/data/documentation/gd010/ .

Figure 2: Maternal mortality rate in selected countries, deaths per 100,000 births, 1751-2008

Source: Hans Rosling, “Maternal Mortality Ratio,” Gapminder, http://www.gapminder.org/data/documentation/gd010/.

In 1900, the U.S. rate of maternal death in childbirth was more than 800 per 100,000 births. Steven Pinker of Harvard University has noted, “for an American woman, being pregnant a century ago was almost as dangerous as having breast cancer today.”19 After a brief spike in 1918 during the practice of questionable medical techniques, the rate plummeted.20 “[T]he reduction in maternal mortality in twentieth century America is one reason why women’s life expectancy has risen faster than men’s,” according to Deaton.21 Today, U.S. women rarely die in the delivery room.

As Figure 3 shows, a typical 20-year-old woman in the United States today can expect to live for more than 60 additional years. That is about 18 more years of life than a 20-year-old U.S. woman could expect two centuries ago.

Figure 3: A 20-year-old U.S. woman’s average years of remaining life, 1795-2013    Source:  Michael R. Haines and Richard H. Steckel, eds.,  A Population History of North America  (Cambridge: Cambridge University Press, 2000); E. Arias, M. Heron, and J. Xu, “United States Life Tables, 2013,” National vital statistics reports from the Centers for Disease Control and Prevention, National Center for Health Statistics,  National Vital Statistics System  66.3 (2017): 1; Clayne L. Pope “Adult Mortality in America before 1900: A View from Family Histories” in  Strategic Factors in Nineteenth Century American Economic History: A Volume to Honor Robert W. Fogel  (Chicago: University of Chicago Press, 2008); and Kent Kunze, “The Effects of Age Composition and Changes in Vital Rates on Nineteenth Century Population Estimates from New Data,” (PhD diss., Department of Economics, University of Utah, 1979).

Figure 3: A 20-year-old U.S. woman’s average years of remaining life, 1795-2013

Source: Michael R. Haines and Richard H. Steckel, eds., A Population History of North America (Cambridge: Cambridge University Press, 2000); E. Arias, M. Heron, and J. Xu, “United States Life Tables, 2013,” National vital statistics reports from the Centers for Disease Control and Prevention, National Center for Health Statistics, National Vital Statistics System 66.3 (2017): 1; Clayne L. Pope “Adult Mortality in America before 1900: A View from Family Histories” in Strategic Factors in Nineteenth Century American Economic History: A Volume to Honor Robert W. Fogel (Chicago: University of Chicago Press, 2008); and Kent Kunze, “The Effects of Age Composition and Changes in Vital Rates on Nineteenth Century Population Estimates from New Data,” (PhD diss., Department of Economics, University of Utah, 1979).

The same progress is now unfolding in developing countries.

Women’s Health and Fertility in Developing Countries. Practically everywhere, women outlive men and the number of children per woman has decreased. As people escape poverty throughout the world, their children are more likely to survive, allowing for smaller families — a phenomenon called the fertility transition.

It is almost unheard of for a country to maintain a high fertility rate after it passes about $5,000 in per person annual income.22 “The average Bangladeshi woman can now expect to have about the same number of children as the average Frenchwoman,” observed The Economist in 2016, and even in Africa, the poorest continent, fertility rates are falling.23 In the very poorest countries, women often have more children than they say they want, but having more children than desired may be a strategy adopted in reaction to higher rates of child mortality: if a woman wants two children but has reason to believe that half of her children will die in infancy, she may plan to have four children rather than two. For example, the average Nigerian still expects to have about three more children than she ultimately desires.24 As children’s odds of survival improve, such an insurance strategy becomes unnecessary.

Smaller family sizes have freed women’s time, enabling mothers to devote more attention to each individual child, further decreasing an infant’s chance of death, while allowing women to take on pursuits such as paid employment. In developing countries today, women’s rising educational attainment and earning power boost their children’s probability of survival still further.25

Death in childbirth has become rarer practically everywhere on Earth, even in developing countries. As can be seen in Figure 2, in a few decades Malaysia made the same progress against death in childbirth that the currently rich countries took multiple centuries to achieve. Malaysia’s case is not unusual.

“That India today has higher life expectancy than Scotland in 1945 — in spite of per capita income that Britain had achieved as early as 1860 — is a testament to the power of knowledge to short-circuit history,” argues Deaton.26 Today, progress is ongoing, as piped water, improved sanitation facilities, vaccinations, and other health innovations spread throughout developing countries.

