#4 Why the Growth of Wealth is not Enough
Critics of free market capitalism sometimes highlight its materialistic undertones. “There is more to life than cheap goods,” they say. Their criticism doesn’t quite work, since free markets alone can never make people more or less materialistic.
Nevertheless, concerns over some strands of materialism are well-founded. That is, there is more to life than the growth of wealth.
A progressive economy is one in which total profit exceeds total loss. Profits are made when entrepreneurs transform raw materials into products and services that other people (consumers) value more than said raw materials. In other words, a progressive economy is a world that is being transformed from a less preferred state to a more preferred state.
People prefer a full belly to starvation–so the person who figures out how to mass produce food may sell it to others in large quantities and at low prices. The entrepreneur has learned how to transform the land and other raw ingredients into food—the solution to his fellow citizens’ problem. The entrepreneur’s profits corroborate this win-win dynamic.
When entrepreneurs succeed in this way, they are increasing humanity’s wealth—the set of all physical transformations that we are able to bring about.
Much of wealth consists of knowledge. In the above example, the entrepreneur had to discover not only how to transform land, seeds, water, etc. into digestible calories, but he also had to discover how to do so at scale. The entrepreneur had conjectured a recipe, as all entrepreneurs do.
Not only entrepreneurs, but all people engage in transforming the world. When you think to add a hat to your favorite outfit, you have brought about a new world—one that may be objectively more beautiful. Again, you have discovered a recipe for a new transformation.
But progress cannot merely consist of an endless sequence of discovering new and better recipes, because knowledge of how to transform the world tells us nothing about which transformations we ought to pursue.
For that, we need moral knowledge—knowledge about what to want, and what to strive for.
We may discover a novel recipe for creating energy, but one of the waste products of that recipe might be air pollution. Some people may protest, arguing that the cost of the air pollution is greater than the benefits of the new energy source.
Such a cost-benefit argument is one mode of moral reasoning, which is itself subject to error and improvement via creative conjecture. In other words, it is knowledge.
In general, if wealth is understood as the set of all transformations we may cause, then moral knowledge is knowledge that selects between which transformations we ought to cause, and which we shouldn’t.
It turns out that there is an even deeper connection between wealth and moral knowledge: the growth (or decline) of one aids the growth (or decline) of the other. But that is a story for another newsletter.
In the News
American desire for harsh criminal punishment is declining. Punishment (and reward) only work for programmable entities, which people are not. Rather, we ought to think in terms of the problem (how to decrease crime) and possible solutions (which may or may not include raising the cost of crime via imprisonment). Vengeance can never be a solution, since causing suffering only to mitigate your own suffering merely translates your problem-situation to someone else.
Naval Ravikant interviews David Deutsch about knowledge creation and the human race.
A message for next millennium by Brett Hall.
“Human beings yearn to be free and to control their own lives. School says that normal human wish is illegitimate...” - Brad Matthews.
What We’re Reading
Arrival of the Fittest: Solving Evolution’s Greatest Puzzle, by Andreas Wagner
Why Greatness Cannot Be Planned: The Myth of the Objective, by Kenneth Stanley
The Parasitic Mind: How Infectious Ideas Are Killing Common Sense, by Gad Saad
From the Archives
Sean Carroll interviews physicist Chiara Marletto about constructor theory, a new fundamental branch of physics.
Sam Kuypers and Liberty Fitz-Claridge of the Oxford Karl Popper Society speak with philosopher Joseph Agassi about academic life and his apprenticeship with Karl Popper.
Karl Popper - Uncertain Knowledge. 1988 Interview series with Ernst Gombrich.
Written by Logan Chipkin.
Edited by Arjun Khemani, with suggestions from.
Image by Amaro Koberle.