Following this earlier test, here’s another. In this follow-up test there are two alternate scenarios. Which of these two scenarios is better for the great majority of people in the economy – and for everyone in the economy, say, 100 years and more later?
Scenario 1: Jones, using only his own funds and funds voluntarily invested in his enterprise, invents a vaccine that inoculates people successfully against cancer, pneumonia, clogged arteries, hypertension, manic depression, acne, heartburn, and erectile dysfunction. This vaccine, taken only once, lasts a lifetime. It has no ill side-effects. It is made from a rare mineral found only miles beneath the surface of the earth. To produce this vaccine requires annually hundreds of billions of dollars of specialized machinery and supplies, and millions of workers of all skill levels. Yet despite its high cost, it is so valuable to humanity that Jones’s sale of his vaccine causes his net worth to rise from $100,000 to $1,000,000,000,000. And Jones loves his material good fortune. He spends wildly – hundreds of homes, garages full of expensive cars, a private jet for each day of the year, elaborate parties, large warehouses full of clothing, new mattresses and sheets for each and every night of his life, electronic gadgets of every sort; the list of stuff that Jones buys daily is very long indeed. Timing his pattern of lifetime expenditures perfectly, Jones lives elaborately until the moment of his death so that at that moment he spent the last cent of his $1 trillion dollar fortune.
Scenario 2: An unprecedented meteorological event occurs that causes rainwater, for the rest of earth’s history, to contain a chemical ingredient that, when ingested by humans, cures humans completely and forever of cancer, pneumonia, clogged arteries, hypertension, manic depression, acne, heartburn, and erectile dysfunction. This chemical ingredient, when ingested by humans, also successfully inoculates people against all of these ailments. This colorless, tasteless, and odorless chemical has no ill side-effects for humans, for other animals, or for the environment. Nor does this chemical in any way raise the cost of supplying or using water. In short, this costless chemical has zero effects beyond curing people of, and protecting them from, a slew of illnesses and ailments.
Which scenario is better for the economy? Which scenario will generate greater prosperity for humankind? Scenario 1 or scenario 2?