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Peter Thiel’s Pessimism Is (Largely) Mistaken

Blog Post | Science & Technology

Peter Thiel’s Pessimism Is (Largely) Mistaken

We didn’t get flying cars, but we did get iPhones. Billions of them.

Summary: Peter Thiel, a successful entrepreneur and investor, has expressed the pessimistic view that human progress has stagnated in recent decades. This article challenges his perspective by showing how basic resources and digital technologies have become much more abundant over time.


At a recent conference at Stanford University, the American entrepreneur Peter Thiel poured ice water on the idea that humanity has made much progress in recent decades. Thiel, the brilliant billionaire who helped to start Facebook and PayPal, is famous for saying, “They promised us flying cars, and all we got was 140 characters.” At the Stanford conference, he doubled down on his pessimism, noting that “we’ve had this incredible stagnation for the last 50 years, and then we have unbelievable amounts of propaganda that this is not true.”

Thiel’s perspective appears to be driven by the supposed lack of progress in such areas as supersonic transport, biotechnology, and energy. Perhaps, but human flourishing consists of more than flying cars, life extension and nuclear fusion – all of which may yet come to fruition. And so, we would ask him to follow his fellow PayPal co-founder Elon Musk’s advice and “look at the numbers.” Hopefully, Thiel will reassess his attitude toward other types of progress experienced by the average person.

Consider resources. In our new book, Superabundance, we looked at a wide variety of commodities, including foods, fuels, metals, minerals and finished goods. What we saw was an incredible growth in abundance. More specifically, when we looked at the time prices of 50 basic commodities between 1980 and 2018, we found that the average fell by 71.6 percent. That means for the same time of work it took to earn enough money to buy one unit in the basket of our 50 commodities in 1980, people could get 3.52 units in 2018. That suggests a 252 percent increase in personal resource abundance. 

Over the same period, the global population increased by 71.2 percent. In our framework, global resource abundance is equal to personal resource abundance multiplied by the population size. Based on that measure, the world saw a 4.84 percent compound annual growth rate, which means that resource abundance doubled every 14.66 years. 

It’s not just basic commodities that are becoming more abundant. When we compared the time prices of 35 everyday items, such as appliances and clothing, between 1979 and 2019, we found that blue-collar workers in the United States saw their abundance increase by 261 percent. On average, a worker gets 3.61 units for the same length of work that was required to buy just one in 1979. 

Thiel is right. We didn’t get flying cars, but we did get iPhones. Billions of them. For under 24 hours of work, an ordinary person can get a device that would have cost over $100 million in 1991. Would you rather have a flying car or smartphone? The truth is that many of us would choose the latter.

Thiel is somewhat dismissive of iPhones, sarcastically asking if “the flatness of the new iPhone is such a large hedonic adjustment that Grandma should be happy to eat cat food.” Peter’s been spending too much time listening to Senator Bernie Sanders. There’s a 75 percent chance that Grandma owns a smartphone and a 50 percent chance that she owns a cat. She also enjoys abundant food and a life expectancy of 80 years, up from 73 in 1960. Her smartphone has dozens of apps that help her talk to her grandkids, monitor her health, and entertain herself with puzzles and games.

At Stanford, Thiel also noted that if you want to solve our macroeconomic problems in the United States, you could solve every problem in our society if you got to 4 percent GDP growth.” Our analysis of 18 different datasets with several of them going back to 1850 suggests that global resource abundance has been increasing at a compound annual rate ranging from 2.39 to 10.51 percent – with an average of 4.38 percent.

Progress has been especially good for the poor – especially when considering time inequality. A person in China working eight hours a day to earn enough money to buy food in 1960, would only need to spend around 18 minutes to do the same in 2021. For the time it took to buy one meal in 1960, he or she would get 27 meals in 2021. The Chinese gained 7 hours and 42 minutes a day to do with as they please. Indians gained 6 hours and 30 minutes a day over the same period. Some 3 billion people now have much more time to learn and contribute to knowledge discovery and creation.

While it is easy to be pessimistic if you compare today to utopia, a much better perspective is to look at yesterday and see how far we’ve come in our journey to lift everyone from poverty. We’re experiencing growth in material abundance, time abundance, and choice abundance. Welcome to Superabundance!

Blog Post | Economic Growth

The Human Meaning of Economic Growth

Misunderstandings of the relationship between wealth and flourishing have obscured the anti-​human implications of slowing growth rates.

Summary: Economic growth has been a driving force behind the dramatic improvements in human wellbeing over the past few centuries. This growth has resulted from the Enlightenment, the Industrial Revolution and capitalism. Criticisms of growth stem in large part from misunderstandings of the relationship between economics and human values.


Why is the world as prosperous a place as it is? And why isn’t it much more prosperous? These questions are broad enough to admit countless answers, but as good an answer as any is the economic growth rate.

