In the year 1800, the average wage was, adjusted for inflation, $3 per day.
Much has changed since then.
“In the past 30 years,” Professor Deirdre McCloskey said in a recent Learn Liberty video, “the percentage of people who are that badly off in the world has fallen by half. It’s been halved. Things are going well.”
Today, in America, the average person makes $130 a day. A substantial rise.
“What a transformation!” says Deirdre. “It’s just incredible. We had earned the $3 a day forever. If you want a short economic history, since the beginning of time, it was $3 a day going along like this…”
“And then right here, which is 1800, it goes shhhweet!… it goes up like mad.”
“And there’s this fantastic transformation of the condition of ordinary folks.”
If this massive transformation is true (which it clearly is), it begs the question… why? What exactly happened to enrich the world so quickly?
An old and commonly accepted explanation is, of course, exploitation.
There are riches, so goes the theory, because there are poor people in the world for the rich to take advantage of.
Makes sense, right? Not really. And it’s not true.
“There’s always been exploitation in history and it didn’t cause economic growth. So it can’t be modern exploitation. Nor can it be, to think of a more conservative way of looking at it, investment. It’s not investment. It’s not piling bricks on bricks or B.A.s on B.A.s…”
What is it, then, you ask?
“It’s new ideas,” Deirdre says. “It’s innovation. The fantastic number of changes in machinery… materials… and organization… that caused the shhwweet!”
OK, then. Next question. Why did all of that innovation happen then and not before?
“Two changes in Holland and England,” Deirdre explains. “Both in the 1600s and 1700s. Which was a rise in economic liberty and social honor for inventors, merchants, manufacturers. Before these were desired occupations, then they became honored. And out of that came a tremendous burst of innovation that had been earlier discouraged.”
It might not look like it, but the entire world is going through a similar transformation today. With new types of innovators, merchants, and manufacturers at the helm.
This time, though, it’s digital.
Funny thing is, though, few see it. They are, understandably, too worried about the short term highs and lows to capture the bigger picture.
It’s no wonder we live in a time of unprecedented economic pessimism.
But, nonetheless, as Professor Deirdre pointed out, today’s world is as good a place to live for the average human being than ever before.
And, we believe, it’s only going to get better for everyone.
Admittedly, it will likely get a little worse first, and there’s going to be pain.
But, for you, there are several ways to sidestep the biggest dangers of what’s to come — and even thrive in the midst of it.
Yes, things like the TPP are going to come up. And, if we stand up against them, they will be futile efforts by those in power to keep their power in place.
For individual investors, these happenings will create unique opportunities to turn grubstakes into club steaks.
We’ve mentioned this before…
We’re currently in an age where technological innovation is outpacing the nation state. No matter what the state does, it can’t keep up. It’s too large and unwieldy. And the bigger it gets, it must realize, the harder it’ll fall.
This could be completely catastrophic or revolutionary. We lean toward the latter.
Simply put, power is decentralizing. And just as Renaissance men changed the world by mastering many skills, so too will the Sovereign Individuals by simply becoming masters of their own lives. We’re already seeing it on a small scale with those who are now independent of nations.
Don’t let the doom-and-gloomers blind you from what’s in store for humanity. Look at all that we’ve already accomplished. And then stay focused.
But, at the same time, don’t kid yourself into thinking it’s going to be easy.
And heed the following missive from Philip Saunders on what’s to come when the nation state fails…
And the stateless nations rise for the first time.
From Nation States to Stateless Nations
By Philip Saunders
We’re living in an age of disruption. How deep does the rabbit hole go?
What we’re witnessing is a shift from territorial monopolies on the use of force as a way of ordering civilization, toward a world of borderless civic networks.
Or, in the words of Tom W. Bell, a move from nation states to stateless nations, which extend the dynamics of social networks into areas traditionally monopolized by government.
Digital currencies like bitcoin are already challenging the state’s monopoly on the provision of currency, and it is inevitable that peer-to-peer technology and smart contracts will begin to challenge its monopoly on law and dispute resolution.
This shift reflects the extent to which the internet has already expanded our range of thought and activity. We can easily make friends with people on the other side of the globe who share our interests, we’re now able to buy and sell to anyone anywhere.
We can offer our services on freelance sites like Fiverr and Upwork. All of this is amazing, and unprecedented, and there is more to come. Our social habits and economic opportunities have been transformed, and we’re better because of it. Those who believe that an institution designed in the 17th century is going to be able to adapt to the new world through minor changes in policy rather than fundamental institutional disruption are not processing reality effectively.