In sum, the unprecedented rise in prosperity, medical understanding, and innovation over the last two centuries has bettered women’s health dramatically and continues to do so in poor countries today. Innovations created in rich countries are being adopted by poor countries, enabling them to achieve better health outcomes more quickly.

Cooking: Full-Time Job to Hobby

As with medical advancements, technological innovations have further advanced opportunities for today’s women. Cooking has traditionally fallen to women, and so timesaving and laborsaving kitchen devices primarily benefit women. Over time, markets have brought about and lowered the cost of such innovations as microwaves, convection ovens, ranges, grills, toasters, blenders, food processors, slow cookers, and other laborsaving kitchen devices.27 Markets have also given more women more access to ready-made foodstuffs, so each dish does not have to be prepared entirely from scratch. Thanks to such advancements, cooking has changed from a necessary, labor-intensive task to an optional and recreational activity in rich countries, and that transition is ongoing in the developing countries.

Women’s Escape from the Kitchen in the United States. “In 1900 a typical American household of the middle class would spend 44 hours [a week] in food preparation,” according to economist Stanley Lebergott of Wesleyan University.28 Most of that work fell to women. In other words, back in the days of churning one’s own butter and baking one’s own bread, food preparation consumed as much time as a full-time job. In addition to cooking, women were also often responsible for cleaning the home, washing laundry and hanging it out to dry, sewing and mending clothes, and tending to children.

In 1910, Lebergott estimates that U.S. households spent approximately six hours daily cooking meals, including cleanup. By the mid-1960s, that had fallen to 1.5 hours.29

By 2008, the average low-income American spent just over an hour on food preparation each day and the average high-income American spent slightly less than an hour daily.30 Disaggregating the data by gender reveals even more progress for women. In the United States, from the mid-1960s to 2008, women more than halved the amount of time they spent on food preparation, whereas men nearly doubled time spent on that activity, as household labor distributions became more equitable between genders.

Mass production of everyday foodstuffs assisted this transformation of women’s time. In 1890, 90 percent of American women baked their own bread.31 Missouri’s Chillicothe Baking Company started offering the luxury of factory-baked, presliced bread in 1928, and other companies soon offered competing products. By 1965, 78 out of every 100 pounds of flour a U.S. woman brought into her kitchen came in the form of baked bread or some other ready-prepared good.32 Today, baking one’s own bread in the United States is a hobby, rather than a necessary routine.

Markets have even produced grocery delivery services that bring food to one’s door with the tap of a smartphone application. Market processes also lowered the cost of dining out, and today Americans spend more money dining out than eating in.33

Ongoing Escape from the Kitchen in Developing Countries. The liberation of women from hours upon hours in the kitchen is ongoing, as technological devices and mass-produced goods spread to new parts of the globe. Worldwide, as many as 55 percent of households still cook entirely from raw ingredients at least once a week. In China, that number is as high as 71 percent.34

A 2015 survey found that average hours spent cooking are as high as 13.2 hours per week in India, and 8.3 hours in Indonesia, compared to 5.9 hours in the United States.35 That is only among those who regularly cook. If a higher percentage of Indians than Americans engage in that activity, it is likely that the actual disparity between the two countries’ average hours devoted to food preparation is larger.

While a gap in time spent on food preparation remains between rich and poor countries, today even in India — the poorest country surveyed, and the one with the highest reported average food preparation hours — women devote almost 31 fewer hours to food preparation per week than U.S. women did in 1900. Even allowing for compatibility problems in comparing those figures (the estimate for 1900 included cleanup time, whereas the Indian women surveyed in 2015 were not asked to include cleanup time and so may have excluded time spent on cleanup in their answers), the sheer size of this difference suggests some degree of improvement. A separate survey of Chinese households found that average time spent on food preparation by women declined from more than 5 hours per day in 1989 to 1.2 hours in 2011 (see Figure 4).

Figure 4: Time spent on food preparation by Chinese women, hours per day, 1989-2011    Source:  “China Health and Nutrition Survey,” University of North Carolina Population Center,  http://www.cpc.unc.edu/projects/china .

Figure 4: Time spent on food preparation by Chinese women, hours per day, 1989-2011

Source: “China Health and Nutrition Survey,” University of North Carolina Population Center, http://www.cpc.unc.edu/projects/china.

Much room for improvement remains. In 2017, only 0.5 percent of Chinese households and 1.8 percent of Indian households had a dishwasher, compared to 71 percent of U.S. households.36 In 2017, 42 percent of Chinese households and just 17 percent of Indian households had a microwave, compared to 96 percent of U.S. households. Euromonitor’s Passport Global Market Information Database holds that only 32 percent of Indian households had a refrigerator in 2017.37

As prosperity spreads and poverty declines, kitchen gadgets and ready-made goods will free up more hours of women’s food preparation time around the world. Other innovations will similarly free women from other time-consuming tasks, such as laundry.