You might have heard that economic growth is overrated, that it’s a fine idea, but unsustainable, or even that it’s entirely counterproductive because it puts profits above people and the economy above the planet. These narratives have been widespread in recent years. They’re also based on a fundamental misconception of the nature of wealth and what a growing economy means for humanity.

Properly conceived, wealth is the actualization of human values in the real world. Economic growth is the upward trajectory of human achievement. The forms of prosperity that most of humanity strives for, such as health, knowledge, pleasure, safety, professional and personal freedom, and so many others, were vastly scarcer throughout most of human history—and would be orders of magnitude more abundant today if economic policies had been slightly different. That is the power of economic growth, and it is within our power to influence the world of future generations for better or worse.

The History of Economic Growth

Virtually everywhere and always throughout human history, economic growth was nonexistent. While pockets of momentary economic progress took place in certain instances, the overall trend was one of perpetual stagnation. But just a few hundred years ago, with the advent of the Enlightenment, the Industrial Revolution, and capitalism, that all began to change.

When the conceptual tools of science became widely applied to create the technological advancements of the Industrial Revolution, they brought an unprecedented optimism about the capacity for investment in new discoveries and inventions to reliably uncover useful knowledge of the natural world. This change inspired the broad transformation of mere wealth (resources hidden away in vaults and treasure chests) into capital (resources invested in new inventions and discoveries).

By the time Friedrich Engels and Karl Marx wrote their Communist Manifesto in 1848, the optimism of investment had already transformed Western Europe. As Engels and Marx saw it, “The bourgeoisie [capitalist class], during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together. Subjection of Nature’s forces to man, machinery, application of chemistry to industry and agriculture, steam-​navigation, railways, electric telegraphs, clearing of whole continents for cultivation, canalisation of rivers, whole populations conjured out of the ground — what earlier century had even a presentiment that such productive forces slumbered in the lap of social labour?”

Marx and Engels misunderstand the complex reasons for increased productivity (attributing it to untapped “social labour”) but the quotation is significant because, despite their sympathy for state centralization of the economy, they could not ignore the success of capitalism.

While no year before 1700 saw a gross world product of more than $643 billion (in international inflation-​adjusted 2011 dollars), by 1820 global GDP reached 1 trillion. By 1940 the number had passed 7 trillion, and by 2015 it had passed 108 trillion.

Contrary to the popular misconception that capitalism has made the rich richer and the poor poorer, this new wealth contributed to growing the economies of every world region while outpacing population growth. While the world’s extreme poor have become wealthier so too have all other economic classes.

What’s So Great about Growth?

A growing economy isn’t about stacks of paper money getting taller, or digits being added to the spreadsheets of bank ledgers. These things may be indicators of growth, but the growth itself is composed of goods and services becoming more abundant. Farms and factories producing more and better consumption goods; engineers creating better machines and materials; clean water reaching more communities; sick people receiving better healthcare; scientists running more experiments, poets writing more poems, education becoming more broadly accessible; and for whatever other forms of value people choose to exchange their savings and labor.

Gross domestic product or GDP (called gross world product or world GDP when applied at the global level) is an imperfect but useful and widely employed measure of economic growth, and its reflection in the real world takes such forms as rising life expectancy, nutrition, literacy, safety from natural disaster, and virtually every other measure of human flourishing. This is because, at the most fundamental level, “economic growth” means the transformation and rearrangement of the physical environment into more useful forms that people value more.

Before the year 1820, human life expectancy had always been approximately 30-35 years. But with the great decline in poverty and rise of capital investment in technology and medicine, global life expectancy has roughly doubled in every geographic region in the last century. Similar trends have occurred in global nourishmentinfant survivalliteracy, access to clean water, and countless other crucial indicators of wellbeing. While these trends are bound to take the occasional momentary downturn because of life’s uncertainties and hardships, the unidirectional accumulation of technological and scientific knowledge since the Age of Enlightenment gives the forward march of progress an asymmetric advantage. For example, the COVID-19 pandemic and lockdowns resulted in a brief and tragic decline in life expectancy, but the number has since risen to an all-​time high of 73.36 years as of 2023.

What is the direct causal connection between economic growth and these improvements to human wellbeing? Consider the example of deaths by natural disaster, which have fallen in the last century from about 26.5 per 100,000 people to 0.51 per 100,000 people. More wealth means buildings can be constructed from stronger materials and better climate controls. And when those protections aren’t enough, a wealthier community can afford better infrastructure such as roads and vehicles to efficiently get sick or injured people to the hospital. When those injured end up in the hospital, a wealthier society’s medical facilities will be equipped with more advanced equipment, cleaner sanitation, and better-​trained doctors that will provide higher quality medical attention. These are just a few examples of how wealth allows humans to transform their world into a more hospitable place to live and face the inevitable challenges of life.

