Quotation of the Day…

by Don Boudreaux on January 7, 2017

in Health, The Economy, Trade

… is from page 57 of Johan Norberg’s excellent new (2016) book, Progress (footnotes deleted; emphasis and link added):

unknown-2This is the great health story of our time: low prices for a good life.

It is a result of globalization, which makes it easier for countries to use the knowledge and technology that it took generations and vast sums of money to generate.  It is difficult to develop cellular technology, the germ theory of disease or a vaccine against measles, but it is easy to use it once someone else has.  The infrastructure that has been created for trade and communication also makes it easier to transmit ideas, science and technology across borders, in a virtuous cycle.

Interestingly, even though there is a strong relationship between health and wealth, it is difficult to find a relationship between health and recent growth rates.  The economist William Easterly has shown the the correlation between a country’s health indicators and its own growth rate is not as strong as the correlation between its health indicators and global growth.  In this era of globalization, the most important factor behind a country’s success is the success of other countries.

DBx: It’s well past the time that we stop thinking of economies as being defined only, or even mainly, by political jurisdictions – such as, “the” American economy, or “the” Chinese economy – and recognize that the bulk of us on this planet today are part of one vast global economy.

Each government, of course, inflicts its own unique restrictions on the commerce of those over whom it rules.  And these restrictions affect disproportionately the economic activities of those who are are saddled with these restrictions, and are, in turn, a major source of the differences in average living standards across countries.  But today’s degree of global economic interconnectedness is so great that the perspective of economic nationalism is not only economically dangerous and ethically offensive, it is also highly unrealistic.


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