Washing: a Full Day to an Hour a Week

Economist Ha-Joon Chang at the University of Cambridge has argued that “the laundry machine has changed the world more than the internet has,” and for women, that may be true.38 Market innovations ranging from the invention of detergent to ever-more-helpful laundry and drying machines transformed the chore of laundry from a dreadful undertaking to a minor inconvenience in the rich countries. Today, that story is ongoing throughout the developing world.

Liberation from Laundry in Historical Perspective. The effect of the washing machine’s arrival in the rich countries as an “engine of liberation” for women, the traditional doers of housework, has been well-documented.39 Writer Bill Bryson described the dismal task of laundry in 19th-century England in his book At Home: A Short History of Private Life:

Because there were no detergents before the 1850s, most laundry loads had to be soaked in soapy water or lye for hours, then pounded and scrubbed with vigor, boiled for an hour or more, rinsed repeatedly, wrung out by hand or (after about 1850) fed through a roller, and carried outside to be [hung to dry] … Linen was often steeped in stale urine, or a dilute solution of poultry dung, as this had a bleaching effect, but the resulting smell required additional vigorous rinsing, usually in some kind of herbal extract. Starching was such a big job that it was often left to the following day. Ironing was another massive and dauntingly separate task.40

Bryson also notes that each different color of fabric had to be washed separately with distinct chemical compounds; that on laundry day someone had to get up as early as 3 a.m. to get the hot water going; and that in households with servants, laundrymaids were the lowest-ranked, with laundering sometimes doled out as a punishment to other servants.41

The situation in the United States was similarly grim. According to Liberty Fund senior fellow Sarah Skwire, U.S. housewives still spent 11.5 hours per week on laundry in the 1920s.42 As the market allowed more households access to washing machines or laundry services, average time on laundry fell to just under seven hours by 1965.

Laundry machines also became more widespread in many of the countries of Europe around that time. Hans Rosling of the Karolinska Institute described his grandmother’s excitement when his family first bought a washing machine in the early 1950s in Sweden:

Throughout her life she had been heating water with firewood, and she had hand-washed laundry for seven children. And now she was going to watch electricity do that work… . Grandma pushed the button, and she said, “Oh, fantastic! I want to see this! Give me a chair! Give me a chair! I want to see it,” and she sat down in front of the machine, and she watched the entire washing program. She was mesmerized. To my grandmother, the washing machine was a miracle.43

That miracle quickly became commonplace in rich countries such as Sweden and the United States. Where markets were unable to operate, there were no incentives to provide women with laundry machines and other timesaving devices, and so progress was slower. Journalist Slavenka Drakulić noted that an American visiting the Communist Bloc in the 1980s would be aghast to find most women still doing laundry the way they had in the United States 50 years prior, without washing machines.44 Throughout the Communist Bloc countries, women often soaked clothes in metal tubs, scrubbed them bent over the tubs’ rims using washboards, then boiled them on stovetops, stirring the clothes with long spoons. The elaborate ritual took up a full day each week and left their hands swollen, cracked, and covered in sores.45 The male economic planners did not even sell rubber gloves that would have protected the women’s skin. Shortages of laundry detergent were also endemic throughout the communist countries. When there is no market incentive to fulfill human needs, it is often women’s needs that are forgotten first.

Today, Americans spend less than two hours a week on the chore, and a greater share of poor U.S. households own laundry machines than did the average of all U.S. households in the 1970s.46 While laundry machines are far from the only reason women’s options have multiplied in the West, they helped. “Without the washing machine,” claims Chang, “the scale of change in the role of women in society and in family dynamics would not have been nearly as dramatic.”47

Ongoing Liberation from Laundry in Developing Countries. Thanks to economic growth and rapidly declining global poverty, more women enjoy ownership of, or access to, laundry machines. One 2013 study estimated 46.9 percent of households worldwide owned a laundry machine in 2010, while a 2016 survey estimated global laundry machine use at 69 percent, and the market for laundry machines is projected to continue growing.48

Consider China, home to the greatest escape from poverty of all time, when economic liberalization freed hundreds of millions of Chinese from penury.49 China’s economy (measured in 2014 U.S. dollars and adjusted for differences in purchasing power) grew more than 30-fold between 1978, when the country abandoned communist economic policies, and 2016.50

In 1981, less than 10 percent of urban Chinese households had a washing machine. By 2011, 97.05 percent did.51 In 1985, less than 5 percent of rural Chinese households had a washing machine. By 2011, 62.57 percent did. This progress is captured in Figure 5. Not only has China seen tremendous progress, but the gap between rural and urban areas has narrowed. In 2016, 89.4 percent of all Chinese households had a washing machine, up from 60.4 percent in 2002.52

Figure 5: Average ownership of washing machines in Chinese households, 1981-2011    Source:  Laili Wang, Xuemei Ding, Rui Huang, and Xiongying Wu, “Choices and Using of Washing Machines in Chinese Households,”  International Journal of Consumer Studies  38, no. 1 (January 2014): 104-9.