The benefits of economic growth go far beyond the maximization of health and safety for their own sake. If what you value in life is the contemplation of great art, the exaltation of your favorite deity, or time spent with your loved ones, wealth is what awards you the freedom to sustainably pursue those values rather tilling the fields for 16 hours per day and dying in your 30s. Wealth is what provides you access to an ever-​improving share of the world’s culture by increasing the abundance and accessibility of printed, recorded, and digital materials. Wealth is what provides you with the leisure time and transportation technology to travel the world and experience distant wonders, remote holy sites, and people whose personal or professional significance to you would otherwise dwell beyond your reach.

As the Harvard University cognitive scientist Steven Pinker demonstrates in his popular book Enlightenment Now, “Though it’s easy to sneer at national income as a shallow and materialistic measure, it correlates with every indicator of human flourishing, as we will repeatedly see in the chapters to come.”

The Long-​Term Future of Growth

Human psychology is ill-​equipped to comprehend large numbers, especially as they relate to the profound numerical implications of exponentiation. If it sounds insignificant when politicians and journalists refer to a 1 percent or 2 percent increase or decrease in the annual growth rate, then like most people, you’re being deceived by a quirk of human intuition. While small changes to the economic growth rate may not have noticeable effects in the short term, their long- term implications are absolutely astonishing.

Economist Tyler Cowen has pointed out in a Foreign Affairs article, “In the medium to long term, even small changes in growth rates have significant consequences for living standards. An economy that grows at one percent doubles its average income approximately every 70 years, whereas an economy that grows at three percent doubles its average income about every 23 years—which, over time, makes a big difference in people’s lives.” In his book Stubborn Attachments, Cowen offers a thought experiment to illustrate the real-​world implications of such “small changes” to the growth rate: “Redo U.S. history, but assume the country’s economy had grown one percentage point less each year between 1870 and 1990. In that scenario, the United States of 1990 would be no richer than the Mexico of 1990.”

Cowen gave the negative scenario in which the growth rate was 1 percent slower. US Citizens would have drastically shorter lifespans, less education, less healthcare, less safety from violence, more susceptibility to disease and natural disaster, fewer career choices, and so on. Now imagine the opposite scenario, in which US economic policy had just 1 additional percentage point of growth each year. The average American today would in all probability be living much longer, having much nicer housing, choosing from far more career opportunities, and enjoying more advanced technology.

Just imagine your income doubling, and what you could do for yourself, your family, or the charity of your choice with all that extra wealth. Something along those lines could have happened to most Americans. But instead, growth has been significantly slowed in the United States because taxes and regulations have constantly disincentivized and disallowed new innovations.

At the margins, many dying of preventable diseases could have been cured, many who spiraled into homelessness could have accessed the employment opportunities or mental health treatment they needed, and so on. While economic fortune seems like a luxury to those who already enjoy material comfort, there are always many at the margin for whom the health of the economy is the difference between life and death.

These are among the reasons that Harvard University economist Gregory Mankiw concludes in his commonly used college textbook Macroeconomics that, “Long-​run economic growth is the single most important determinant of the economic well-​being of a nation’s citizens. Everything else that macroeconomists study — unemployment, inflation, trade deficits, and so on — pales in comparison.”

When we think of the future our children or grandchildren will live in, depending on our choices between even slightly more or less restrictive economic policies today, we could be plausibly looking at a future of widespread and affordable space travel, life-​changing education and remote work opportunities in the metaverse, new sustainable energy innovations, a biotechnological revolution in the human capacity for medical and psychological flourishing, genome projects and conservation investments to revive extinct and protect endangered species, and countless other improvements to the human condition. Or we could be looking at a drawn-​out stagnation in poverty alleviation, technological advancement, and environmental progress. The difference may well hinge on what looks today like a tiny change in the rate of compounding growth.

At the broadest level, more wealth in the hands of the human species represents a greater capacity of humans to chart their course through life and into the future in accordance with their values. Like all profound and far-​reaching forms of change, economic growth has a wide range of consequences, some intended and others unintended, many desirable and many others undesirable. But it is not a random process. It is directed by the choices of individuals, and allocated by their drive to devote more resources and more investment into those things they view as worthwhile. Ever since the Scientific Revolution, the Enlightenment, and the Industrial Revolution, the investment in human values has been on balance a positive sum game, in which one group’s gains do not have to come in the form of another group’s losses. This is demonstrated by the upward trends in human flourishing since the global rise in exponential economic growth. Indeed, it is intrinsic to the fundamental difference between a growing and a shrinking or stagnant economy: In a growing economy, everyone can win.

This article was published at Libertarianism.org on 11/17/2023.

Blog Post | Progress Studies

The Rediscovery of Human Progress

A new movement promoting scientific, technological, and economic solutions to humanity's problems emerges.

Summary: The modern world is built on centuries of progress, yet many take its comforts and opportunities for granted. A new movement aims to redefine our understanding of advancement, and focuses on celebrating humanity’s achievements to shape an optimistic narrative for the future. From fostering technological innovation to advocating for economic growth, this coalition strives to combat cultural pessimism and inspire a renewed belief in the potential for a better world.


