2012 Was the Best Year Ever: Channelling Julian Simon

Any good economist should never be pessimistic too long. For evidence that things usually improve over time, it is helpful to consider the work of Julian Simon whose magisterial work, The Ultimate Resource, shows how free-enterprise capitalism can channel human efforts & lead to continual improvement of the human condition.

It seems that the Londom-based Spectator magazine has picked up the optimism bug (“Why 2012 was the best year ever“):

“It may not feel like it, but 2012 has been the greatest year in the history of the world. That sounds like an extravagant claim, but it is borne out by evidence. Never has there been less hunger, less disease or more prosperity. The West remains in the economic doldrums, but most developing countries are charging ahead, and people are being lifted out of poverty at the fastest rate ever recorded. The death toll inflicted by war and natural disasters is also mercifully low. We are living in a golden age.”

Ironically, these positive outcomes are under continuous assault from political forces that act on the premise that they wish to do “good” for other people. Each new regulation or tax imposed for redistribution to expand the welfare state undermines the capacity of individual initiatives to serve the interests of others through voluntary exchange.

So-called progressive (“social democrats”) see productivity as an instrumental tool that allows wealth redistribution to expand government intervention in the name of “fairness” or to achieve some subjective notion of “social justice” that pleases their constituencies. However, they tend to impose regulatory overreach that throw sand into the gears of the economy, supports unionization that may hamper productivity gains, & place higher tax burdens on innovators. Social democrats also tend to promote a fantasy that governments can create risk-free life by imposing regulations on an expanding range of human activities & do so without any attendant long-term costs.

If there was a better understanding of Julian Simon’s insights, there might be room for more optimism for the future.

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