Figure 5: Average ownership of washing machines in Chinese households, 1981-2011

Source: Laili Wang, Xuemei Ding, Rui Huang, and Xiongying Wu, “Choices and Using of Washing Machines in Chinese Households,” International Journal of Consumer Studies 38, no. 1 (January 2014): 104-9.

Let us turn to India, where liberalizing economic reforms began in 1992.53 From 1992 to 2016, India’s economy grew four-fold.54 In 2016, 11 percent of Indian households owned a washing machine.55 Urban households are better off, with ownership now topping 20 percent in the most populous cities. As India’s economy continues to grow and poverty further declines, more women will be able to hand over the chore of laundry to machines.

Market competition and the profit motive incentivized the washing machine’s invention and its ongoing marketing to new customers in developing countries. Bendix Home Appliances patented the first automatic washing machine for domestic use in 1937.56 As a Bendix ad put it in 1950, “washday slavery became obsolete in just 13 years” for American women. In 2007, Panasonic launched laundry machines with a sterilization mechanism using silver ions designed specifically to address Chinese consumers’ concerns about undergarment bacteria and successfully increased its market share in the country.57

Washing machine ownership is rising in many developing countries, from Brazil to Vietnam (see Figure 6). Unfortunately, Africa remains the continent with the worst record on economic freedom, as well as the poorest continent with the least access to timesaving technologies. Even in Africa, however, markets are now slowly helping to alleviate poverty.58 Laundry machine market penetration remains low (less than half of households, according to one 2016 survey), so considerable room for progress remains.59

Figure 6: Washing machine ownership, 1977-2017    Source:  “Household Possession Rate of Washing Machines,” Global Market Information Database, Euromonitor,  http://www.euromonitor.com/home-laundry-appliances .

Figure 6: Washing machine ownership, 1977-2017

Source: “Household Possession Rate of Washing Machines,” Global Market Information Database, Euromonitor, http://www.euromonitor.com/home-laundry-appliances.

Today, laundry machines are doing for women throughout the developing world what they did for women in the West half a century ago: freeing their time and labor from a grueling and relentless chore. It is up to women how they spend the time freed up by innovation.

By Freeing Women’s Time, Innovation Has Expanded Their Options

Women do not invariably choose to devote the “freed” time discussed above to leisure or pursuits outside the household. They may spend the time in home production as before, but thanks to efficiency-enhancing innovations, achieve higher household living standards as a result.

Calculations by economist Valerie Ramey of the University of California at San Diego suggest that from 1900 to the mid-1960s, women’s total time devoted to housework fell by only 6 hours per week rather than by 42 as Lebergott claims. Still, Ramey acknowledges the positive trend and concedes that for similar housework hours, women were able to achieve a higher standard of living.60 In the preindustrial and early industrial eras, having well-prepared meals, “clean clothes, clean dishes, a clean house, and well-cared for children was just another luxury the poor could not afford,” because women without servants lacked the time and physical capacity to perform all the necessary work, claims Ramey.61

In other words, as historian Ruth Cowan of the University of Pennsylvania notes, “modern technology enabled the American housewife of 1950 to produce singlehandedly what her counterpart of 1850 needed a staff of three to four to produce: a middle-class standard of health and cleanliness for herself, her spouse, and her children.”62

Importantly, by liberating women’s time through medical and technological innovations, markets expanded women’s options. Whether women choose to spend the resulting freed time in home production (to better effect), leisure, paid work, or other pursuits, markets have made them better off than before.

The change in gendered division of labor also merits mention. As shown in Figure 7, men’s total housework hours in the United States have risen steadily since 1900, as women’s housework hours have declined. While the primary mechanism by which markets have freed women’s time is through innovation, markets may also have aided cultural change, thus leading to more equitable divisions of household labor. One driving force behind this shift may be women’s greater bargaining power within households as a result of the option of labor market participation.