“The tragedy of today is that we are the heirs and the beneficiaries of thousands of years of progress and we take it for granted. You wake up in a nice soft bed. You go get fresh milk and orange juice from the fridge. You take a shower under hot running water. You hop on the train or car to work. You take the elevator up to the 40th floor. You earn your living by typing on a computer behind big plate glass windows in an air-conditioned building. You relax in the evening by streaming movies and music or catching up with friends from around the world in your real-time video calls. None of this existed a couple centuries ago. A lot of it didn’t exist a few decades ago. And yet it’s just so easy to go through your days enjoying all of that without giving a second thought to where it all came from or how, or how challenging it was to bring all of those amazing inventions into the world.”

Jason Crawford, founder of the Roots of Progress project, is one of the leaders of a new pro-progress movement that is coalescing in a collection of think tanks, websites, and other intellectual incubators. It celebrates humanity’s achievements so far. It judges progress not in technocratic terms but with an eye on outcomes for individual human beings. And it imagines, again in Crawford’s words, an “ambitious technological future that we want to live in and are excited to build.”

Rethinking Progress

These groups promoting economic growth spurred by scientific, technological, and industrial progress are quite distinct from modern political progressives. Contemporary progressives trace their ideological lineage back to the Progressive movement that arose in American politics around the turn of the 20th century as a response to the consequences of mass urbanization, mass immigration, increasing economic inequality, and rapid industrial growth.

Fundamental then as it is today among modern progressives is their certainty that they know the direction in which “progress” must go and that exercise of government power guided by a technocratic elite is central to achieving their version of “progress.” Princeton University historian Thomas C. Leonard observes that early 20th century “progressives believed in a powerful, centralized state, conceiving of government as the best means for promoting the social good and rejecting the individualism of (classical) liberalism.” In addition, he says, they believed in “the disinterestedness and incorruptibility of the experts who would run the technocracy they envisioned, and a faith that expertise could not only serve the social good, but also identify it.”

A hundred years later, one illustrative distillation of modern progressivism is “The Progressive Promise” manifesto issued by the 101 members of the Congressional Progressive Caucus. “We believe that government must be the great equalizer of opportunity for everyone,” forthrightly states the Promise. “We support bold policies to close the gap between the rich and everyday Americans and ensure our government delivers essential services to every person in this country.” They envision “transformational change” that includes “ending poverty and income inequality,” and “advancing racial justice and equity in every policy.” It is notable that unlike their early 20th century forebears’ belief in technological progress and economic growth, this essentially redistributionist manifesto nowhere mentions policies aimed at advocating and promoting either in the 21st century. In their view, uncontrolled economic growth is leading to environmental catastrophe and to appalling social consequences.

The contours of the new progress movement stretch from the Human Progress project at the libertarian Cato Institute to the “eco-modernist” initiatives at the Breakthrough Institute and the Pritzker Innovation Fund. Four relatively new groups at the forefront of the pro-progress forces are The Roots of Progress, the Institute for Progress, The Progress Network, and Works in Progress. Together, they are—as The Progress Network puts it—”building an idea movement that speaks to a better future in a world dominated by voices that suggest a worse one.”

Cultural Pessimism

There are indeed many voices who say our future is bleak. William Rees, a population ecologist at The University of British Columbia, claimed last year that “collapse is not a problem to be solved, but rather the final stage of a cycle to be endured.” Also last year, Stanford University biologist and indefatigable population doomster Paul Ehrlich told 60 Minutes “that the next few decades will be the end of the kind of civilization we’re used to.” A 2022 paper in the Proceedings of the National Academy of Sciences declared that climate change could “result in worldwide societal collapse or even eventual human extinction.” Last year an article in the Journal of Industrial Ecology suggested that civilizational collapse is likely this decade and certain by 2040.

These dire prognostications are reflected in bleak public attitudes, especially in rich developed countries. A YouGov poll in 2016 found only 6 percent of Americans thought the world was getting better. Other rich countries had even lower scores: Germany and the United Kingdom were at 4 percent, Australia and France at 3 percent. (The Chinese were the most optimistic, with 41 percent saying the world was getting better.) In 2017, a Pew Research Center poll reported that 41 percent of Americans thought that life today was worse than it was 50 years ago, compared to 37 percent who thought it was better.

In 2021, The Lancet published a poll of 10,000 young people (ages 16 to 25) in 10 countries (Australia, Brazil, Finland, France, India, Nigeria, Philippines, Portugal, the U.K., and the USA) asking how they felt about climate change that found pervasive pessimism about the future. About 75 percent reported that “they think the future is frightening,” with more than 55 percent agreeing that “humanity is doomed” and 39 percent saying they are “hesitant to have children.” About 45 percent responded that “their feelings about climate change negatively affected their daily life and functioning.” A YouGov poll in 2022 found more than 30 percent of American adults thinking climate change will lead to extinction of the human race.

