the blessings of capitalism
DESCRIPTION
Data that shows how the free market has blessed the world.TRANSCRIPT
The Blessings of Capitalism
Adapted from the presentation “Christianity & Capitalism” made at Grace Brethren Church in Long Beach, CA on July 5, 2009.
by Eric M. Jackson, author of The PayPal Warswww.ericmjackson.com
The Blessings of Capitalism
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What has Capitalism Produced?(i.e. Where’s the Beef?)
The Blessings of Capitalism
(Source: Angus Maddison, "World Population, GDP and Per Capita GDP, 1-2003 AD," at the Groningen Growth and Development Centre. http://www.ggdc.net/) 3
11500
17001870
19131950
19521954
19561958
19601962
19641966
19681970
19721974
19761978
19801982
19841986
19881990
19921994
19961998
20002002
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
Total World Economic Output (in Trillions $)
A.D. 1 A.D. 1000 A.D. 2000
The World Economy is No Longer Stagnant
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(Source: J. Bradford DeLong, “Cornucopia: Increasing Wealth in the Twentieth Century,” Department of Economics, U.C. Berkeley, http://www.j-bradford-delong.net/TCEH/2000/TCEH_2.html) 4
The U.S. Economy is the World’s Largest
The Blessings of Capitalism
(Source: U.S. Patent Office, http://www.uspto.gov/web/offices/ac/ido/oeip/taf/h_counts.htm)
1790 1800 1810 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 20000
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
U.S. Patents Granted
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Knowledge has Exploded
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U.S. Economy Has Created Millions of Jobs
(Source: Bureau of Labor Statistics, February 6, 2009. Available at http://www.ritholtz.com/blog/2009/03/hh-est-survey-differences/)
The Blessings of Capitalism
Poverty and Income Distribution• Capitalism has produced an uneven distribution of
wealth between the rich and poor.
7Lowest Quintile Second Quintile Third Quintile Fourth Quintile Top 5% $-
$25,000
$50,000
$75,000
$100,000
$125,000
$150,000
$175,000
$200,000
U.S. Family Income Limits, 2006
(Source: U.S. Census Bureau, available at http://www.census.gov/hhes/www/income/histinc/f01ar.html)
The Blessings of Capitalism
• But income levels for the lowest quintile (which is not a static group of people) have risen over time.
8(Source: U.S. Census Bureau, available at http://www.census.gov/hhes/www/income/histinc/f01ar.html)
20062004
20022000
19981996
19941992
19901988
19861984
19821980
19781976
19741972
19701968
19661964
19621960
19581956
19541952
19501948
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
Upper Limit for Lowest Quintile
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9(Source: U.S. Depts. of Commerce, HUD, and Energy. Data available at http://www.heritage.org/Research/Welfare/bg2064.cfm)
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(Source:http://www.heritage.org/Research/Welfare/bg2064.cfm)
• Hunger hasn’t been eliminated, but 92.5% of poor U.S. households (and 98% of all households) reported they had "enough food to eat" during the past four months.
The Blessings of Capitalism
The Third World
• “Zero Sum Game” – Is the Developed World’s wealth the cause of the Third World’s poverty?
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• In spite of this, Third World poverty has fallen in recent decades as world GDP and trade have risen.
19701990
0%
5%
10%
15%
20%
25%
30%
35%
40%
World Population Below Absolute Poverty Line
(Source: Jay Richards, Money, Greed, and God, p. 92.)
• Peruvian economist Hernando de Soto says lack of formal property rights impedes capitalism, robs Third World citizens of $9.3 trillion of wealth.
The Blessings of Capitalism
(Sources: Economic freedom scores, The Heritage Foundation, http://www.heritage.org/Index/Ranking.aspx. Food expenditure data, U.S. Dept. of Agriculture, http://www.ers.usda.gov/briefing/cpifoodandexpenditures/data/2004table97.htm.)
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Free Economies = Meeting Basic Needs
30 40 50 60 70 80 90 1000%
10%
20%
30%
40%
50%
60%
f(x) = 2.0907752514644 exp( − 0.0348800897588752 x )R² = 0.473557601499277
Economic Freedom and Availability of Food
Economic Freedom Score (0-100)
% o
f GD
P Sp
ent o
n Fo
od
FreeModerately/Mostly FreeMostly UnfreeRepressed
The Blessings of Capitalism
Economic Growth = Longer Lifespans
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(Source: www.gapminder.org.)
The Blessings of Capitalism
Economic Growth = Longer Lifespans
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(Source: www.gapminder.org.)
The Blessings of Capitalism
Economic Growth = Longer Lifespans
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(Source: www.gapminder.org.)
The Blessings of Capitalism
Economic Growth = Longer Lifespans
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(Source: www.gapminder.org.)
The Blessings of Capitalism
Economic Growth = Longer Lifespans
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(Source: www.gapminder.org.)
The Blessings of Capitalism
The Environment• No economic system is pollution-free.• “Natural resources” change over time.• Some analyses suggest global environmental conditions
are improving—e.g. Index of Leading Environmental Indicators.
• Bottom Line: What is the cost-benefit?
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“Earth got about 0.7 degrees Celsius warmer in the 20th century while it increased its GDP by 1,800%…let’s stipulate that all of the warming was the result of our prosperity and that this warming is in fact indisputably bad (which is hardly obvious). That’s still an amazing bargain. Life expectancies in the United States increased from about 47 years to about 77 years. Literacy, medicine, leisure and even, in many respects, the environment have improved mightily over the course of the 20th century…” – columnist Jonah Goldberg
(Sources: Index of Leading Environmental Indicators, Pacific Research Institute, http://special.pacificresearch.org/pub/sab/enviro/2008/study.html. Jonah Goldberg, “Global Cooling Costs Too Much,” http://article.nationalreview.com/?q=MmJiZDEyYzkxYWE0OWYxMWY4Y2ZjYzI2YmNmOGExMDE=.)
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Key Takeaways• Capitalism isn’t a perfect institution, but it has a
formidable track record across the centuries:– Economic growth– Explosion of knowledge– Income inequality but rising living standards for the
poor– Greater availability of food– Longer life spans – Potential for the third world
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