We’ve highlighted Professor Deirdre McCloskey’s concept of trade-tested betterment – the innovation and economic growth resulting from capitalism that has boosted standards of living in developed countries by 3000% in 200 years. Stephen Miller, writing in the Wall Street Journal, tells us a personal tale about betterment over the years to which we can all relate: how cars went from dodgy to dependable, improving consumers’ quality of life in a very direct way.
I take for granted these days that my four-year-old car will get me from A to B without breaking down. Forty years ago, this wasn’t the case. When I drove, I would listen carefully to the car’s many sounds, worried that something was about to go wrong.
This anxiety was reasonable. My first car, purchased in the early 1960s, had an unusual problem: The accelerator pedal sometimes stuck to the floor. I would have to bend down to get it unstuck while keeping one eye on the road. A few years later I bought a new car, but before long its fuel pump began to clog, and the engine would suddenly die. My next car had a very exposed gas tank that, in the event of a rear-end collision, could cause a fiery explosion. The car after that had a bad distributor that caused the engine to sputter in rainy weather. I would have to stop every 50 miles and wipe the distributor dry.
The cars of the 1950s through the 1970s were prone to problems. They had a tendency to overheat when stuck in traffic on hot summer days, and their tires would often go flat. I once got a flat at 1 a.m. on the approach ramp to the Verrazano Bridge between Staten Island and Brooklyn. Fortunately, a police car showed up and I changed the tire without getting killed.
Today, cars are much more reliable. I can’t remember the last time I called roadside assistance. “Getting 100,000 miles out of a car in the 1970s was cause for celebration,” economist Steven Horwitz wrote in a 2015 paper. “Not getting 100,000 miles out of a car today is cause to think you bought a lemon.”
The improvement came because of what Deirdre McCloskey, author of “Bourgeois Equality,” calls “trade-tested betterment.” In countries with strong market economies, companies that develop better products and services usually reap financial rewards—as long as the government doesn’t interfere to protect the existing industry leaders.
Countries that embraced trade-tested betterment after about 1800, Ms. McCloskey writes, were “startlingly more productive, creating ten times, thirty times, a hundred times more goods and services, and to the poorest among us.”
Some people want the government to protect jobs threatened by new technologies, but that’s an old mistake. “The advent of cars did not produce mass unemployment because of insufficient demand for the output of blacksmiths and horse traders,” Ms. McCloskey writes. “Fundamentally, all tools—a blast furnace and a spinning jenny, or for that matter an Acheulean hand ax or a Mycenaean chariot wheel—are ‘robots,’ that is, contrivances that make labor more productive.”
Trade-tested betterment worked not only for cars, but for all the appliances in my house. They are more reliable and sophisticated than those I had 40 years ago, and they use far less energy. The computer this article was written on, a Chromebook, cost me $175 a year ago. My first computer, bought three decades earlier, was more expensive yet did nowhere near as much.
When the government tries to protect jobs, it impedes economic growth and lowers the standard of living for everyone. U.S. policy makers should listen to Ylva Johansson, the Swedish minister for employment and integration, who says: “The jobs disappear, and then we train people for new jobs. We won’t protect jobs. But we will protect workers.”
Mr. Miller is author of “Walking New York: Reflections of American Writers from Walt Whitman to Teju Cole. ”
Photo: iStock/Getty Images
This article first appeared in wsjonline on 14 August, 2014.
Also published on Medium.