While on a long road trip, what economic system provided the goods and services I needed, when and where I wanted them?

How is it that services are available on the interstate highway system when and where I need them? Image courtesy of Adobe Stock.

I took a road trip from the Los Angeles area to Williston last week. My wife and I drove there with our son and his family.

A few questions came to mind on the trip

Questions

1. What economic system provides a gas station within a few miles of the point that we decided we wanted to fill up the tank?

With four drivers in the car,  we were planning to drive on through the night. We were too tired to do that so we decided to stop for the night.

2. What economic system provides multiple hotels and motels half an hour down the road from where we changed our mind?

3. Furthermore, when we wanted to stop, what economic system provided motels at multiple price points so we could pick the one that fit our price range and taste?

4. Why is it that the motel we choose included a full breakfast for all of us in the price?

5. Why did the motel even have two upgraded lamps on the night stands each with 2 USB charging points and two electrical outlets on the base of each lamp?

Answers

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Here are lots of reasons you really love capitalism

Do you use an iPhone, Android phone, Kindle, Mac, PC, Netflix, YouTube, Amazon, Spotify, Google, Uber, Lyft, Waze, airbnb, FaceBook, Instagram, or Snapchat? Most of us use many of those.

If you like those services, then you really love capitalism.

Why?

Where do you think all those creative, innovative, successful services and companies came from?

The following video points out that every one of those services came

….from entrepreneurs with great ideas and the freedom to test them in the marketplace.

We call that capitalism.

Now consider some other services.

Video asks if you have recently been to DMV, taken a journey through the TSA security grope line, mailed something at USPS, or tried to reach IRS customer support?

Where do those sluggish, unresponsive services come from?

The government.

Why the difference in service levels between those two groups? Video explains the reason:

One needs to satisfy its customers to survive and grow; one doesn’t

Jared Meyer of the Manhattan Institute goes into more detail, explaining Why You Love Capitalism:

 

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“Magic without wizards”, or, why is your favorite bread on the shelf when you want it?

Consider merely the way that your favorite bread is always available, usually from many bakeries. And at the time you want. The bakery doesn’t know whether you will stop in on your way to work, during lunch, or after having dinner.

How can it be that several bakeries know to have your choice of bread available, whether sourdough loafs, whole wheat biscuits, rye rolls, croissants, or cranberry bagels? How did they know to order enough yeast, oil, and flour? How did they know what mix to bake before the sun came up?

How did the wholesalers know enough to deliver the right amount of flour to all the pizzerias, bakeries, and pastry shops?

How did the farmers know enough to plant the right amount of wheat, oats, barley, and rye last spring to harvest enough this fall to satisfy all those bakers?

Hmm. What could be getting all those people working together to make sure my favorite and your favorite bread is available when you or I want it?

Ponder these and many more questions just in terms of having bread on the shelf in this video, called “It’s a wonderful loaf:”

 

 

The answer of how all that happens is readily available for all who want to find it.

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Why I am so optimistic – 3

The future is so bright we need sunglasses. Image courtesy of DollarPhotoClub.com

The future is so bright we need sunglasses. Image courtesy of DollarPhotoClub.com

The number of people working in manufacturing has been declining for many years. Those job losses will continue at the same time as technology disrupts other industries causing the loss of more jobs.

This is not a new concept. Technological advances have devastated farm employment over the last 150 years.

(Cross-post from my other blog, Nonprofit Update.)

Prof. Thomas Tunstall pondered Where the New Jobs Will Come From. Sub headline on his 11/4/15 article said:

In 2007 iPhone application developers didn’t exist. By 2011 Apple had $15 billion in mobile-app revenues.

Consider the percentage of the population employed in agriculture over time: (more…)

Why I am so optimistic – 2

200 years ago subsistence agriculture was the norm across the planet. Photo courtesy of DollarPhotoClub.com

200 years ago brutal poverty was the norm across the planet. Not so today. Photo courtesy of DollarPhotoClub.com

Previously mentioned when I look at long-term economic trends I am incredibly optimistic. When I look at the headlines this morning or news from the political world, I am very discouraged.

(Cross-post from my other blog, Nonprofit Update.)

To see one illustration of why I am so optimistic for the long-term, check out a column by Glenn Reynolds at USA Today: Actually, things are pretty good / Free markets and free inquiry have changed the historic ‘norms’ of poverty and violence.

Earlier post summarized in one paragraph what caused this radical improvement.

Here are a final two points from the article I’d like to highlight:

Second, it is possible for us collectively to turn back history.

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Why I am so optimistic – 1

200 years ago subsistence agriculture was the norm across the planet. Photo courtesy of DollarPhotoClub.com

200 years ago brutal poverty was the norm across the planet. Not so today. Photo courtesy of DollarPhotoClub.com

When I look at the political news or any news in general I get very pessimistic about our future.

In contrast, when I look at the amazing things happening beyond the headlines in today’s newspaper I feel incredibly optimistic.

Consider that private companies are developing the technology for space exploration. Consider the energy revolution created by hydraulic fracturing and horizontal drilling. Consider radical changes in technology that are making so many things easier, faster, and cheaper. Consider that anyone that wants to do so can publish their own book, distribute their own music, or create a feature movie.

As a tiny illustration, look at my company and pastimes. Technology allows me to run a high quality CPA practice without any staff. In my spare time I am a publisher and journalist. Anyone in Europe or North America or most of Asia could easily do the same and at minimal cost.

(Cross post from my other blog, Nonprofit Update.)

When I look at long-term economic trends I am incredibly optimistic.

For yet one more explanation of why that is the case, consider a column by Glenn Reynolds at USA Today: Actually, things are pretty good / Free markets and free inquiry have changed the historic ‘norms’ of poverty and violence.