Figure 7: Average weekly hours in home production, United States, 1900-2011    Source:  Valerie A. Ramey, “Time Spent in Home Production in the 20th Century: New Estimates from Old Data,” NBER Working Paper no. 13985, May 2008.

Figure 7: Average weekly hours in home production, United States, 1900-2011

Source: Valerie A. Ramey, “Time Spent in Home Production in the 20th Century: New Estimates from Old Data,” NBER Working Paper no. 13985, May 2008.

By freeing up women’s time, a limited and valuable resource, market-driven innovations enabled women to participate in the labor force. And in developing countries where laborsaving devices are not yet widespread, an incredible amount of latent human potential still remains, waiting to be unleashed.


About the Author

Chelsea Follett is a research associate at the Cato Institute and managing editor of HumanProgress.org

Efficient Charity — Do Unto Others

Imagine you are setting out on a dangerous expedition through the Arctic on a limited budget. The grizzled old prospector at the general store shakes his head sadly: you can't afford everything you need; you'll just have to purchase the bare essentials and hope you get lucky. But what is essential? Should you buy the warmest parka, if it means you can't afford a sleeping bag? Should you bring an extra week's food, just in case, even if it means going without a rifle? Or can you buy the rifle, leave the food, and hunt for your dinner?

And how about the field guide to Arctic flowers? You like flowers, and you'd hate to feel like you're failing to appreciate the harsh yet delicate environment around you. And a digital camera, of course - if you make it back alive, you'll have to put the Arctic expedition pics up on Facebook. And a hand-crafted scarf with authentic Inuit tribal patterns woven from organic fibres! Wicked!

…but of course buying any of those items would be insane. The problem is what economists call opportunity costs: buying one thing costs money that could be used to buy others. A hand-crafted designer scarf might have some value in the Arctic, but it would cost so much it would prevent you from buying much more important things. And when your life is on the line, things like impressing your friends and buying organic pale in comparison. You have one goal - staying alive - and your only problem is how to distribute your resources to keep your chances as high as possible. These sorts of economics concepts are natural enough when faced with a journey through the freezing tundra.

But they are decidedly not natural when facing a decision about charitable giving. Most donors say they want to "help people". If that's true, they should try to distribute their resources to help people as much as possible. Most people don't. In the "Buy A Brushstroke" campaign, eleven thousand British donors gave a total of 550,000 pounds to keep the famous painting "Blue Rigi" in a UK museum. If they had given that 550,000 pounds to buy better sanitation systems in African villages instead, the latest statistics suggest it would have saved the lives of about one thousand two hundred people from disease. Each individual $50 donation could have given a year of normal life back to a Third Worlder afflicted with a disabling condition like blindness or limb deformity.

Most of those 11,000 donors genuinely wanted to help people by preserving access to the original canvas of a beautiful painting. And most of those 11,000 donors, if you asked, would say that a thousand people's lives are more important than a beautiful painting, original or no. But these people didn't have the proper mental habits to realize that was the choice before them, and so a beautiful painting remains in a British museum and somewhere in the Third World a thousand people are dead.

If you are to "love your neighbor as yourself", then you should be as careful in maximizing the benefit to others when donating to charity as you would be in maximizing the benefit to yourself when choosing purchases for a polar trek. And if you wouldn't buy a pretty picture to hang on your sled in preference to a parka, you should consider not helping save a famous painting in preference to helping save a thousand lives.

Not all charitable choices are as simple as that one, but many charitable choices do have right answers. GiveWell.org, a site which collects and interprets data on the effectiveness of charities, predicts that antimalarial drugs save one child from malaria per $5,000 worth of medicine, but insecticide-treated bed nets save one child from malaria per $500 worth of netting. If you want to save children, donating bed nets instead of antimalarial drugs is the objectively right answer, the same way buying a $500 TV instead of an identical TV that costs $5,000 is the right answer. And since saving a child from diarrheal disease costs $5,000, donating to an organization fighting malaria instead of an organization fighting diarrhea is the right answer, unless you are donating based on some criteria other than whether you're helping children or not.

Say all of the best Arctic explorers agree that the three most important things for surviving in the Arctic are good boots, a good coat, and good food. Perhaps they have run highly unethical studies in which they release thousands of people into the Arctic with different combinations of gear, and consistently find that only the ones with good boots, coats, and food survive. Then there is only one best answer to the question "What gear do I buy if I want to survive" - good boots, good food, and a good coat. Your preferences are irrelevant; you may choose to go with alternate gear, but only if you don't mind dying.