In 2023, 76 percent of Americans in an NBC survey were “not confident that life for our children’s generation will be better than it has been for us.” That same year, a Wall Street Journal poll similarly reported that 78 percent of Americans believe that life for their children will not be better than it was for themselves. A November poll by the European Council on Foreign Relations found only 24 percent of Americans were optimistic about their country’s future. These are the headwinds that the emerging progress movement is combating.

The Optimistic Opposition

There is a division of labor between the pro-progress groups. The Roots of Progress is focused on creating a new philosophy of progress and promoting young intellectuals who propound it. In an essay outlining what that might look like, Crawford argues for “a renewed vision of the future” that accelerates technological progress to provide humanity with cheap, abundant, clean fusion energy, permanent settlements in space, and cures for diseases and even aging itself using advanced biotech. “A future where we don’t just end poverty, but create new levels of wealth so fantastic that they make today’s wealth look like poverty in comparison—just as was done over the last two hundred years,” he writes.

“We are going to need a large body of intellectuals, of writers, creatives, educators, and journalists,” says Crawford. To develop this cadre, the group has created a fellowship program as “a career accelerator for progress intellectuals.” There were over 500 applicants for the first cohort, of which 19 were selected. The selected fellows analyze how to remove the regulatory roadblocks that stymie infrastructure and clean nuclear power deployment, how to incentivize countries to welcome more immigration, and how to overcome pervasive risk aversion in awarding research grants.

The Institute for Progress (IFP), co-founded by Caleb Watney and Alec Stapp, focuses on finding public policy ideas that can boost innovation sooner rather than later. “Because of the unique position of the United States, we have a moral call to really take the lead and embrace our role as the world’s R&D lab,” argues Watney. The U.S., he notes, has particular advantages when it comes to scientific and technological progress: the concentration of the world’s top universities, the fact that the world’s top scientific minds want to immigrate here, a huge and dynamic economy that enables the rapid iteration and prototyping of new technologies.

“The Institute for Progress is not an organization focused on mass politics,” Watney adds. “We are not going to get people to hold up banners saying, ‘I want total factor productivity growth to be higher.'” Instead, it’s “a very incrementalist organization” that looks “for issues that are important. If you were to change them, would they really matter? Are they tractable? Does it seem like you could actually move the needle on them in a useful way in, say, the next five years?” Among other activities, IFP researchers engage in such nitty-gritty work as filing detailed comments on federal agency proposals. For example, the IFP recently advised the Biomedical Advanced Research and Development Authority on how to hasten the development of more effective coronavirus vaccines. Also, the IFP signed an agreement last year to partner with the National Science Foundation to help the agency develop faster mechanisms for funding high-risk, high-reward research proposals.

Meanwhile, Works in Progress publishes long-form case studies on how entrepreneurs, inventors, researchers, and others have successfully made progress in fixing various problems. It also prints proposals for how to ameliorate those still unresolved. Among the topics covered in recent articles: overcoming obstacles to tapping geothermal energy, upzoning in New Zealand to address housing shortages, how advance market commitments could have spurred the development of an effective malaria vaccine more quickly, and—in an article by Reason‘s own Peter Suderman—how mixologists surmounted the problem of boring drinks.

The Progress Network—based at New America, a liberal-leaning think tank—aims to bring together an ideologically diverse set of pro-progress scholars and pundits. Its founder, money manager Zachary Karabell, says he’s aiming to “create a cohort of people who are united by a sensibility, but certainly not united by a monolithic view of what’s working and what isn’t.” Its cohort of associates includes the Cato Institute’s Mustafa Akyol, MIT economist Erik Brynjolfsson, George Mason University economist Tyler Cowen, Harvard psychologist Steven Pinker, journalist Matthew Yglesias, Columbia University linguist (and New York Times columnist) John McWhorter, Depolarization Project CEO Alison Goldsworthy, and Pritzker Innovation Fund chief Rachel Pritzker. Other Network members include the founders of both The Roots of Progress and the Institute for Progress. Karabell ruefully acknowledges that it is hard to get the independent “idea entrepreneurs” he has recruited into the Progress Network to collaborate. For now, the Network has assembled 120 or so members whose voices make the constructive point that the world, on the whole, is getting better. The Network highlights stories detailing the actuality of progress “from around the world that get kind of buried under the avalanche of negative stories” through its What Could Go Right? podcast, a daily newsletter, and social media.

The heads of all four organizations cite the animating influence of the July 2019 Atlantic article “We Need a New Science of Progress,” written by Cowen and Patrick Collison, the billionaire founder of the internet payments company Stripe. “The success of Progress Studies will come from its ability to identify effective progress-increasing interventions and the extent to which they are adopted by universities, funding agencies, philanthropists, entrepreneurs, policy makers, and other institutions,” Cowen and Collison argued. “In that sense, Progress Studies is closer to medicine than biology: The goal is to treat, not merely to understand.”

