8/28/2023 0 Comments Rational optimism book![]() ![]() In Africa, average life expectancy is around 60, while in Asia it is over 70.Ĭhild mortality – a measure of how the weakest members of society are faring – has also fallen, even in absolute terms. The average American lives to almost 80, and the average European even longer. At the end of the 18th century, average life expectancy around the globe was less than 30. It is not only the population size that is growing, but also life expectancy. While the number of people considered poor will fall further, the ranks of the middle class are set to swell to 5.3 billion people by 2030. As the Brookings Institution think tank has concluded, the world recently reached a “tipping point” in September 2018: for the first time, half of the global population are now “rich” or “middle class,” and the other half “vulnerable” or “poor.” Brookings predicts that this trend of declining poverty and a growing middle class will continue. The decline in absolute poverty has been paralleled by the emergence of a “global middle class.” The World Bank defines the “middle class” internationally as comprising those earning between US$ 11 and US$ 110 a day, based on 2011 purchasing power parity. ”There are plenty of reasons for “rational optimism.” Things are often better than we think.” Hans-Jörg Naumer ![]() Without innovation, without technology, many would simply have starved. Today, it is just 10 %, despite the fact that the global population has grown to approximately 7.5 billion. By the early 1980s, the proportion of the world population living in absolute poverty (living on less than US$ 1.90 a day) stood at 45 %. Prior to industrialization, bitter poverty had been the norm for all but a powerful elite. Innovations in agricultural technology not only ensured that more and more people could be fed, but also increased prosperity (income per head). Yet the famines feared by Robert Malthus did not come to pass. At the beginning of the 19th century, the global population exceeded one billion for the first time. Then, with the dawn of industrialization, it began to rise sharply, even exponentially. For centuries, GDP barely changed at all in a measurable way. We can visualize this by looking at the growth in global gross domestic product (GDP) (see chart 2). Kondratiev’s idea inspired Joseph Schumpeter to coin the still commonplace expression, “creative destruction.” Were he alive today, Schumpeter would likely also write about “creative disruption.”įrom the steam engine, the railway and the automobile to information technology, robots and artificial intelligence – groundbreaking innovations have always been the driving force behind changes in working processes and social structures (see chart 1), thereby helping to create the growth of affluence. As long ago as 1926, the Russian economist Nikolai Kondratiev, who would one day be murdered by Stalin, examined the long waves of technological development in his work, “The Long Waves in Economic Life.” Later economists continued the “Kondratiev waves” up to our present day. On the contrary, they are an inherent part of that history. Yet periods of dramatic change are nothing new in the history of industrialization. Disruption – the destruction of the old by the new (and better), driven by technologies based on digitalization and artificial intelligence. “Disruption”: no word better describes the age we live in. ![]() It is only with rational optimism that the search for meaning makes sense (in memory of the great Viktor E Frankl and his work “Man‘s Search for Meaning: The classic tribute to hope from the Holocaust”). This is not just a question of investing wisely it is the only way to defend “the open society” from its enemies (Karl Popper). To understand the modern age, we need to identify the developments that are helping to improve the world around us, particularly in times of technological transformation. While I have long been interested by the observation that the world around us is an improving one, what use would this observation be without figures, dates or facts? Matt Ridley put it in a nutshell for me in his book, “The Rational Optimist: How Prosperity Evolves.” I am also indebted for inspiration to Angus Deaton and his book “The Great Escape: Health, Wealth, and the Origins of Inequality.” This study would not have been possible without Hans Rosling, whose website “Gapminder” allows statistics to speak for themselves and upends our habitual ways of thinking about the world, and Max Roser’s website “.”Īs a behavioral economist, I know that we humans tend to respond to negative news far more strongly than we do to positive news: a survival strategy handed down by our Stone Age hunter-gatherer ancestors. ![]() The title of this publication gives a strong clue: ![]()
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