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On Thanksgiving

Tomorrow is the U.S.’s Thanksgiving holiday. It is a fine time to reflect on the bounty that the productivity increases brought by capital accumulation and technological improvements have brought to us.

The cost of the ingredients of a Thanksgiving feast for ten are now said to cost an average worker their wages for under 2.25 hours of labor. A 16 pound turkey now costs less than what an average worker earns in an hour.

We live lives of such astonishing wealth that we scarcely notice it. Only a fool would rather be an Emperor in 1600 than a poor person living today. Compared to a king of several centuries ago, poor people in the developed world live in astonishing luxury. In the developed world, we eat fresh vegetables in midwinter, our homes are heated toasty warm in the winter and cooled and dehumidified in the summer, we travel in enormous comfort (no wooden wheeled carriages without shock absorbers for us, and indeed, we can fly to the other side of the world for a quite modest sum of money), our medical care is incomparably better, our beds more comfortable, our entertainment options beyond any ancient potentate’s wildest dreams. This is true even of quite poor people, at least in developed countries.

Whence comes this bounty? It is not because of union organizing, or minimum wage laws, or the triumph of the proletariat over the evil factory owners. Indeed, a few centuries ago, there were few mass production factories to triumph over.

No, the source of this bounty is productivity, and the engines of productivity are deferred consumption being invested in improved infrastructure (that is, capital accumulation), improved technology, and specialization. Thanks to our better means of making things and the sacrifices needed to construct those means, productivity per worker is orders of magnitude higher, and thus there’s more stuff to go around.

Centuries ago, it required something like 750 hours of human labor to produce a simple tunic; today it requires minutes of human labor. Almost no one is capable of truly internalizing this change. The shirt on your back once was a valuable capital good requiring four months of constant labor to produce. Now it’s not even worth repairing if it tears, it’s too inexpensive to replace it. Because of this change in productivity, even quite poor people in developed countries own many sets of clothing.

Centuries ago, there was barely enough food to go around, and often far too little, as a result of which starvation was common. It required constant labor by most of the population to produce enough food. Then, mechanization of agriculture set in, and the production of synthetic fertilizer, and pest control, and improved breeding methods; today, it requires very few people to grow more than enough food for everyone. There is so much food, in fact, that obesity has become a disease of the poor, an unprecedented development in human history.

So it is across the span of consumer goods. The amount of labor it requires to produce enough light to read at night has gone down by orders of magnitude, and the quantity of light produced by an ordinary lightbulb is 100 times greater than that of a candle at a tiny fraction of the price. Many goods didn’t even exist before; in my father’s youth there were no televisions, and now people can buy 4k 130cm flat screens.

We were assured by Marx in his writings that the unavoidable result of capitalism over the long term would be the persistent reduction in the quality of the lives of poor people. This was inevitable because capitalists would be forced to engage in greater and greater extraction of the surplus value of the production of their workers. As with essentially all of Marx’s predictions, this did not come to pass; indeed, the opposite has been true.

Marx’s views were based in an entirely counterfactual set of theories of how the world works. Sadly, even though essentially everything Marx claimed about economies and society has proven false, and although essentially every prediction he made has been falsified, and even though his ideas led to the deaths of at least 100 million people in the 20th century, Marx is still wildly popular with the supposed educated classes of our society. (Indeed, even though Marx’s vicious bigotries were the cause of as much or more horror than those of the fascists, it is still respectable for academics to call themselves Marxists. Calling yourself a Nazi will rightfully cause you to be ejected from polite society, but call yourself a Marxist and you can get tenure. But I digress.)

Sadly, the myriad of capitalists that have kept us fed, warmed, clothed, entertained, and healed are largely forgotten. Like fish forgetting they live in water, we forget most of the time that we owe so much to the market economy we are surrounded by, to the vast number and diversity of producers, bringing to bear astonishing specialization and division of labor, creating an incomprehensible number of goods.

We owe so much to people in the past denying their current wants to carefully invest in the future that they might have more tomorrow. It has been the capital they slowly accumulated for us over centuries that has made us all so comfortable. The resources carefully husbanded by capitalists looking to the future were converted into capital equipment of all sorts, from house insulation to computer networks, from injection molding machines to automated teller machines, from to MRI scanners to torque wrenches.

Ultimately, we owe everything to them, and to the never-ending quest for higher productivity among selfish people desperately trying to out-compete their brethren. To quote Adam Smith:

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.

So tomorrow, when I, as with millions of others sit down to have an unnecessarily large meal with my family, I’ll try to be mindful of how hard the struggle was to move from caves and huts to comfortable modern homes, from bare subsistence to feasts that can acquired by trading less labor than it used to require to make a chair leg, from a world lit and heated only by fire to one where I can sit in shirtsleeves reading comfortably at night while a freezing wind howls outside.