Until relatively recently, an illness-filled short life of dirt-eating poverty was the normal condition for practically everybody on the planet. In the last 100 or 200 years life has gotten radically better for practically everyone.

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Everyone everywhere has gotten far richer in the last 200 years. Hmm. I wonder how that happened?

After you celebrate that the average level of income has increased radically in the last 200 years, ponder how that happened.

10/18 – Max Roser – Economic World History in One Chart – Mr. Roser is superb with data visualization. Tweet from Max Roser ‏@MaxCRoser :

  • Economic world history:
  • 1800 Poor & equal
  • 1970 Unequal
  • 2000 Much richer & more equal again.

(Cross-post from my other blog, Outrun Change.)

Click here to see the very cool graph. Keep in mind it is on a logarithm scale, roughly meaning that each marked increment on the horizontal axis is an increase of 50% or 100%.

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Fort Union Trading Post brochure shows the beauty of trade

Photo by James Ulvog.

Photo by James Ulvog.

During our September vacation in North Dakota, we were able to visit Fort Union Trading Post and Fort Buford. Both were a lot of fun to see.

The brochure produced by the National Park Service for the Fort Union Trading Post national historic site 25 miles southwest of Williston has lots of fun comments. I want to focus on the wages at the time and the wonderful beauty of free trade.

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To sort through the question of how to share economic and health progress with everyone, check out a book from the winner of this year’s Nobel award in economics

Cover of Prof. Deaton's book, used under fair use, courtesy of Amazon.com

Cover of Prof. Deaton’s book, used under fair use for this review, courtesy of Amazon.com

Why have we seen such dramatic improvement in average wealth and average life expectancy everywhere in the last 100 or 200 years? What has led to a radical reduction in the number of people living in dirt-eating poverty in the last 50 years?

Over the last few years I have focused a lot of my reading on economics and history trying to figure out the answers to those questions. Why?

If we figure out the answer to those questions we can continue in the same direction. If we sort out how we got here, we can share that strategy with those who have not shared in the progress. If you want a different phrasing, we can radically narrow economic inequality within countries and between countries if we can answer those questions. We can help get even more people out of dirt-eating poverty.

I think those goals are in the back of the mind for most readers of this blog. (Cross posted from my other blog, Nonprofit Update.)

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Is capitalism moral? Yes. A video explanation.

In a free market, the ambition & the voluntary efforts of citizens, NOT the government, drives the economy.

At a fundamental and foundational level, that is an extremely moral system.

As Prof. Walter Williams of George Mason University explains:

 

He says: (more…)

Do you want to help lift another billion people out of dirt eating poverty or do you want to feel good about yourself?

Image courtesy of DollarPhotoClub.com

Image courtesy of DollarPhotoClub.com

Glenn Reynolds at Instapundit on 9/24:

If your goal is to lift people from poverty, capitalism does what nothing else does. So, if that’s your goal, you should support capitalism.

On the other hand, if your goal is to feel good about yourself,  then choose another economic system.

Help people get out of poverty or feel good about yourself – economic policies and positions tend to do one or the other, not both. Which do you choose?

Capitalism undermines feudalism and offers economic freedom to Dalits

Capitalism does a better job providing freedom and equality than any other system. It is a far better option than feudalism.

Capitalism has been allowed to flourish in India since 1991. The results have been to release large numbers of Dalits from bonded labor. Previously those individuals were restricted to the most dirty, dangerous jobs.

Check out the results in this article by Swaminathan S. Ankelsaria Aiyar, writing at Cato Institute: How Capitalism Is Undermining the Indian Caste System.

(Cross-posted from my other blog, Outrun Change.)

Article is reprinted in full under a Creative Commons license granted by the author: (more…)

Which disgustingly rich “robber baron” single-handedly saved all the whales?

Eventually I want to revisit the reputation of those horrid men who built the American economy at the end of the 1900s. They gave us massive breakthroughs in economic development.

Until I can write some extended articles, I’ll accumulate tidbits as I go.

Got to thinking about this when Bruce Oksol of Million Dollar Way pointed out

…that Rockefeller and Standard Oil single-handedly saved the whales from extinction

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In addition to gracious help from Indians, what moved the Pilgrims from starving to thriving?

The first winter for the Pilgrims was terrible. Between starvation, pneumonia, and tuberculosis, about half died.

The second winter was terrible, again with little food. Those who survived the first two winters only did so by the goodness of the Native Americans who graciously shared their food.

The third winter was far better, with plenty of food. In a few years, there was enough abundance that the Pilgrims had paid off their debt to those who financed their trip. They were alive, thriving, and free of debt.

Those are a few highlights of the Pilgrims’ story told by Karl Denninger in his article from 2006, which is reposted at Market-Ticker:  The Truth About Thanksgiving.

What caused the change from starving to thriving is the part of the story I never heard growing up.

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Puritans started with socialism and price controls before they jumped to capitalism

There is a concept loose in the U.S. and emphasized in our educational system that the Puritans arrived in the U.S. believing in capitalism and went straight to economic prosperity.

Well, capitalism will definitely do that, but the Puritans made a few stops before getting to prosperity. Those included socialism, price controls, and severe caps on finance & trade under the guise of opposing usury. All of those policies will suppress economic development.

Jerry Bowyer explores this journey through false ideas is a series of articles, which summarize his interview with Mark Valeri, author of Heavenly Merchandize.

To encourage you to check out the full articles, I’ll try to summarize some key ideas.

7/30 – Forbes – Jerry Bowyer – Puritans vs. Capitalism: How A Theological Error Led To Financial Stagnation – In the 17th century, pastors and religious leaders were opposed to usury which included even discounting letters of credit more than a small amount. If you can’t use paper (bills of credit) to facilitate long-distance trading, there won’t be much trading.

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