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Julian Simon Was Right About Population and Prosperity

Blog Post | Economic Growth

Julian Simon Was Right About Population and Prosperity

A half-century of population growth, increasing prosperity, and falling commodity prices.

Many people believe that global population growth leads to greater poverty and more famines, but evidence suggests otherwise. Between 1960 and 2016, the world’s population increased by 145 percent. Over the same time period, real average annual per capita income in the world rose by 183 percent.

Instead of a rise in poverty rates, the world saw the greatest poverty reduction in human history. In 1981, the World Bank estimated, 42.2 percent of humanity lived on less than $1.90 per person per day (adjusted for purchasing power). In 2013, that figure stood at 10.7 percent. That’s a reduction of 75 percent. According to the Bank’s more recent estimates, absolute poverty fell to less than 10 percent in 2015.

Rising incomes helped lower the infant mortality rate from 64.8 per 1,000 live births in 1990 to 30.5 in 2016. That’s a 53 percent reduction. Over the same time period, the mortality rate for children under five years of age declined from 93.4 per 1,000 to 40.8. That’s a reduction of 56 percent. The number of maternal deaths declined from 532,000 in 1990 to 303,000 in 2015 — a 43 percent decrease.

Famine has all but disappeared outside of war zones. In 1961, food supply in 54 out of 183 countries was less than 2,000 calories per person per day. That was true of only two countries in 2013. In 1960, average life expectancy in the world was 52.6 years. In 2015, it was 71.9 years — a 37 percent increase.

In 1960, American workers worked, on average, 1,930 hours per year. In 2017, they worked 1,758 hours per year — a reduction of 9 percent. The data for the world are patchy. That said, a personal calculation based on the available data for 31 rich and middle-income countries suggests a 14 percent decline in hours worked per worker per year.

Enrollment at all education levels is up. For example, the primary school completion rate rose from 74 percent in 1970 to 90 percent in 2015 — a 20 percent increase. The lower secondary school completion rate rose from 53 percent in 1986 to 77 percent in 2015 — a 45 percent increase. Tertiary school enrollment rose from 10 percent in 1970 to 36 percent in 2015 — a 260 percent increase.

Even our air is getting cleaner. In the United States, for example, aggregate emissions of six common pollutants (i.e., carbon monoxide, lead, nitrogen dioxide, ozone, fine and coarse particulate matter, and sulfur dioxide) fell by 67 percent between 1980 and 2016.

And, in spite of a recent increase in terrorist killings and the number of civil wars, the world is still much safer than it was at the height of the Cold War.

Last but not least, an ordinary person has greater access to information than ever before. All in all, we live on a safer, cleaner, and more prosperous planet than was the case in 1960.

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CNBC | Food Production

Chipotle Tests Automation for Burrito Bowls and Salads

“The Hyphen robot will make burrito bowls and salads for digital orders only. The technology moves the bowls underneath the digital make line to dispense the correct ingredients. Simultaneously, an employee can assemble digital orders for other items, such as tacos, quesadillas and burritos, on the digital make line. When the robot is done making an order, it sends the bowl or salad back up to the surface so employees can properly package the order.”

From CNBC.

The Human Progress Podcast | Ep. 37

Stephen Barrows: The Economic Madness of Malthusianism

The economist Stephen Barrows joins Chelsea Follett to discuss the intellectual history of population economics, the benefits of population growth, and what we can expect from a future of falling fertility.

Blog Post | Air Transport

The Gift of Flying Home for Christmas

The time price of airfares has fallen 38.1 percent in five years.

Airports will be busy again this Christmas. According to Kayak data, domestic flight searches are up 155 percent compared to 2020, though they are still 43 percent lower than in 2019.

Fortunately, we continue to enjoy the gift of decreasing airfares. The Bureau of Labor Statistics reports that since 2016, airfares have decreased in price from an index value of 270.9 to 203.8, or 24.8 percent.

Since we buy things with money but pay for them with time, we prefer to analyze the cost of airfares using time prices. To calculate the time price, we divide the nominal price by the nominal wage. That will give us the number of hours of work required to earn enough money to buy an airplane ticket.

We can calculate the time prices using data from the Bureau of Labor Statistics. They report that the nominal blue-collar hourly wage increased by 21.5 percent from $21.72 in 2016 to $26.40 in 2021.

It took 12.47 hours to earn enough money to buy the average airplane ticket in 2016. Today, it takes just 7.72 hours. That’s a decline of 38.1 percent.

For the same amount of time working, you can get 61.6 percent more airfares today than in 2016. Flying abundance has been growing at a compound annual rate of around 10.7 percent a year. At this rate, we get twice as many flights every 7.22 years.

Excerpt from our forthcoming book, Superabundance.

Blog Post | Scientific Research

The Fastest Learning Curve in History?

Human genome sequencing has become over a million times more abundant since 2003. In the near future, the price may drop another 90 percent from $1,000 to $100.

The Human Genome Project was an international effort to map the entire three-billion-letter human genome. The project launched in 1990 and concluded its work in 2003 – 50 years after James Watson and Francis Crick discovered the double-helix structure of DNA. The U.S. government contributed $3.8 billion toward the project, though the cost of the actual sequencing was lower.

Dr. Eric Green, the director of the National Human Genome Research Institute, recalled that “the first genome cost us about a billion dollars … Now when we sequence a person’s genome, it’s less than $1000, so that’s a million-fold reduction.”

Note that blue-collar worker hourly compensation (wages and benefits) rate increased by 51 percent between 2003 and 2020 (i.e., from $21.54 to $32.54). Consequently, it would have cost that worker 46,425,255 hours of work to earn enough money to buy his or her DNA sequence in 2003, but only 30.73 hours of work to do so in 2020.

The time price of DNA sequencing, in other words, dropped by 99.99993 percent. For the same hours of work required to earn the money to buy one DNA sequence in 2003, a blue-collar worker can get over 1.5 million sequences today. That amounts to over a 150 million percent increase in DNA sequencing abundance.

Now a group of Chinese entrepreneurs at the BGI hope to get the price down to $100 using a robotic arm and a roomful of chemical baths and imaging machines. Rade Drmanac, chief scientific officer of Complete Genomics, a division of BGI, noted that at $100, genetic sequencing could soon be common for every child at birth.

The National Human Genome Research Institute tracks costs associated with DNA sequencing and produced the chart below. Note the logarithmic scale on the vertical (i.e., Y) axis:

Exponential innovation occasionally experiences a double exponent or punctuation as it did in January of 2008 when DNA sequencing transitioned from the Sanger method (i.e., dideoxy chain termination sequencing) to “second generation” or “next-generation” DNA sequencing technologies.

A fall in the cost of DNA sequencing from $1,000,000,000 to $100 over 20 years would imply a compound rate of decline of 6.5 percent a month. (Adjusting for the time price puts the compound rate of decline at 7.13 percent per month.) Moore’s law indicates that prices of computing decline at 2.85 percent a month. So, the cost of DNA sequencing per genome may amount to the fastest price decline in history.

Long live learning curves. The knowledge they create is our true wealth.