What’s even more amazing is this: if people cease to try to prevent the world from getting better, our descendants may pity those living today for our astonishing poverty, for they may someday be vastly richer than we are.

31 comments to On Thanksgiving

  • Rob Fisher

    Hear hear. Bravo. Happy thanksgiving.

  • Stonyground

    I’ve heard it argued that the richest people in the world a hundred years ago were poorer than most people are today.

    Also, I think that the a availability of cheap energy has played a huge part in our increased prosperity. There are those who are determined to make energy more expensive for very spurious reasons.

  • Perry Metzger (New York, USA)

    As energy is a factor in production, certainly having it become cheaper with time means that the end products become cheaper as well. I’m hopeful that the last 40 years of relatively high energy costs will ultimately prove aberrant, but we’ll see how that goes.

  • George Atkisson

    All very true.

    Marxism is the philosophy of envy and entitlement. How dare anyone else have more than me!!! Equality of Outcome is the new SJW battle cry. Of course, the desired outcome is for everyone to live like Bezos. In reality, everyone is reduced to the level of a Venezuelan peasant.

    The prime example currently in the US is Senator (!) Bernie Sanders demanding that the Walton family be taxed into penury because they’re making billions while paying minimum wage to most employees. The lower prices and vast array of products that Walmart provides have saved their customers billions of dollars. They have made it possible for low and fixed income families to eat daily what people around the world would find unbelievable in quantity and quality.

    Sanders himself has never had a job outside of politics and owns 3 homes. By his own standards he is a taker, deserves none of that, but you can bet he’ll never give any of it away.

  • pete

    Smith was correct about the butcher and the baker. Self-interest is the prime motivator of capitalism.

    That’s why we still have poverty in wealthy capitalist societies where most people live comfortable lives, with people on the streets, food banks and pensioners freezing to death.

    Now that capitalist societies have worked out how to provide more than enough wealth to give everyone a decent standard of living perhaps it is time they became better at sharing out that wealth to avoid the problems I list above.

    Do we really want to live in a world where people can burn to death in a dangerous tower block while other people live in luxury in nearby streets?

  • Nullius in Verba

    “Now that capitalist societies have worked out how to provide more than enough wealth to give everyone a decent standard of living perhaps it is time they became better at sharing out that wealth to avoid the problems I list above.”

    The problem isn’t sharing out the wealth. It’s sharing out the skills and experience needed to earn it.

    The point of paying some people high salaries in jobs where we’ve got a shortage of workers and unfilled jobs is to encourage more people to move into those jobs, to gain the skills needed. Question is, what stops them? That’s the problem we’ve still got to fix.

  • Perry Metzger (New York, USA)

    Now that capitalist societies have worked out how to provide more than enough wealth to give everyone a decent standard of living perhaps it is time they became better at sharing out that wealth to avoid the problems I list above.

    Economic growth in the United States dropped quite significantly after the regulatory regimes of the 1930s were imposed. Economic growth, like all forms of compound interest, is an exponential process, and thus a slight change in rates has a dramatic effect over the long term. The difference in standard of living between Mexico and the US, for example, is a 1% difference in annual economic growth compounded over a century.

    Had economic growth continued in the US at the historic rate, our economy would be several times larger now, meaning the best guess is average people would probably have incomes more like $150,000 than like $50,000. The poor would probably have benefited similarly.

    What you propose is to create more poor people, not to “share the wealth” with the poor, because forced redistribution hurts the current economy, but that’s not the most horrible part. You also are implicitly proposing to doom people in the future to be dramatically less wealthy than they could be, meaning you’re going to doom poor people to be far poorer than they need to be. You literally propose to rob the future to assuage your feelings of guilt at present.

    And for what, might I ask? Almost all literal homelessness in the US at this point (that is, almost all people who sleep rough) is caused by mental illness rather than raw poverty. (We are now fond of calling people who are sleeping in shelters and the like “homeless” but that is not a particularly good term.)

    We also live in a country where actual starvation is so rare that the average clinician will never see an involuntary case in their entire career — that is to say, other than mental illnesses like anorexia, starvation no longer exists in the United States. The situation has become so dire for the hunger advocacy industry that they now have created whole new definitions for conditions like “poor food security” which they define as someone who has to worry that they might involuntarily miss a meal at least once over a 12 month period, a risible thing to be concerned about in a nation where the primary food-related disease of the poor is not hunger but type 2 diabetes.

