by Johan Norberg (Sweden) - [article published on the
Wall Street Journal in 2006] -
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Think for a moment about what this morning would have looked
like if it were 150 years ago. You wouldn't have had electric
light, running water or indoor sanitation. You couldn't have
gone to work by car, bus or train. You couldn't have used
a computer, which performs calculations in seconds that would
take decades with pen and paper. In short, you would probably
not have found this morning very comfortable or enjoyable
-- if you had been alive to experience it. Back then, the
global average for life expectancy was around 30 years.
We tend to take our opportunities for granted, but our ancestors
could not have imagined what we now have. In the last 100
years, we have created more wealth than in the 100,000 years
before that, and not because we work more. To the contrary:
In the last century, work hours have been halved in the Western
world. It is because new ideas have made it possible for us
to work smarter and find easier ways to satisfy our needs
The people we should thank are the innovators and entrepreneurs,
the individuals who see new opportunities and risk exploring
them -- the people who find new markets, create new products,
think out new ways to handle commodities commercially, organize
work in new ways, design new technology or transfer capital
to more productive uses. The entrepreneur is an explorer,
who ventures into uncharted territory and opens up the new
routes along which we will all be travelling soon enough.
Simply to look around is to understand that entrepreneurs
have filled our lives with everyday miracles.
Entrepreneurs are serial problem-solvers who search out inefficiencies
and find more practical ways of connecting possible supply
with potential demand. In that way, they constantly revolutionize
our economy, and have made it possible for average people
today to live longer and healthier lives, with more access
to technology than the kings had in previous generations.
Had this radical improvement of our lives been accomplished
by political leaders and central planning, it would have been
celebrated as humanity's greatest achievement. But that is
not how entrepreneurs are perceived, to say the least. For
a hint of how the popular culture thinks of the innovators,
take a look at any Hollywood film. Chances are that the villain
is either a mad scientist or a greedy businessman. That is
slightly ironic, since we would have neither film technology
without scientists nor a film industry without businessmen.
This is to say nothing of our political culture.
The ingratitude toward those who have given us almost everything
seems strange. But perhaps there is a historical explanation.
Wealth and innovation are recent phenomena. During about 3,999,800
of the perhaps 400 million years that hominians have existed,
life has been a zero-sum game for most people. The invention
of new technology was extremely slow and there was no surplus
to invest, so the average homo habilis or homo erectus didn't
see an increase of wealth during his lifetime. What other
tribes hunted or gathered, you lost. If someone gained, it
was reasonable to be suspicious of him -- because he probably
did it at your expense. Under such circumstances, human nature,
our instincts and our attitudes, developed.
Today we live in a very different world. The system of reward
in the free market is the complete opposite. You don't gain
by stealing from others, but by giving them goods and services
that they want. Our suspicion and our envy, however, remain
the same. What was once a way to avoid being exploited by
brutes, kings and knights now becomes a way of exploiting
those who create new value.
So we are probably not well adapted to understand the modern
economy. Whenever we see wealth we have gotten used to thinking
that someone somewhere else has lost out.
The history of socialism can be interpreted in this light.
Marx said that the wealth of the capitalists came at the expense
of the workers. But even in his lifetime, the average worker
in Britain increased his income threefold. Then Lenin saved
socialism by saying that the original hypothesis might be
wrong, but only because someone else had to pay the price
-- poorer countries that were exploited by trade and investments.
Today, once again, we know that the opposite is true. Since
1950, extreme poverty has been reduced to 20% from 60% in
developing countries. The reduction has been led by the countries
that have the most trade and investment links with us, whereas
those that have been shut out, such as sub-Saharan Africa,
Later, socialists like the economist Robert Heilbroner admitted
that capitalism and trade were superior for creating wealth,
even for developing countries, but stood by the basic conclusion
that someone or something must lose. Heilbroner thought the
environment would. Today most people realize that wealth and
technology give countries both the will and the means to deal
with environmental problems, and that the worst problems are
those in poor nonmarket economies -- the fact that five million
people die every year from unsafe water, for example.
That the anticapitalists' particular concerns have been proven
wrong again and again doesn't help for long, because soon
they find a new excuse to condemn free markets. The latest
variety is Marx on his head: He said that capitalism is bad
because it actually creates poverty and slavery. Today, critics
say that capitalism creates wealth and freedom -- but this
is bad for well-being because we become stressed up, frustrated
by the constant demand to choose, working too hard and consuming
too much to keep up with the Joneses.
Don't expect the critics of capitalism to change their minds
any time soon. As long as they don't believe in the creative
ability of mankind or that the market is a plus-sum game,
they will continue to think that someone, somewhere, is victimized
whenever and wherever we see growth and innovation. Unless
this disparagement of entrepreneurs is tamed, people will
allow government, with its arsenal of taxes and regulations,
to take their place.
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