Economics for the 21st Century

Article excerpt

Recently I came across the extraordinary writings of the Marquis de Condorcet (1743-94), a mathematician with an amazing gift of prophecy in l'age des lumieres. Robert Malthus (1766-1834) ridiculed Condorcet's optimism in his famous Essay on Population (1798). Today Malthus is well known and Condorcet is forgotten. Yet it is Condorcet who has proven to be far more prescient.

In an essay written over 200 years ago, translated as "The Future Progress of the Mind," Condorcet foresaw the agricultural revolution, gigantic leaps in labor productivity, a reduced work week, the consumer society, a dramatic rise in the average life span, medical breakthroughs, cures for common diseases, and an explosion in the world's population.

Condorcet concluded his essay with a statement that accurately describes the two major forces of the twentieth century-the destructive force of war and crimes against humanity, and the creative force of global free-market capitalism. He wrote eloquently of "the errors, the crimes, the injustices which still pollute the earth," while at the same time celebrating our being "emancipated from its shackles, released from the empire of fate and from that of the enemies of its progress, advancing with a firm and sure step along the path of truth, virtue and happiness!"1

As we enter the year 2000, the public has focused on the history of the twentieth century. Condorcet's essay reflects two characteristics of this incredible period. First, the misery and vicious injustices of the past hundred years, and second, the incredible economic and technological advances during the same time.

The Crimes of the Twentieth Century

Paul Johnson's Modern Times, by far the best twentieth-century history of the world, demonstrates powerfully that this century has been the bloodiest of all world history.2 Here is a breakdown of the carnage:

Economists use a statistic to measure what national output could exist under conditions of full employment, called Potential GDP. Imagine the Potential GDP if the communists, Nazis, and other despots hadn't used government power to commit those hateful crimes against humanity.

Another great French writer, Frederic Bastiat (1801-50), wrote an essay in 1850 on "What Is Seen and What Is Not Seen."3 We do not see the art, literature, inventions, music, books, charity, and good works of the millions who lost their lives in the Soviet gulags, Nazi concentration camps, and Pol Pot's killing fields.

The Economic Miracle of the Twentieth Century

Yet the twentieth century was also the best of times, for those who survived the wars and repression. Millions of Americans, Europeans, and Asians were emancipated from the drudgery of all-day work by miraculous technological advances in telecommunications, agriculture, transportation, energy, and medicine. The best book describing this economic miracle is Stanley Lebergott's Pursuing Happiness: American Consumers in the Twentieth Century (Princeton University Press, 1993). Focusing on trends in food, tobacco and alcohol, clothing, housing, fuel, housework, health, transportation, recreation, and religion, he demonstrates powerfully how "consumers have sought to make an uncertain and often cruel world into a pleasanter and more convenient place. …