    I will make a radical statement. In 1970, when almost 7% of the US population still lacked indoor plumbing, there was still such a thing as true poverty in the United States. In 2018, although there are many people who live in conditions I would not wish to live under myself, there are very few who live in conditions that would be recognized as “poverty” by the average person living at any other time in human history, and which certainly would not be recognized as “poverty” by the average person living in a nation like India.

    Regardless, if you truly want to help people with less, there is only one means that will truly work over the long term, and that is to stop interfering with economic growth. We still have some, but there are countries like France where progress has nearly stalled as a result of persistent attempts to “help” people, and there are countries that have done worse still. I recommend the opposite, which is to return to high growth and the possibility of vastly higher incomes for all.

  • Julie near Chicago

    Perry M,

    Thank you much for your excellent, upbeat statement of gratitude, reminding us of the reasons why and the folks to whom we properly feel grateful.

    Happy Thanksgiving to all! :>)))

  • Self-interest is the prime motivator of capitalism. … Do we really want to live in a world where people can burn to death in a dangerous tower block while other people live in luxury in nearby streets? (pete, November 21, 2018 at 9:00 pm)

    No, which is why, soon after it happened, I expressed a wish that the £9 million taxed out of those wealthy neighbours and spent to clad the block into an ever-so-green fire trap had been austerely withheld. If only capitalism had been allowed to do its self-interested stuff, less fettered by a green-virtue-signalling state, think how many of them might be alive today.

  • Flubber

    Do we really want to live in a world where people can burn to death in a dangerous tower block while other people live in luxury in nearby streets?

    This is a moronic statement Pete. A cursory review of the facts would show that it was the addition at extravagant expense of green insulation to Grenfell that was the root cause of the disaster.

    Those people would still be alive if we had less money to throw around at whims and frivolities.

  • Perry Metzger (New York, USA)

    Re: fires in state operated housing, I continue to find it amazing how frequently people blame the behavior of state organs operating frankly socialist infrastructure on “capitalism”.

  • Dyspeptic Curmudgeon

    People need to be reminded:

    Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

    This is known as “bad luck.”
    Robert Heinlein

  • Dom

    Nice post, Perry.

    But don’t forget medical advances. A few years ago I was diagnosed with a rare type of leukemia. My oncologist said, “I used to tell people like you to find a hospice; now I say, take this pill and see me in six months.”

    No side-effects worth fretting over, and now I’m cancer-free.

    Happy thanksgiving, everyone.

  • bobby b

    “Do we really want to live in a world where people can burn to death in a dangerous tower block while other people live in luxury in nearby streets?”

    I wish we didn’t hire idiots who decide to clad buildings in frozen gasoline, but remember that those towers – all towers – are available to house people without the money to pay for their own housing only because capitalism incentivized other people to design and build them.

    Mud huts hardly ever burn down, but I bet most people will still choose towers over them.

  • David Bishop

    Thank you, Perry. A timely reminder of our general prosperity and how it came to be – as well as the importance of often pausing, reflecting and indeed giving thanks.
    A very Happy Thanksgiving to all our US friends.

  • One thing I noted in a post recently is that we have become so rich we’ve forgotten where the basics come from.

    I mentioned farmers, but the same applies to a lot of the rest of the wealth we currently take entirely for granted

  • Johnathan Pearce

    Excellent point about about giving thanks for those who saved in the past and enabled the capital accumulation that made our present prosperity possible.

    Happy Thanksgiving!

  • Stonyground

    “…forgotten where the basics come from.”

    Witness those who like to protest against things like fracking and fossil fuel use in general. All of them surrounded by all the trappings of modern life with no idea of the things that they would no longer have were their protests actually taken seriously.

  • Henry Cybulski

    “But don’t forget medical advances.” I would add modern dentistry (I guess that could be rolled into medical advances.) It sure has improved my quality of life.

  • Clovis Sangrail

    Happy Thanksgiving to all!

    I have a colleague who responds very much like Pete: “OK, if you’re right and capitalism (actually free markets under the rule of law) has had an unprecented positive effect on poverty then one cheer for capitalism and free markets and now let’s abolish them so we can run things properly.”
    It’s all based on the fallacy of the perfectability of man. “This time we can make socialism work because we, the philosopher kings, will be perfect and give everyone exactly what they need and then they too shall become perfect.”

  • Mr Ed

    Perry M,

    Thank you for reminding us of the progress made by humanity despite itself (e.g. my recent post about Sark). What with the accumulation of government debt and ever-expanding government spending, despite all this, and regulations, we progress economically. But we need to progress morally as well, to reject our inner Gollum coveting that which is not ours. Of course, the progress of science and medicine is naught without the capital to apply it, and enough factors have come together to make life rapidly better since the end of WW2.