And likewise, there is only one best charity: the one that helps the most people the greatest amount per dollar. This is vague, and it is up to you to decide whether a charity that raises forty children's marks by one letter grade for $100 helps people more or less than one that prevents one fatal case of tuberculosis per $100 or one that saves twenty acres of rainforest per $100. But you cannot abdicate the decision, or you risk ending up like the 11,000 people who accidentally decided that a pretty picture was worth more than a thousand people's lives.

Deciding which charity is the best is hard. It may be straightforward to say that one form of antimalarial therapy is more effective than another. But how do both compare to financing medical research that might or might not develop a "magic bullet" cure for malaria? Or financing development of a new kind of supercomputer that might speed up all medical research? There is no easy answer, but the question has to be asked.

What about just comparing charities on overhead costs, the one easy-to-find statistic that's universally applicable across all organizations? This solution is simple, elegant, and wrong. High overhead costs are only one possible failure mode for a charity. Consider again the Arctic explorer, trying to decide between a $200 parka and a $200 digital camera. Perhaps a parka only cost $100 to make and the manufacturer takes $100 profit, but the camera cost $200 to make and the manufacturer is selling it at cost. This speaks in favor of the moral qualities of the camera manufacturer, but given the choice the explorer should still buy the parka. The camera does something useless very efficiently, the parka does something vital inefficiently. A parka sold at cost would be best, but in its absence the explorer shouldn't hesitate to choose the parka over the camera. The same applies to charity. An antimalarial net charity that saves one life per $500 with 50% overhead is better than an antidiarrheal drug charity that saves one life per $5000 with 0% overhead: $10,000 donated to the high-overhead charity will save ten lives; $10,000 to the lower-overhead will only save two. Here the right answer is to donate to the antimalarial charity while encouraging it to find ways to lower its overhead. In any case, examining the financial practices of a charity is helpful but not enough to answer the "which is the best charity?" question.

Just as there is only one best charity, there is only one best way to donate to that charity. Whether you volunteer versus donate money versus raise awareness is your own choice, but that choice has consequences. If a high-powered lawyer who makes $1,000 an hour chooses to take an hour off to help clean up litter on the beach, he's wasted the opportunity to work overtime that day, make $1,000, donate to a charity that will hire a hundred poor people for $10/hour to clean up litter, and end up with a hundred times more litter removed. If he went to the beach because he wanted the sunlight and the fresh air and the warm feeling of personally contributing to something, that's fine. If he actually wanted to help people by beautifying the beach, he's chosen an objectively wrong way to go about it. And if he wanted to help people, period, he's chosen a very wrong way to go about it, since that $1,000 could save two people from malaria. Unless the litter he removed is really worth more than two people's lives to him, he's erring even according to his own value system.

…and the same is true if his philanthropy leads him to work full-time at a nonprofit instead of going to law school to become a lawyer who makes $1,000 / hour in the first place. Unless it's one HELL of a nonprofit. (Editor: since this article was written, there has been much more discussion about whether earning to give is the best way to have an impact. It is likely to vary significantly between individuals. For more details, see this article.)

The Roman historian Sallust said of Cato "He preferred to be good, rather than to seem so". The lawyer who quits a high-powered law firm to work at a nonprofit organization certainly seems like a good person. But if we define "good" as helping people, then the lawyer who stays at his law firm but donates the profit to charity is taking Cato's path of maximizing how much good he does, rather than how good he looks.

And this dichotomy between being and seeming good applies not only to looking good to others, but to ourselves. When we donate to charity, one incentive is the warm glow of a job well done. A lawyer who spends his day picking up litter will feel a sense of personal connection to his sacrifice and relive the memory of how nice he is every time he and his friends return to that beach. A lawyer who works overtime and donates the money online to starving orphans in Romania may never get that same warm glow. But the concern with a warm glow is, at root, concern about seeming good rather than being good - albeit seeming good to yourself rather than to others. There's nothing wrong with donating to charity as a form of entertainment if it's what you want - giving money to the Art Fund may well be a quicker way to give yourself a warm feeling than seeing a romantic comedy at the cinema - but charity given by people who genuinely want to be good and not just to feel that way requires more forethought.

It is important to be rational about charity for the same reason it is important to be rational about Arctic exploration: it requires the same awareness of opportunity costs and the same hard-headed commitment to investigating efficient use of resources, and it may well be a matter of life and death. Consider going to www.GiveWell.org and making use of the excellent resources on effective charity they have available.

This article was written in 2010, and estimates for the cost-effectiveness of interventions have changed since then. We recommend visiting GiveWell for more up to date estimates. This article was originally published as ‘Efficient Charity: Do Unto Others’ on lesswrong.com by Scott Alexander.