Cowen and Collison are involved in the movements in other ways too. Both The Roots of Progress and Works in Progress have received grants from the Emergent Ventures project, administered by Cowen. Works in Progress became part of Stripe Press in 2022.

How Progress Got a Bad Reputation

Why did progress fall out of favor? Crawford suggests the strong belief in economic, technological, and social improvement that characterized 19th century Europe and America was dented by the next century’s bloody world wars. “People before World War I had hoped that technology and economic growth would actually lead to an end to war and that we were entering a new era of world peace,” he says. “That proved to be disastrously wrong. Not only had technology not led to an end to war, it had actually made war all the more horrible and destructive. It had given us the machine gun, chemical weapons, the atomic bomb.”

Crawford also notes the 20th century saw the emergence of institutions featuring “top-down control by a technical elite.” This, he argues, prompted “a countercultural idea that saw progress as linked to this authoritarianism and rejected both.”

Watney points to the negative externalities that have accompanied technological development and economic growth—air and water pollution, climate change, deforestation—and suggests these have contributed to the disillusionment with progress as well. On top of that, he says, a spirit of complacency and safetyism has emerged in rich developed countries, adding new roadblocks.

“We have become the victims of our success, to a certain extent,” Watney argues. “As you get increasing levels of wealth and productivity, you’re more inclined to keep hold of the safety and the gains that you already have and less likely to risk a little bit to gain a lot more.” Or as Karabell puts it, “If you’re more worried about the unknown negative consequences than you’re excited about unknown positive consequences, you’re basically going to be sclerotic and not do anything.”

You should not confuse this appreciation for past progress with a belief that progress is complete. Karabell stresses that he doesn’t believe “we should just shut up and recognize” everything that’s going right. It’s just that “we are demonstrably able to create problems and we’re demonstrably able to solve them.”

Crawford thinks progress has slowed in recent decades. Two big reasons for the slowdown, he argues, are “the growth of the regulatory state” and “the centralization and bureaucratization of research, and in particular the funding of research.” Both impose unnecessarily constraining limits on scientific freedom and the types of opportunities and inventions that can be pursued.

“It’s totally fair to be frustrated with a lot of the excesses of the regulatory state,” says Watney. More hopefully, he adds: “If you’re so pessimistic about the current state, that means there should be lots of low-hanging fruit. Small changes could actually lead to really large increases.”

The IFP’s chief aim is to pick that low-hanging fruit by cutting down the overburden of regulation and reforming the stodgy processes that encrust science funding. So the group is working to streamline the National Environmental Policy Act so that it no longer blocks for years the building of critically needed infrastructure: roads, pipelines, electrical lines, and nuclear, renewable, and geothermal energy projects. The institute also wants to speed up the approval processes at the Food and Drug Administration and the Nuclear Regulatory Commission—in the first case to get new treatments to patients more quickly, and in the second to deploy modern nuclear reactors faster. It is pushing to reform the science funding programs at the National Institutes of Health (NIH) and the National Science Foundation. For example, researchers associated with the IFP note that NIH peer review grant evaluations now tend to focus on the probability that research proposals will achieve their primary outcomes. Thus this evaluation process generally steers funding away from high-risk, high-reward research. One IFP proposal to overcome this conservative bias is to have peer reviewers first assess how valuable the new cures and treatments stemming from the proposed research would be should it prove successful in developing new fundamental knowledge.

Trying To Make It Better

All these projects direct people’s attention to Gapminder, Human Progress, Our World in Data, and other efforts that comprehensively document how much progress is still being made today. These changes include increasing average life expectancy, cutting extreme poverty, reducing childhood mortality, increasing wealth, supplying greater access to education, and empowering women’s rights.

Yet merely pointing out the facts of progress isn’t enough to persuade a lot of folks. It would be great, says Karabell, if it worked just to tell people, “You should all just read the data and change your views.” But it usually doesn’t.

So another theme that unites these four efforts is their embrace of narrative as a way to restore cultural faith in progress. “You can’t throw facts in the face of people’s emotions, or at least you’ve got to be very careful about how you do that,” says Karabell. “You can’t tell people that they should feel better just because the data tells them they should.” Crawford agrees: “Narratives have a lot of power and they have more power than charts and graphs.”

Saloni Dattani of Works in Progress explains, “One of the reasons that we started Works in Progress was we wanted to allow people to really go deep into some area that they were interested in and make a stronger case and longer case for something that they thought could improve the world or something that they thought was a challenge.” Examples include a recent long article, “Watt lies beneath,” that details how advances in geothermal energy could provide humanity with essentially unlimited supplies of clean energy, and the short video “Gentle Density: Brooklyn” describing how Brooklyn, New York, evolved into the second-most-densely populated county in the U.S.

