{"id":1151653,"date":"2019-11-21T13:33:54","date_gmt":"2019-11-21T19:33:54","guid":{"rendered":"https:\/\/dailyreckoning.com\/?p=108360"},"modified":"2019-11-21T13:33:54","modified_gmt":"2019-11-21T19:33:54","slug":"have-we-been-wrong-all-along","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1151653","title":{"rendered":"Have We Been Wrong All Along?"},"content":{"rendered":"

This post Have We Been Wrong All Along?<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

Today we confront a rather distressing possibility \u2014 that this world may be in far better condition than we have previously supposed.<\/p>\n

Details, grim details, to follow.<\/p>\n

But we begin with a diagnosis:<\/p>\n

The stock market is evidently down with a spell of altitude sickness\u2026<\/p>\n

The air at 28,000 proved too thin for the Dow Jones Industrial Average.<\/p>\n

The index has retreated to the 27,800 elevation. There it presently rests, breathes and consolidates.<\/p>\n

Both S&P and Nasdaq have also found sturdier footing beneath recent heights.<\/p>\n

We suspect additional Federal Reserve \u201copen market operations\u201d will fill their lungs for the next assault upon the peaks.<\/p>\n

But to return to today\u2019s question:<\/p>\n

Is this world in far superior condition than we have previously imagined?<\/p>\n

Certainty in an Uncertain World<\/b><\/h2>\n

In our customary telling the world gutters along in steady ruin, botched beyond hope.<\/p>\n

By day, by hour, by minute… it rots down inexorably and unerringly.<\/p>\n

See, for example, the number of riots presently besieging many of the world\u2019s cities. See, for example, the Israelis and Palestinians. See, for example, the economic stagnation that afflicts the globe.<\/p>\n

See \u2014 for example \u2014 United States national debt.<\/p>\n

They may be unpleasant realities, yes.<\/p>\n

But they confirm our distrusting biases.<\/p>\n

They offer us the reassuring warmth of certainty in an uncertain world\u2026 like a crackling fire on an arctic winter night.<\/p>\n

But does the world actually exist in better condition than ever?<\/p>\n

We must consider the possibility. Look first to warfare\u2026<\/p>\n

\u201cThe Most Peaceable Era in Our Species\u2019 Existence\u201d<\/b><\/h2>\n

The percentage of individuals violently slain in prehistoric and stateless societies ranges between 5% and 60%.<\/p>\n

But by 2007 warfare accounted for a vanishing 0.04% of the world\u2019s deaths.<\/p>\n

And the present post-WWII era?<\/p>\n

It is the longest without major power conflict since the Roman Empire.<\/p>\n

Argues Steven Pinker, author of The Better Angels of Our Nature: Why Violence Has Declined:<\/i><\/p>\n

\u201cToday we may be living in the most peaceable era in our species\u2019 existence.\u201d<\/p>\n

Thus he invites you to disbelieve your lying eyes and ears.<\/p>\n

Just so, you say. But what about poverty? Is not much of the world sunk in deepest poverty?<\/p>\n

The facts argue a drastically improving case\u2026<\/p>\n

\u201cExtreme Poverty\u201d Has Never Been Lower<\/b><\/h2>\n

In 1990, nearly 2 billion people wallowed in \u201cextreme poverty,\u201d as defined by the World Bank \u2014 or 36% of humanity.<\/p>\n

Yet by 2015\u2026 that ironically fat figure dropped to a gaunt 10%.<\/p>\n

In all, over 1 billion earthlings have stepped up from extreme poverty since 1990.<\/p>\n

If it is progress you seek, here you are.<\/p>\n

Next we come to a recently hatched economic theory \u2014 the theory of \u201ctime-prices.\u201d<\/p>\n

It is the work of economists Marian Tupy and Gale Pooley.<\/p>\n

Time-prices simply calculate the amount of labor required to purchase commodities and products.<\/p>\n

