In my column for the January 13th, 2010, edition of the Pittsburgh Tribune-Review I wrote about what I call modernity’s “prosperity pool” – vast prosperity consisting of the accumulation of countless tiny drops of economic improvement. (Coincidentally, Art Carden last week, in a column he wrote for AIER, linked to a 2016 piece that I’d written on the prosperity pool.)
You can read my column beneath the fold.
The Prosperity Pool
The countless daily improvements in the quality and range of goods and services available on the market are impressive. I reflected on these improvements recently as my 12-year-old son and I flew from San Francisco to Washington.
Sitting in coach, we accessed Wi-Fi from my laptop computer from 35,000 feet in the sky! For a mere $10, we were able to check e-mail and surf the Web. (My son also downloaded a couple of episodes of “Star Trek” to watch during the long flight.)
Standing alone, in-flight Wi-Fi might not seem like much. Indeed, it might not actually be much. But it should not be considered as “standing alone.”
Material prosperity is like water contained in a gargantuan swimming pool. The higher the water level, the greater our prosperity. Call it the “prosperity level” in the Prosperity Pool.
And here’s the thing: The Prosperity Pool is filled small drop by small drop. Countless people line the edge of the pool, each dripping in a drop or two of additional “water” — additional prosperity — from time to time.
Just as a single drop of water doesn’t noticeably increase the level of water in a swimming pool, very few single drops of prosperity have any noticeable effect on the prosperity level. Had in-flight Wi-Fi never been invented and supplied, few people would have noticed.
Ditto for almost everything else available on the market — new shades of paint color; improved quality of stereo speakers; better techniques for freezing food; slightly longer-lasting light bulbs; a new fusion cuisine; a more-efficient machine for weaving cotton; improved corkage for wine; better batteries for laptop computers.
The list is practically endless.
Some drops are large, such as the polio vaccine, Henry Ford’s innovation for producing automobiles and the microprocessor. But the great majority of drops are tiny. These tiny drops, though — just like each of the many tiny drops of water in a swimming pool — combine together to produce a wondrous effect. That effect, in the case of the Prosperity Pool, is an enormously high level of material affluence.
Unfortunately, many people want the prosperity level raised noticeably by a few gigantic infusions. Because each of us individually, even large corporations, are small compared to the whole, no one of us can ever realistically hope to raise the prosperity level noticeably. As a result, too many of us believe that we don’t “change the world” by contributing little drops. Each of us individually wants to make a big splash — to make a move that raises the prosperity level in a way that grabs lots of attention.
This desire, although understandable, reflects ignorance of the only proven process of generating genuine, widespread prosperity. That process involves unleashing creative entrepreneurship to search for profit by figuring out ways to better please consumers — a process that results in huge numbers of small drops of prosperity being added to the Prosperity Pool.
This desire to “change the world” also reflects arrogance. After all, what is it but arrogance for a lone individual to fancy that he or she can change this gigantic, complex world of ours — and change it for the better?
Not content to add small drops of prosperity to the Prosperity Pool, arrogant individuals who insist on visibly “changing the world” invariably call upon government, the one institution that can make a big splash.
To make a big splash, government makes unusually large infusions into the Prosperity Pool. Unfortunately, because government officials are directed not by market signals but by political expediencies — and because the nature of market prosperity is for it to grow decentrally and incrementally — the big splashes that government makes typically are the result of giant boulders bureaucratically tossed into the pool.
These boulders often noticeably change the level of the Prosperity Pool — downward.
Giant splashes, after all, are rather wild. Much of the splash ends up outside of the pool, where it evaporates.
But even if the measured level of the Prosperity Pool is higher after the big splash, this higher level might well be due to the fact that a large boulder now rests on the bottom of the pool. The volume of real, honest-to-goodness prosperity in the pool is likely lower.
Of course, the Prosperity Pool isn’t a perfect replica of an actual swimming pool. For example, while one drop of water is largely the same as any other drop of water, in the Prosperity Pool one drop of prosperity (say, in-flight Wi-Fi) differs from any other drop (say, better-tasting frozen pizza).
Nevertheless, understanding that our prosperity is the accumulation of billions upon billions of productive advances, each one not very significant, is an important step toward a better appreciation of the marvels of a market economy.