It sounds radical. But the truth is that the old-fashioned nation state can’t last forever. It belongs to a particular chapter in human history, and was built for a certain kind of society and economy that no longer exists. Ancient civilizations like Rome and Egypt also aspired to permanence and inevitability, but were swept away by underlying social and economic changes.
The same was true for Feudalism. Magna Carta challenged the overreach of King John and created the beginnings of constitutional monarchy and what we now call human rights.
The Declaration of Independence challenged the overreach of King George III and created in the West what we have today- the liberal democratic state. But that system is now behaving more and more like a creaky anachronism which violates our liberties, creates inequalities, divides our planet and distracts us with petty arguments about the “left/right spectrum”.
To paraphrase Martin Luther King, the arc of history is long, but it bends towards liberty.
Is the liberal democratic state really “the end of history” as Francis Fukuyama once put it? Is this all there is? Or can we create in the 21st century another leap, on the scale of Magna Carta or the Declaration of Independence, into something greater still?
Many believe that the best strategy for dealing with a globalized world is to globalize the state, or make it more democratic, but this is a profound mistake. The problems with Feudalism and the British control of the American colonies were not logistical or administrative, they were moral. What defines a state above all else is its monopoly on violence, and forced participation in a given geographical area.
Stacking layer upon layer of authoritarian control from local to global is simply applying a flawed 17th century style of governance in new ways, without questioning the model itself.
The internet points us to a different way: to a non-territorial, networked, polycentric world of voluntary jurisdictions and open exits. Unlike the present model of geopolitical “tax farms” (as some have quipped), a polycentric legal system would not based on geography, no more than Facebook or Twitter or Google is; but rather voluntary assent, where participants can enter or exit at any time, or remain neutral, regardless of physical location.
A polycentric legal order in which stateless nations compete for adherents would be superior to our current system from a democratic, egalitarian and libertarian standpoint. Instead of different factions and special interests competing for power in a centralized state, via political parties or corporate cronyism, people with different perspectives can exit arrangements with which they disagree and form consensual communities of their own design.
When people are allowed to participate directly and build their world, we will soon see which ideas work better in practice and which ideas don’t work.
Ubitquity, Bitnation, Pax and Swarm are some of the early contenders
The Importance of Exit Rights
This will require a strong commitment by all emerging communities and networks to a civic innovation called Exit Rights- the right to opt-out.
Every time you press the “unsubscribe button” on annoying emails, you are practicing your exit rights on a small scale. On a larger scale, I believe the principle is sound and should be universalized to all forms of human interaction and political arrangements.
The U.S. Constitution is a good illustration of the danger of creating the “perfect system” on paper without allowing for exit rights. The Constitution created a limited government, restricted by the Bill of Rights to a few central duties.
Yet in reality, over the past two-hundred years it has grown into the largest government in history, with the largest military, an endless complex of oppressive regulations and a national debt to the tune of 19 trillion dollars.
Things didn’t turn out as planned, to say the least. And many European nation states are in a similar predicament, or worse. Idealists can create wonderful systems on paper, but these ideals over time are inevitably corrupted by short-termists and power seekers.
Exit rights will protect future generations from systems that become tyrannical.
The freedom of each individual human being to enter or leave a particular political arrangement at any time will be an incentive for future polycentric orders to respect the rights of its citizens, while creating competition between orderies that will drive them toward transparency and excellence.
I believe when this shift happens, there will be resistance, in much the same way that taxi monopolies in Paris and London and New York are fighting the rise of companies like Uber. But in a world where exit rights are cherished, people may still choose to remain legally associated with traditional nations, for emotional or cultural or practical reasons.
The key point is that there ought to be no impediment to people exiting their citizenship of existing nation states and forming new and better communities and parallel jurisdictions.
As with Uber, there are many special interests which rely on the maintenance of these legal monopolies, who will do their utmost to fight such trends.
They need to understand that we are not asking for their permission, and they will be defeated.
In the words of that great anarchist, Bob Dylan, “Come senators, congressmen / Please heed the call / Don’t stand in the doorway / Don’t block up the hall / For he that gets hurt / Will be he who has stalled.”
[Ed. note: This article originally appeared on Medium.com. Stay tuned tomorrow to see how you can thrive in the midst of the death of centralization — from within the most powerful nation there ever was. Talk to you tomorrow…]