Filed under: Australia, Canada, Capitalism, Economics, Economy, Energy, Europe, Free Markets, Freedom, History, The United States, Unemployment, United Kingdom | Tags: A 19-Fold Increase in Living Standards, Economist Dierdre Mc Closkey, Real Per-Capita Growth
From Economist Dierdre McCloskey:
In the countries that most enthusiastically embraced capitalism, some two hundred years ago, real per-capita economic growth has increased by 1.5 percent annually. Owing to the miracle of compound interest, this increase has meant a 19-fold increase in living standards over the past two centuries, which, she contends, is a “change in the human condition” that “ranks with the first domestication of plants and animals and the building of the first towns”…this enormous economic result had a cause that was cultural rather than economic. Humans did not suddenly become more acquisitive or creative. Rather, “when people treat the marketers and inventors as having some dignity and liberty, innovation takes hold.”
The new respectability of bourgeois life, the belief that the creativity of capitalism’s creative destruction more than offsets its destruction, was the decisive attitudinal change that rendered human life in the past two centuries decisively different from what it had been throughout the preceding millennia.
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