 


About the Author

 

Effective Altruism is a project of The Centre for Effective Altruism, a registered charity in England and Wales. Effective altruism is changing the way we do good. Effective altruism is about answering one simple question: how can we use our resources to help others the most? Rather than just doing what feels right, we use evidence and careful analysis to find the very best causes to work on. But it's no use answering the question unless you act on it. Effective altruism is about following through. It's about being generous with your time and your money to do the most good you can.

Globalization's Great Triumph: The Death of Extreme Poverty

It is the greatest story of our time, and it’s one few have heard of. Mankind is defeating extreme poverty.

 The World Bank has just released its latest numbers, and according to them, the proportion of the world population in extreme poverty, i.e. who consume less than $1.90 a day, adjusted for local prices, declined from 36 percent in 1990 to 10 percent in 2015.

Even though world population increased by more than two billion people, the number of extremely poor was reduced by almost 1.2 billion. It means that in the now much-despised era of globalization, almost 130,000 people rose out of poverty every day.

Every one of those 130,000 represents another individual who get closer to a decent life with basic education, access to health care and opportunities in life. This is the greatest achievement in human history.

At the Millennium Summit of the United Nations in 2000, the world’s countries set the goal of halving the 1990 incidence of extreme poverty by 2015. This was met more than five years ahead of deadline.

Progress has been fastest in Asia. In East Asia, extreme poverty was reduced from 62 to 2 percent and in South Asia from 47 to 12 percent. But other regions have also seen progress.

In Latin America, poverty was reduced from 14 to 4 percent. The laggard is Sub-Saharan Africa, but even there, extreme poverty has been reduced, from 54 to 41 percent.

That is higher than anywhere else in the world, but it means that extreme poverty is now more rare in Africa than it was in the world’s richest countries at the dawn of the industrial revolution.

It is fascinating that this progress takes place just as many in the West are starting to doubt free trade and global capitalism.

Because this poverty reduction happened in the countries that started liberating their markets and began to integrate into the global economy, like China in the early 1980s and in India and Vietnam in the early 1990s.

As the Indian economist Gurcharan Das says about his country’s progress in the documentary, "India Awakes": “The principles that brought so much prosperity and freedom to the West are being affirmed in a country that is in the East."

Multinational institutions are good at producing seminars and elaborate plans about how to create some kind of mythological “pro-poor growth." But the best way of making growth pro-poor is to make growth high and keep it high.

A study of 121 countries over four decades by economists David Dollar, Tatjana Kleineberg and Aart Kraay showed that most of the cross-country variation in growth in incomes of the poor is due to growth in average incomes, not changes in distribution.

Just at the moment that both the left and the right give up on global capitalism, it is celebrating its largest accomplishment. One of the reasons so many despair is that they don’t know about this development.

When Americans were asked what had happened to global poverty the last 20 years, only 5 percent answered that it had halved; 66 percent thought it had doubled.

Another reason is that many believe in the myth of the zero-sum game: For someone to win, someone else has to lose, and so they think they are the ones who will have to pay if China or Mexico prospers.

But that does not apply to a free market where no deal ever takes place unless both parties think it will make them better off and where trade and specialization helps to increase the size of the global pie.

But this is a particularly dismal time for the U.S. to give up on globalization and start trade wars. According to an estimate from the Brookings Institution, the global middle class grew by 2.3 billion during these 25 years.

That’s another 2.3 billion who are soon consuming what Western middle classes consume and Western companies produce — fashionable brands, modern transportation, home electronics, medical drugs, entertainment and financial services.

That giant sucking sound we could soon be hearing is from billions of people in the South and the East, importing whatever goods and services our companies produce. Fortune favors the brave. Protectionism ruins it for everybody.


About the Author

Johan Norberg is a senior fellow at the Cato Institute. He is the author of "Progress: Ten Reasons to Look Forward to the Future."

Give Women the Freedom to Fix Poverty

A bizarre column in Australia’s Daily Telegraph last month argued that it should be illegal to be a stay-at-home mom. The piece was met with ridicule, and rightly so. Women should be free to make their own choices about family and career. Fortunately, no country actually bans a woman’s choice to be a homemaker. Unfortunately, in much of the world, a woman’s options to work outside the home are severely limited by government meddling.

One of the more frightening revelations in the UN’s recent Human Development Report concerns the state of women’s economic freedom around the world. In 100 countries the government forbids women from working in some professions. Argentinian women are barred from running distilleries, Russian women from becoming woodworkers or freight train conductors, and Emirati women from “managing and monitoring mechanical machines”.

For too many women around the world, economic freedom is a distant dream. Countries should adopt policies of economic freedom not only because women everywhere are capable of making their own choices, but because adopting such policies is a proven road out of poverty.

