Monday, April 4, 2016

Time travel and our social welfare

If you could travel through time, would you like to live in the society of 100 years ago?


What if you could be the wealthiest person in the world 100 years ago?  Say John D. Rockefeller or Andrew Carnegie.

I don’t know about you, but my answer would still be NO!

Today, middle class Americans are way better off than the wealthiest a century ago.  A hundred years ago, you couldn’t live in a climate-controlled house, drive a modern car, travel by airplane, watch a flat screen TV or carry a smartphone in your pocket. 

Nor would you have access to quality healthcare.  A hundred years ago, there were no antibiotics, no heart stents, no chemotherapy and no Advil (to say nothing of Xanax, Prozac and Vicodin).

The most commonly used single measure of our national wealth is Gross Domestic Product (GDP).  However, despite the impact on your life of the items listed above, they are not included in GDP. Robert Kennedy asserted that GDP “does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials.  It measures everything, in short, except that which makes life worthwhile…”

We should distinguish between our wealth and our social welfare.  The quality of our lives is certainly affected by our net worth (our wealth).  However, it can be said that the social welfare of our society has a greater effect on our lives than our net worth.  Hence, advances in medicine, transportation, telecommunications and household infrastructure have a greater effect on our well-being. 

And, those advances are the product of the free enterprise system. 
Of late, capitalism is under attack. That outcomes are uneven troubles many here in the U.S. and the world over.  People are marching in the streets…  Wall Street’s excesses are scrutinized…  Higher minimum wages are demanded… 

Our anxieties are heightened by a political season in which it is de rigueur to instill fear in the public.  That’s how you get elected. 

But, I am more aligned with the so-called Oracle of Omaha, Warren Buffet. While acknowledging that income inequality is deep-rooted and needs to be addressed, he is eternally optimistic about our economic prospects.  “For 240 years, it’s been a terrible mistake to bet against America, and now is no time to start,” he avers. 

The roots of our income inequality are rooted in globalization and rapid technology change.  Individuals who are well educated and innovative are more likely to earn the rewards of the 21st Century, he tells us.  

Our response to our current challenges should not be to pull up the bridge over the moat – to close our borders and raise tariffs, for example.  Rather, we should focus on providing equal opportunity, improving education (particularly in poor neighborhoods) and strengthening our social safety net.

And, the only economic system that can generate the wealth do so is capitalism.



  1. John

    I'm going to take you to task on one point, namely pulling the bridge up regarding closing borders and raising tariffs etc.

    Capitalism needs a level playing field to work properly, and these days, we simply don't have one. China has sucked us dry over the past 20 years, and is actually ramping up the process just lately, as they have now discovered how to market their products directly using the Internet and they have their own subsidised mail system. They can ship to any address in the USA cheaper than I can. And worse, no one collects sales tax on the product. How can anyone compete against that and their almost slave labor costs?

    Then there's our gene pool to worry about. There's not much point in improving everyone's lot, only to have disease ridden, genetically flawed immigrants. I refer to many nations where 1st cousin marriages are the norm.

    The Middle and Far East are plagued with both problems and no checks are in place to prevent disease entering the country.

    Capitalism needs some ground rules to operate successfully on a level playing field, and it also needs some compassion. Helping the poor to pull themselves out of the mire should be an honor for the fortunate. The attitude is more often, "Why should I help them? Let them stew!"

    A National Health Service would be a good start.

    1. Sounds like it's time to move back to the UK. :)