    So this Thanksgiving, or Christmas, buy a socialist you know a candle, for the future he craves.

  • Perry Metzger (New York, USA)

    It’s all based on the fallacy of the perfectability of man

    It’s also based on the contradictory notions that we’re already more than wealthy enough combined with the simultaneous notion that we’re not wealthy enough. It’s one or the other.

    If poverty is still truly a problem, then we need more wealth, which implies we need economic growth. I’ll note that medical advances are also driven by wealth; the cost of things like MRI machines and genetically engineered drugs like almost all cancer immunotherapies is enormous.

    The problem is many people don’t understand where wealth comes from, just as they no longer understand where food comes from.

  • bobby b

    “So this Thanksgiving, or Christmas, buy a socialist you know a candle, for the future he craves.”

    Better yet, steal his candle. Why should he have one when so many don’t?


    “The problem is many people don’t understand where wealth comes from, just as they no longer understand where food comes from.”

    Continuing a long family tradition, after four days of stealthily trudging through snowy fields and woods and down ditchlines and treelines, we’ll be sitting down to several nice venison tenderloins, eight pheasants, and more than a few ducks, because Thanksgiving reminds us that it’s our own efforts and work and abilities that produce that wealth and food. We’re thankful, not for free food, but for the ability to feed ourselves at no one else’s expense.

    This is in stark contrast to the first Thanksgiving, which, according to the Mises Institute, was “not so much a celebration as it was the last meal of condemned men.” (Interesting article concerning the breakdown of the early socialist efforts in the American colonies, which I know is disputed by some. But, even in Slate’s analysis, socialism doesn’t do well.)

    So, Happy Thanksgiving, Perry, and all others who recognize and value what it represents!

  • Clovis Sangrail


    they no longer understand where food comes from.

    Oh they do. They know that it comes from supermarkets-and they understand that the supermarkets are hoarding it.

  • Fraser Orr

    When people lament how “great” things were in the past and how much we have lost I always say two words:

    Dental Anesthetic.

    My old dentist (who has sadly passed away) had in his waiting room a book of the history of dental practice, explaining how dentistry was done in the past. It always struck me as a very poor marketing choice to have that book there what with already skittish patients, nonetheless, this book really put modern dentistry in perspective for me.

  • RRS

    Perry M.,

    I Join Julie to thank you for that overview; especially for:

    We owe so much to people in the past denying their current wants to carefully invest in the future that they might have more tomorrow. It has been the capital they slowly accumulated for us over centuries that has made us all so comfortable. The resources carefully husbanded by capitalists looking to the future were converted into capital equipment of all sorts, from house insulation to computer networks, from injection molding machines to automated teller machines, from to MRI scanners to torque wrenches.

    [bold added]

    The bold is added to reflect upon a former wide-spread consideration of “Posterity” as much as “for Ourselves.”

    To that overview and your subsequent comments, I throw into the mix of examining the advocations of “Soft Socialism,” that their major “technique” for “new” or “better” redistribution is now taking form as various redistributions of COSTS.

  • Paul Marks

    Excellent post Perry M.

    Although there may (may) have been some slippage in living standards in recent decades with, for example, the explosion in the costs of health coverage (due to the massive increase in government REGULATIONS and SUBSIDY schemes) life is clearly vast better than it once was.

    False claims of decline are nothing new – for example the first paragraph of Pope Leo XIII’s famous Enyclical of 1891 (the basis of modern Catholic “Social Teaching”) contains the claims that the masses have been “impoverished” by capitalism and that “moral degeneracy” as been spread by capitalism – neither of these claims was true, on the contrary both living standards and general moral conduct were LESS bad in 1890 than they had ever been before – yet Pope Leo XIII (who produced no evidence what-so-ever for his claims) was widely believed – and such thinking had already dominated the thought of some Protestants (such as Bismark in Germany).

    It is true that I would much rather visit New York City or New York State 60 years or even 70 years ago. rather than now – but New York is most certainly NOT the world. For most of the world (and indeed for wide areas of the United States) conditions of life are better now than they have even been.

    One must also remember that our problems in the West are due to bad government interventions – the endless government spending (trying to replace Civil Society with the State) and regulations, and the fiat money Credit Bubble financial system. Get rid of all that – and technology (and capitalism) would mean a vast INCREASE in living standards, getting rid of most poverty.

    It is possible to turn these things around – I am reminded of a Governor of South Dakota at the end of the 1930s (name – I can not remember his name) who decided to go against the fashions of his time (which are also the Big Government fashions of our time) and roll back GOVERNMENT SPENDING (as well as taxation), he succeeded.