As another example, Zurich-based Roots of Progress Fellow Alex Telford suggests over at his Liveware newsletter on Substack that the static concepts of health and disease are barriers to progress toward perfecting precision medicine aimed at maintaining bodily homeostasis. In her co-authored Salt Lake Tribune op-ed, “We should pay farmers to save the Great Salt Lake,” Roots of Progress fellow Jennifer Morales explains how water markets can stop that body of water from drying up.

Karabell continues: “How one writes that story about the future is part and parcel of shaping that future. If you begin with ‘We’re fucked,’ it’s really hard to solve your problems because you’re basically convinced that you can’t.”

These proponents of progress do not think that they will change the world overnight. “You have to create a critical mass,” says Karabell, “and ideas take a long time to have an effect on society. But things do change, cultural attitudes do change.” Dattani describes herself as an “impatient optimist.”

“Pessimism is more arrogant than optimism,” Karabell concludes. “Optimism is simply that we know for a fact that we are capable of solving problems. Pessimism is the conviction that we are not. The future isn’t worse unless people stop trying to make it better.”

This article was published at Reason on 4/6/2024.

Blog Post | Economic Growth

Measuring Freedom and Flourishing | Podcast Highlights

Chelsea Follett interviews Leandro Prados de la Escosura about the long term trends in wellbeing, inequality, and freedom.

Listen to the podcast or read the full transcript here.

Let’s discuss your latest book, Human Development and the Path to Freedom.

I have spent many years working on economic performance in the long run, and while I don’t have anything against GDP, I was always uneasy with the idea of using GDP per head as a shortcut for wellbeing. GDP is a good indicator of output but a very deficient indicator of wellbeing.

Most economists say, “This is true, but it’s highly correlated with non-economic dimensions of wellbeing.” There is also a tendency to produce a dashboard of indicators, basically GDP and some additional measures that create a more nuanced picture.

I was unhappy with that. Then I realized that, since the beginning of modern national accounts in the 1950s, there have been attempts to produce alternative measures. More than 30 years ago, the United Nations Development Programme produced the Human Development Index. I was very interested, but at the same time, I was frustrated when I saw that countries with no freedom at all ranked very highly in the index.

For example, in the first report in 1990, they had a retrospect going back to 1975, and I found that Spain, under Franco’s dictatorship, ranked very highly in human development. How come? It wasn’t satisfactory to rank a nasty dictatorship so highly. And then I read the literature accompanying the report and found this very candid assertion: “The purpose of human development is to increase people’s range of choices. If they are not free to make those choices, the entire process becomes a mockery.”

This is an important philosophical point: Human development is not just about living longer or having a higher material standard of living. You can get that in a high-security prison in Norway. Choosing between alternative ways of life is what makes the difference.

To make a long story short, they have tried time and again to introduce freedom, but they never managed to do so because of strong political opposition from country members of the program. So, as an independent scholar, I thought, “Look, nobody is going to read it, but I have the freedom to introduce the freedom dimension.”

Tell me about what you found.

Perhaps what makes sense is to compare what I found to what you would get on the basis of per capita income. If you look at the average increase from 1870 to 2020, the growth in income and wellbeing is very similar.

But if you look closer, you realize there are large differences across different periods. During first globalization before 1913 and between 1970 and 2000, they are relatively close. During the last two decades, the difference is huge in favor of material living standards measured by per capita income. The first part of the 20th century is just the opposite.

What next? Well, try to provide an explanation.

I went in two steps. One was asking, “Why has this growth in human wellbeing happened? What is the intuition?” The intuition is that if you get richer, you’re going to become better fed, healthier, better educated, and freer. But you can also have different levels of wellbeing at the same income level, and the most important finding from a historical perspective is that at any point of income, you have higher wellbeing today than in the past.

If you compare 1870 to 1913, you see that for most of the income levels, you get the same association between health and income, but at high levels of income, you get higher levels of health. Improvements in health techniques and medical knowledge were restricted to the most advanced countries. But if you look at the 1950s, at any income level, you get higher levels of health than in 1913 or 1870. You also find this for education and freedom. If you move to 2000, there is another upward shift.

Of course, there are reversals. There have been four moments in time in which the progression, the positive progression of human development stopped or declined. One was the Great Depression. The second one was during Mao’s Great Leap Forward. Then there were the oil shocks in the early ’70s, but the most damaging one has been COVID. COVID is the first period in which wellbeing measured in terms of augmented human development has declined

However, over the long run, for any income level, whether you are rich or poor, nowadays you have higher wellbeing than in the past.

Those findings are fascinating. What would you say is the biggest implication of your work?

The first thing is that wellbeing, broadly defined, has expanded worldwide more steadily than per capita income.

