Economic growth was not the norm of human existence. People had few economic prospects at the time of Jesus. But in the past two centuries capitalism has changed this.
Income Mobility: Economist Thomas Sowell has pointed out that if you start out your career in the bottom quintile of income, you’re more likely to retire in the top bracket than the lowest.
It’s erroneous to think that wealth isn’t created, but simply transferred from one party to another.
Buying a home in Haiti requires 207 steps…and that’s just to complete the first of five stages. In Haiti, it takes 65 steps to lease land. To buy the land, it can take 19 years. Absolute poverty line is defined as people earning less than $1 per day. World population grew from 3.7 to 5.3 billion during this time.
Most free countries: 1. Hong Kong, 2. Singapore, 3. Australia, 6. USA, 10. UKLeast free countries: 179. North Korea, 178. Zimbabwe, 177. Cuba, 176. Burma, 168. Iran In 1900, four-fifths of the world’s population lived on farms; by the 1970s that was down to one-half. (But in the U.S. only 1.9%.) Source: Jay Richards, Money, Greed, and God, p. 99 Take that, Malthus!!!!
The Blessings Of Capitalism
The Blessings of <br />Capitalism<br />by Eric M. Jackson, author of The PayPal Wars<br />www.ericmjackson.com<br />Adapted from the presentation “Christianity & Capitalism” made <br />at Grace Brethren Church in Long Beach, CA on July 5, 2009.<br />
2<br />What has Capitalism Produced?<br />(i.e. Where’s the Beef?)<br />
3<br />The World Economy is No Longer Stagnant<br />A.D. 1<br />A.D. 1000<br />A.D. 2000<br />(Source: Angus Maddison, "World Population, GDP and Per Capita GDP, 1-2003 AD," at the Groningen Growth and Development Centre. http://www.ggdc.net/)<br />
(Source: J. Bradford DeLong, “Cornucopia: Increasing Wealth in the Twentieth Century,” Department of Economics, U.C. Berkeley, http://www.j-bradford-delong.net/TCEH/2000/TCEH_2.html)<br />4<br />The U.S. Economy is the World’s Largest<br />
(Source: U.S. Patent Office, http://www.uspto.gov/web/offices/ac/ido/oeip/taf/h_counts.htm)<br />5<br />Knowledge has Exploded<br />
6<br />U.S. Economy Has Created Millions of Jobs<br />(Source: Bureau of Labor Statistics, February 6, 2009. Available at http://www.ritholtz.com/blog/2009/03/hh-est-survey-differences/)<br />
Poverty and Income Distribution<br />Capitalism has produced an uneven distribution of wealth between the rich and poor.<br />7<br />(Source: U.S. Census Bureau, available at http://www.census.gov/hhes/www/income/histinc/f01ar.html)<br />
But income levels for the lowest quintile (which is not a static group of people) have risen over time. <br />8<br />(Source: U.S. Census Bureau, available at http://www.census.gov/hhes/www/income/histinc/f01ar.html)<br />
9<br />(Source: U.S. Depts. of Commerce, HUD, and Energy. Data available at http://www.heritage.org/Research/Welfare/bg2064.cfm)<br />
10<br />Hunger hasn’t been eliminated, but 92.5% of poor U.S. households (and 98% of all households) reported they had "enough food to eat" during the past four months.<br />(Source:http://www.heritage.org/Research/Welfare/bg2064.cfm)<br />
The Third World<br />“Zero Sum Game” – Is the Developed World’s wealth the cause of the Third World’s poverty? <br />11<br />
12<br />Peruvian economist Hernando de Soto says lack of formal property rights impedes capitalism, robs Third World citizens of $9.3 trillion of wealth.<br /><ul><li>In spite of this, Third World poverty has fallen in recent decades as world GDP and trade have risen. </li></ul>(Source: Jay Richards, Money, Greed, and God, p. 92.)<br />
The Environment<br />No economic system is pollution-free.<br />“Natural resources” change over time.<br />Some analyses suggest global environmental conditions are improving—e.g. Index of Leading Environmental Indicators.<br />Bottom Line: What is the cost-benefit?<br />19<br />“Earth got about 0.7 degrees Celsius warmer in the 20th century while it increased its GDP by 1,800%…let’s stipulate that all of the warming was the result of our prosperity and that this warming is in fact indisputably bad (which is hardly obvious). That’s still an amazing bargain. Life expectancies in the United States increased from about 47 years to about 77 years. Literacy, medicine, leisure and even, in many respects, the environment have improved mightily over the course of the 20th century…” – columnist Jonah Goldberg<br />(Sources: Index of Leading Environmental Indicators, Pacific Research Institute, http://special.pacificresearch.org/pub/sab/enviro/2008/study.html. Jonah Goldberg, “Global Cooling Costs Too Much,” http://article.nationalreview.com/?q=MmJiZDEyYzkxYWE0OWYxMWY4Y2ZjYzI2YmNmOGExMDE=.)<br />
Key Takeaways<br />Capitalism isn’t a perfect institution, but it has a formidable track record across the centuries:<br />Economic growth<br />Explosion of knowledge<br />Income inequality but rising living standards for the poor<br />Greater availability of food<br />Longer life spans <br />Potential for the third world<br />20<br />