The \u201cTime-Price\u201d of Commodities Plunged 64.7% Since 1980<\/b><\/h2>\n

Here is what Tupy and Pooley\u2019s researches reveal:<\/p>\n

Time-prices have plunged nearly 65% since 1980.<\/p>\n

That is, the world\u2019s workers have had to slave less and less time to acquire the same wherewithal. In their words:<\/p>\n

\n

We [looked] at 50 foundational commodities covering energy, food, materials and metals. Between 1980 and 2017, the real price of commodities fell by 36% on average\u2026<\/i><\/p>\n

Commodities that took 60 minutes of work to buy in 1980 took only 21 minutes of work to buy in 2017. Put differently, the time-price of commodities fell by 64.7%.<\/i><\/p>\n<\/blockquote>\n

Let us provide a cement example of time-prices\u2026<\/p>\n

How Long Must an Average Blue Collar Work to Pay for Thanksgiving Dinner?<\/b><\/h2>\n

Next Thursday is Thanksgiving Day. How much time must the average blue-collared American slave for this dinner?<\/p>\n

In 1986 this serf toiled 32 minutes to pay for his turkey and all the victualry that attends it.<\/p>\n

And now, in anno Domini<\/i> 2019?<\/p>\n

That same average blue-collared American will put in merely nine minutes of labor to pay for next Thursday\u2019s enormity.<\/p>\n

Nine minutes \u2014 down from 32 in 1986!<\/p>\n

\u201cFuturist\u201d and technologist George Gilder has fallen upon time-price theory with a fearsome zeal\u2026 like a man newly converted to the One True Faith.<\/p>\n

The Bright World Seen Through the Prism of Time-Prices<\/b><\/h2>\n

Subpar growth? Secular stagnation? Negative interest rates and the devil and all today\u2019s bugaboos?<\/p>\n

They vanish into nonexistence when you come at them with the time-price theory, argues Gilder:<\/p>\n

\n

We have simply failed the measure the actual GDP gains, consumer surplus, productivity rises and radical new value created by pervasive high technology\u2026<\/i> Time-prices make perfect sense of all these otherwise enigmatic ideas of \u201cnegative interest rates,\u201d \u201csecular stagnation,\u201d \u201cmonetary black holes,\u201d \u201csub-par rates of growth,\u201d negative yield curves, missed inflation targets and bubbling asset prices\u201d…<\/i><\/p>\n<\/blockquote>\n

What is more:<\/p>\n

\n

The history of time-prices suggests that most of the deflation in free economies is a benign reflection of learning curves and entrepreneurial inventions\u2026<\/i> Time-prices tell us that the global economy is in the midst of a fabulous period of technological innovation.<\/i><\/p>\n<\/blockquote>\n

Zero or negative interest rates, for example, fall to pieces under time-price theory.<\/p>\n

Put on your time-price bifocals, says Gilder. You will then see today\u2019s interest rates are healthily positive:<\/p>\n

\n

Interest rates have been normal when adjusted for plummeting time prices\u2026<\/i> Real interest rates, after all, are calculated by subtracting the rate of inflation from the nominal interest rate. If inflation is negative because learning curves around the world are radically reducing costs and prices, then you have to add the deflation rate to nominal interest\u2026<\/i><\/p>\n

Measured by the number of hours and minutes a blue-collar worker has to spend to buy the 50 commodities most vital for human survival, prices have been dropping at a rate of 3.4% per year. That means, in real terms of hours and minutes rather than dollars and cents, a zero-interest-rate translates into an utterly normal 3.4% rate.<\/i><\/p>\n<\/blockquote>\n

We had better stop here\u2026 lest our cherished theories of doom endure additional battering.<\/p>\n

Regards,<\/p>\n

Brian Maher
\nManaging editor, The Daily Reckoning<\/i><\/p>\n

The post Have We Been Wrong All Along?<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

This post Have We Been Wrong All Along?<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

The World May Be Getting Better…<\/p>\n

The post Have We Been Wrong All Along?<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[366,463],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1151653"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1151653"}],"version-history":[{"count":1,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1151653\/revisions"}],"predecessor-version":[{"id":1151654,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1151653\/revisions\/1151654"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1151653"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1151653"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1151653"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}