Secondly, the phases in which we conventionally associate improvements in wellbeing are not necessarily the same as those in which actual wellbeing improved. For instance, there was an important improvement in the so-called interwar period, even though economic growth stagnated. In 20th-century India, before independence, there was a stagnation in real average income but a remarkable improvement in health. This was because of the discovery of the germ theory of disease, which brought simple hygienic practices like washing your hands before eating and not sleeping near animals.

We also tend to forget that the association between wellbeing and income is not fixed. There are movements along the function: if you are richer, other things being equal, you’re going to be healthier, more educated, and freer. But this is not the whole story. There are also upward and downward shifts.

For instance, you could say that in terms of freedom in 2020, we are worse off than we were 20 years ago. This doesn’t mean that people were richer 20 years ago—we’re richer now—but at the same income level, 20 years ago, people were freer than we are today.

So, it’s a nuanced picture. Overall, things are improving, but there are also worrying declines in freedom.

Exactly.

Can you talk about inequality?

In 1870, in the case of wellbeing, inequality was high, and it increased up to the end of the century, then went down. Then, because of World War I, it increased again. But from the late 1920s to the present, with the exception of a reversal because of World War II, there has been a steady decline in inequality of wellbeing.

In the case of per capita income, inequality increased until the end of the 20th century, around 1980, and only began declining after 1990.

Here, I’m referring to relative inequality. If we increase wealth by 10 percent everywhere, inequality in relative terms doesn’t change. Some people are a bit pickier and think, “If my income increases 10 percent and my income is 100, I get 110. If your income is 1000, you now get 1100.” This is absolute inequality.

Relative inequality in per capita income increased until 1980 and has declined since 1990. But absolute inequality in per capita income, the distance between rich and poor, continues growing.

Absolute inequality in wellbeing has declined since 1960. Today, it is similar to what you would find in 1938, 1913, or 1900, but higher than in 1870.

It’s also important to look at what happens to different parts of the distribution. Who are the winners and losers? Broadly speaking, the middle class of the world gained the most, and the lower classes and those at the top won relatively less. If you look at absolute gains, those who were at a higher level of wellbeing got more. But that changes for different dimensions. Those at the bottom, for example, were the main winners in terms of education, while those in the middle were the main winners in terms of health.

I know that your current focus is on freedom. Could you tell me a little bit about that?

I became interested in human development after reading Amartya Sen, who emphasizes what Isaiah Berlin would call positive freedom. Freedom to. But he also emphasizes negative freedom, the absence of coercion and interference. And I think this is interesting because many people think there is a trade-off between negative and positive freedom.

At the end of the day, everybody wants to have negative freedom, but there are those who think negative freedom has nothing to do with income, that would be Hayek, and those who think negative freedom can only be reached as a second stage once you provide for those who don’t have access. For some, positive freedom is a socialist lie to reduce negative freedom. For others, they are two faces of the same coin.

As an economic historian, I find this is an interesting topic for research. If you look at the world, and you can see this in the Human Freedom Index that Cato publishes, you see the countries at the top in terms of negative freedom are also at the top in terms of positive freedom. For instance, Denmark is at the top of the list in terms of economic freedom, but also in terms of education and health.

My question was, well, maybe this trade-off is only a short-run phenomenon. Maybe if you look at the long run, the trade-off doesn’t hold or only holds for a certain period. So why not construct two alternative sets of estimates, one for positive freedom and the other for negative freedom? And this is what I’m trying to do now.

My main discrepancy with the Fraser Institute economic freedom index is that I don’t take into account the size of government. I know this is a contentious issue. People say, “the larger the government, the less room for private initiative.” At a point in time, this is true. And if you look at similarly developed countries, this is true.

But if you take a cross-section at a point in time, you can see that there are countries in which the size of government is much, much smaller, that are not necessarily freer, in terms of absence of coercion and interference, than countries with larger governments. Look at, for instance, Latin American and Sub-Saharan African countries. Think of Somalia. Or think of my own country under Franco. It was a right-wing, but, in many aspects, very socialist dictatorship in which the government was everywhere. But the size of government was very small.

In 1980, do you know what percentage the income tax contributed to the revenues of the central government in Spain? Give me a figure. You would say 40 percent?

Sure, 40 percent.

2 percent.

Wow.

Nobody paid income tax. So, there was no redistribution.

My point is that the size of government matters less than the nature of government. Perhaps Denmark would have more economic freedom with a smaller government, but if you compare Denmark to other countries, you can see that even though the Danish government is larger, Denmark’s degree of economic freedom is higher. Why? Because the nature of government action is different. It doesn’t interfere as much as another government that is less intrusive in quantitative terms but more intrusive in qualitative terms.

So, if you are looking at a point in time, it makes sense to say, “mutatis mutandis, if a rich country nowadays has a smaller government, this country is going to be freer.” That is true. But the action of government varies from one case to another.

Get Leandro Prados de la Escosura’s book, Human Development and the Path to Freedom: 1870 to the Present, here.