Increasing Our Standard of Living
The standard of living we enjoy on a macro level is always tied to hard work. That is the way we’re able to fight against the forces of nature in order to be able to control our environment, food supply, safety, etc.
Historically, as far as I can tell, our standard of livings has always increased based on one of three things happening:
- Creating economic disparity
- Borrowing from another time
- Increasing productivity
As I look at the standard of living I see around me, I see signs of all three. We could not afford much of what we use if it weren’t being created thanks to laborers making cents per day. We live in an economic system that enjoys the benefits of credit transactions that do not yet have a defined future end. We through ingenuity and hard work have created tools that let us do more with less effort.
Creating Economic Disparity
The first of these categories, that of economic disparity, offends me. I can not reflect on it without feeling a bit disgusted. These increases are a zero sum game. The plenty we can see around us comes at the expense of the hard work of another who gets to enjoy less than their share. While there have always been those that enjoyed the fruits of another’s hard work – the scale at which we can do so now is unprecedented. The top 62 people on the planet control as much wealth as the bottom 3.6 Billion. This is really hard to swallow – though I can certainly see how it ended up that way and make arguments for why it would be that way .
Borrowing From Another Time
The second category, borrowing from another time, is something I am hesitant of. We do so today in two primary ways – credit vehicles and resource depletion.
The former is the reason we have economic recessions every 5-8 years and depressions every 75-100. It is also a large part of what fuels governments collapsing, revolutions and wars.
The latter, the use of resources, shows a great lack of respect for future generations. This is a game of trade offs – with many resources, using more now means you will not have any later. Clearing a forest will give you more wood today but will stop the reproduction of the forest, leaving none for the future. Draining the aquifers will cause the ground to collapse so that they can not fill up again. Burning oil frivolously will poison the air.
The third category, increased productivity, is so beautiful. The raw form is brute force, increased productivity through extra work – and even that provides double returns since every bit of energy spent working is not spent consuming.
The refined form of increased productivity is where the exponential gains lie though. To me, efficiency gains smell like utopia. We can travel farther with less energy thanks to the wheels of a bicycle. We can apply more nails with less effort thanks to the nail gun. We can harness the suns energy to heat water more efficiently than growing trees and burning wood thanks to solar water heaters.
Are We Doing It Right?
We have always assumed that the third category was true and the reason that there was success. That people got rich by adding value to the economy through increased productivity. That this was not zero sum.
I’m not certain that is true nor that we even have a good way of measuring whether or not it is. How do we quantify it? Units of work required per standard of living unit. Is that in jiggawatts or kilocalories? Can we even understand the full scope of the system so that we can properly normalize it?
Our ability to utilize the first two methods masks the fact that we might not, in fact, be increasing the third. Do we in fact enjoy a higher standard of living per unit of work put in today than we did 100 years ago? Or do I just enjoy a higher standard of living than my grandfather because I’m riding on the backs of a greater number of people, both poor and from the future?