Hockey Stick Trends

Everything you need to know about the power of economic freedom in 3 charts

From:http://blog.american.com/2012/02/everything-you-need-to-know-about-the-power-of-economic-freedom-in-3-charts/

By James Pethokoukis

February 28, 2012

The West was quite poor heading into the 1700s and then it got richer. A lot richer. Real fast. Its embrace of economic freedom and creative destruction, both legally and culturally—what economist Deirdre McCloskey calls the idea of bourgeois dignity and liberty—led to a rise in real income per head in 2010 prices from about $2-3 a day in 1800 worldwide to over $100 today.
But China didn’t follow the same path. It did not embrace bourgeois dignity and liberty. It did not embrace innovation. As this chart from Gapminder illustrates, China’s per capita income was $986 in 1800 vs. $1,900 for the United States.

And by 1978, U.S. per capita income had skyrocketed to $28,000 (adjusted for inflation), while China was actually a bit worse off at $861. But 1978 was also the year when China began to open up its economy to enterprise and the West.

By 2010, China’s per capita GDP had surged to $8,000 vs $42,000 for the United States.

See, the Great Recession is not the Big Economic Story of our time. McCloskey:

The Big Economic Story of our own times is that the Chinese in 1978 and then the Indians in 1991 adopted liberal ideas in the economy, and came to attribute a dignity and a liberty to the bourgeoisie formerly denied. And then China and India exploded in economic growth. The important moral, therefore, is that in achieving a pretty good life for the mass of humankind, and a chance at a fully human existence, ideas have mattered more than the usual material causes. …
The Big Story of the past two hundred years is the innovation after 1700 or 1800 around the North Sea, and recently in once poor places like Taiwan or Ireland, and most noticeably now in the world’s biggest tyranny and the world’s biggest democracy. It has given many formerly poor and ignorant people the scope to flourish. And contrary to the usual declarations of the economists since Adam Smith or Karl Marx, the Biggest Economic Story was not caused by trade or investment or exploitation. It was caused by ideas. The idea of bourgeois dignity and liberty led to a rise of real income per head in 2010 prices from about $3 a day in 1800 worldwide to over $100 in places that have accepted the Bourgeois Deal and its creative destruction.

And to keep its economic machine humming, says the World Bank, China must further its embrace of free-market capitalism. The United States, too.

Adjusted for Inflation and Increased Vehicle Efficiency, Cost Per Mile is 28% Less Than in 1980

From M. J Perry

 

 

 

 

 

 

 

 

 

 

 

 

Energy Fact of the Day:

Adjusted for inflation, gasoline today is about the same price as in 1980 ($3.58 per gallon in February, see top chart). However, adjusted for both inflation and increased fuel efficiency over time, the costs per mile driven were about 23 cents in 1980 compared to 16-17 cents per mile in February 2012, according to the EIA (see bottom above), or about 28% less today than in 1980.

HT: Robert Kuehl

How Containerization Shaped the Modern World

Fracking Economics

Excellent article on fracking.

Note the economic principles at work.

http://www.nationalreview.com/blogs/print/293086

Also see the explanatory video at:

http://www.voyageroil.com/drilling

Ultra-low-cost products

Walter Williams It Just Ain't So

The U.S. Census Bureau reports that 2011 manufacturing output grew by 11 percent, to nearly $5 trillion. Were our manufacturing sector considered a nation with its own gross domestic product, it would be the world's fourth-richest economy. Manufacturing productivity has doubled since 1987, and manufacturing output has risen by one-half. However, over the past two decades, manufacturing employment has fallen about 25 percent. For some people, that means our manufacturing sector is sick. By that criterion, our agriculture sector shares that "sickness," only worse and for a longer duration.
In 1790, 90 percent of Americans did agricultural work. Agriculture is now in "shambles" because only 2 percent of Americans have farm jobs. In 1970, the telecommunications industry employed 421,000 well-paid switchboard operators. Today "disaster" has hit the telecommunications industry, because there are fewer than 20,000 operators. That's a 95 percent job loss. The spectacular advances that have raised productivity in the telecommunications industry have made it possible for fewer operators to handle tens of billions of calls at a tiny fraction of the 1970 cost.

For the most part, rising worker productivity and advances in technology are the primary causes of reduced employment and higher output in the manufacturing, agriculture and telecommunications industries. My question is whether Congress should outlaw these productivity gains in the name of job creation. It would be easy. Just get rid of those John Deere harvesting machines that do in a day what used to take a thousand men a week, outlaw the robots and automation that eliminated many manufacturing jobs and bring back manually operated PBX telephone switchboards. By the way, if technological advances had not eliminated millions of jobs, where in the world would we have gotten the workers to produce all those goods and services that we now enjoy that weren't even thought of decades ago? The bottom line is that the health of an industry is measured by its output, not by the number of people it employs.


Source:http://jewishworldreview.com/cols/williamns030712.php3