    It is possible to succeed in rolling back the state – if one really makes the effort.

  • Paul Marks

    Thanks to the wonders of the internet (an example of the sort of technology Perry M. is talking about) my failing memory is helped.

    The Governor of South Dakota I was thinking of was Harlan J. Bushfield – Governor from 1939 to 1943. It is hard to think of South Dakota as a Big Government State – with a State Income Tax and high spending. But it was once – and then Mr Bushfield decided that it should not be.

    When a politician tells you it is “impossible” to roll back statism – please remember this example (remember it better than I did).

  • Paul Marks

    I think the New York situation is special – as is the California situation (California back 70 years ago was perhaps the nicest place on Earth – the people of 1948 would be astonished to learn that in 2018 California, adjusted for the cost of living, has the MOST poverty in the United States).

    There is no logical reason to start major a business, that can be moved, in these areas – their taxes and regulations are extreme (even by modern American standards – which are very bad). But they were NOT always as they are now.

    At the start of the 20th Century the “Empire State” (New York) had a larger economy than many countries (although this was basically ignored by the “educated classes” who were obsessed with the wonders of Imperial Germany and thought that New York State and Pennsylvania were horribly “vulgar”). And the industry of such cities as Buffalo was more advanced than ANYWHERE.

    Today you would have to be insane to start-up a major manufacturing enterprise in New York State – but “there is a awful lot of ruin in a great power” so the State has NOT just vanished.

    Financial services?

    Imagine a “clean slate” – you are setting up something called “a bank”, or a “stock exchange”, where would you NOT put it?

    You would NOT put it in New York City (which has some of the highest taxes and worst regulations in the United States) – but the stock exchange and the banks ARE in New York City, so why?

    They are there because they have always been there – at least since the times when it was a incredibly different place in terms of taxation and regulation, and “there is a awful lot of ruin in a great power”, when a place changes (even horribly changes) it does NOT instantly collapse (something I did NOT understand when I was younger). It actually drags on-and-on – even though (logically) the business enterprises that are there should NOT be there.

    So when will the “tipping point” come? I DO NOT KNOW – but when it comes, things can change very quickly. In 405 AD the Roman Empire appeared to be as big as ever, in 410 the barbarians were sacking the City of Rome itself.

    “Yes, but Paul – the Empire had not really made sense since the “reforms” of Diocletian and he was more than a CENTURY before”.

    I know, I know.

    By the way – anyone who thinks the Romans did not have large scale and advanced industry, go visit the ruins a few miles from the city of Arles.

    Indeed large scale and advanced industry (or rather the collapse of it) may have given the barbarians the advantage.

    In Britain one finds pottery in the EASTEN but not so much the WESTERN side of the island in the key period – this may be because that the Anglo Saxons made their own pottery (at a village level) whereas “the citizens” were used to pottery from large scale Roman factories which were no longer operating.

    This is also true of military tech – the degeneration of Roman military tech (for example the poor quality flat shields and the helmets that look as if they are made for men with square heads – “fulfil the plan” as the Soviet Union would say) is well known – indeed some late Roman soldiers did not even wear the armour and helmets that were handed out (because they were sometimes so bad). But there came a time when the big arms factories (under state ownership since the time of Diocletian) stopped operating (at least in the WESTERN Empire) at all.

    Then the barbarians (who could make their own stuff on a small scale – “Forged in Fire” style) had an advantage of the citizens, who were used to waiting for supplies (supplies that now – no-longer-arrived).

    If (if) the American financial system finally breaks down (and it has not made sense for a very long time indeed) then the “Hill Billy” people will still get-by (some of them still have practical skills – they can farm, and they can MAKE THINGS, although government has done everything it can to UNDERMINE this culture, going right back to “Food Stamps” in 1961). The people of places such as New York City will NOT get-by.

    As for the growing strength of the People’s Republic of China – it has married largely privately owned industry (it is socialist in name only) with a totally ruthless dictatorship bent on unlimited expansion.

    It also has a very strong racial ideology – essentially the domination of the Han over everyone else (on the planet). And a lack of any ethical system that might give its rulers a conscious (although previous great powers ignored their Christian conscious all-too-often – and people-as-people have a conscious they can just train themselves to ignore it).

    Still perhaps the “wind of heaven” will change – after all the PRC tyranny is based upon a vast LIE (the lie that the country is socialist and is building communism – both utterly wild lies) so perhaps the regime will fall and a very different political system will emerge – perhaps one that produces rulers with a moral conscious (which they are NOT trained to ignore), or answerable to ordinary Chinese people with a moral conscious.