Consider Ethiopia, one of the world’s poorest countries. Before the turn of the millennium, Ethiopian women lacked fundamental economic freedoms, including equal property rights and the freedom to seek paid employment. Husbands could maintain sole control over joint property and deny their wives permission to work outside the home.

One Ethiopian man who emigrated to the United States lamented the loss of that power:

“My wife and I came here together, but after a few short years my wife’s ideas and behaviours began to change … She discovered she could have her own job and money. That was something she could not do in Ethiopia. She then went out and got a job and earned money for herself. This new job and money gave her ideas about more freedom and more independence. She then decided to manage her own money, buy her own car, buy her own clothing and other items she wanted – like American women do. She became so independent that I could no longer control her.

In 2000, a revision to Ethiopia’s family code law granted wives equal authority to conjointly administer common marital property and enshrined the right to work outside the home without spousal permission. The legal revision was rolled out in some regions and cities before others, allowing researchers to examine the law’s effect.

The early adopters of increased economic freedom for women saw women’s labour market participation rise. More women engaged in paid work and work with higher education requirements, as well as year-round employment. “In other words, the representation of women increased in occupations that are likely to have higher returns,” the study concluded. The change was most dramatic among young, single women whose life expectations and household dynamics had not yet been set.

Wife-beating, unfortunately, is still a “pervasive social problem”, and in rural areas women’s economic freedoms are sometimes ignored. Over 70 per cent of Ethiopia’s women have personally suffered domestic violence at some point in their lives, according to one survey taken five years after the legal revision. An overview of 10 such studies found that lifetime prevalence of domestic violence against women ranged from 20 to 78 per cent in Ethiopia.

Unlike Ethiopian immigrants to the United States, it is clear that many women in Ethiopia still lack the ability to earn and manage money without interference. Still, the legal change is a step in the right direction.

Even today, there remain 18 countries where husbands can legally deny their wives permission to work. They are Bahrain, Cameroon, Chad, Comoros, Congo (Kinshasa), Gabon, Guinea, Iran, Jordan, Kuwait, Mauritania, Niger, Qatar, Sudan, Syria, United Arab Emirates, West Bank and Gaza, and Yemen. Perhaps their governments fear that economic freedom might give women “ideas about more freedom and more independence”. It’s time that women everywhere were free to make their own choices on whether to work in or outside the home.


About the Author

Chelsea Follett is the managing editor of HumanProgress.org

Are Humans Prepared to Overcome Resource Scarcity?

1.jpg

Human civilization is very well equipped to overcome resource scarcity in the future, if we can correctly identify, preserve, and expand those policies and institutions that made overcoming resource scarcity possible in the past. Please read this for a summary of the kinds of horrors that can occur when people mistakenly come to believe that the only solution to resource scarcity is to reduce the size of the population. History has shown that even as the population grows, humanity is perfectly capable of making resources more plentiful by using them more efficiently, increasing their supply and developing substitutes.

Population growth can certainly be a problem among nonhuman animals: population explosions among, for example, rabbits, can lead to an exhaustion of natural resources in their environment and eventually a population collapse. But human beings, unlike other animals, create wealth, engage in complex exchange and innovate their way out of scarcity. That was the great insight of economist Julian Simon.

Simon, in his 1981 book The Ultimate Resource, argued that the premise that “overpopulation” is a problem at all is incorrect. More people in the world means more people to solve problems, and less resource scarcity. As he wrote: “For all practical purposes there are no resources until we find them, identify their possible uses, and develop ways to obtain and process them. We perform these tasks with increasing skill as technology develops. Hence, scarcity diminishes.”

Human beings, with their inventive potential, are themselves, in Simon’s phrase, “The Ultimate Resource.” Each child born today eventually grows up to make resources less scarce, on average, by contributing to innovation and the global economy. Simon argued a growing population produces more ideas. More ideas lead to more innovations and more innovations can improve productivity. That higher productivity then translates into more resources to go around and better standards of living.

Of course, that only holds if people maintain the freedom to innovate and exchange. If that freedom is not present, then a return to scarcity is very possible. Just look to Venezuela to see how quickly prosperity can unravel and resources that were once plentiful can become scarce, when economic freedom is denied.

The future will undoubtedly bring new challenges related to resources. But there is no obvious reason why, given the right policies, growth cannot continue indefinitely—particularly as technology advances. Humanity may one day even gain access to resources beyond the Earth’s limits, such as by mining valuable minerals in asteroids.


About the Author

Chelsea Follett is managing editor of HumanProgress.org