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Friday Charts: Click here for good news |
In her eviscerating review of Thomas Piketty's Capital, Deirdre McCloskey laments that "for reasons I have never understood, people like to hear that the world is going to hell, and become huffy and scornful when some idiotic optimist intrudes on their pleasure." |
"Pessimism sells," she observes. "Yet pessimism has consistently been a poor guide to the modern economic world." |
It feels like that's never been more true than in the age of the internet, where negativity drives online news consumption. |
Bad news has always gotten the clicks, but Joseph Pulitzer was the first to make it a business model — Pulitzer made his newspaper fortune by buying and then dumbing down the New York World, filling the paper with urgent headlines of murder, crime, scandal and disaster. |
It worked, of course; Pulitzer's paper became wildly popular because it tapped into our evolutionary instinct to pay extra attention to bad news. |
As Daniel Kahneman explains, "organisms that treat threats as more urgent than opportunities have a better chance to survive and reproduce." |
Today's most advanced organisms are no exception: "People don't want to read about how good things are," Morgan Housel says, adding that we're drawn to those who tell us how bad things are: "Optimism sounds like a sales pitch. Pessimism sounds like someone is trying to help you." |
By any reasonable measure, 2024 was the best year ever and our lives are better than ever. |
But people don't appreciate hearing it. |
"Why is it controversial to say things are better than they used to be?" Hannah Ritchie asks. |
"Better than they used to be" is not a high bar, because the truth is that our ancestors lived in a brutal and boring world. |
And yet, people persist in believing that things were better when they were worse. |
There's no guarantee that 2025 will be better than 2024, of course, or that 2026 will be better than 2025 — and our relentless pessimism is doing its best to see that it's not. |
By regarding people who despair as sages, we make their dire predictions more likely to come true. |
How else to explain the renewed popularity of failed experiments like tariffs and statism? |
These are debates that were decisively settled in favor of free trade and free markets decades ago, back when we were far worse off than we are now. |
But that's easy to forget when evolution has hardwired us to be drawn to bad news like moths to a flame. |
I think we should follow McCloskey's lead and be "idiotically optimistic" instead. |
Let's check the charts. |
The economic news has been good: |
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If this were the price chart of a stock, would you short it? Our standard of living, as measured by world GDP per capita, has been a nearly straight line up. |
Directionally correct: |
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One of the greatest economic success stories of recent decades is one of the least appreciated. Poland's per capita GDP has more than tripled since 1990, but a recent survey found that only 29% of Poles think their country is headed in the right direction. |
Poverty is less common: |
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The global poverty rate, measured as the share of the world's population living on less than $2.15 in 2017 dollars, fell to an all-time low of 8.5% in 2024 — down from 38% as recently as 1990. |
India's great escape: |
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The Economist reports that "extreme poverty in India has dropped to negligible levels," citing the most recent data from the World Bank — only 1% of India's households fell below the international poverty line in 2024, down from nearly 50% in 1995. That is such good news, I think it's worth repeating: Nearly half of India lived in extreme poverty as recently as 1995 and now, almost none do. Incredible — especially considering that 40% of India's workforce is still employed on farms. (Note: The World Bank's chart above only goes to 2021.) |
Contra Piketty: |
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The Cato Institute finds that most measures of inequality have rapidly declined in recent decades, with infant mortality and air quality being two unfortunate exceptions. In the case of infant mortality, however, the news is good overall; it's just that the developed world has continued to improve faster than the emerging world. |
Make sure your retirement account is fully funded: |
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United Nations data shows that average life expectancy rose to an all-time high of 73.3 years in 2024 and is expected to keep rising. In the mythologized decade of the 1950s, global life expectancy was less than 50 years. Going further back, the historian Thomas Cahill estimates that in civilization's golden era of Ancient Rome, only 4% of men lived past 50 (and "far fewer" women did). |
Americans are upwardly mobile: |
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Yes, the US middle class has been shrinking — but only because people are getting richer. Mark Perry cites census data showing that the percentage of middle-income households is down because so many of them are now high-income households. Better yet: Low-income households have been moving up to the middle. |
Contra Malthus: |
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Thomas Malthus famously reasoned that agricultural production couldn't possibly keep up with population growth, but the Cato Institute explains that "the more resources we consume, the more we have." It's not just about fold, though: "Humans, especially those living in the countries on the frontier of innovation, create knowledge that allows us to grow our resources well in excess of the resources that we consume." |
Traveling is optimistic: |
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The US government may be turning its back on the world, but Americans are not — a record 21.8% of Americans say they plan to get out and see what the rest of the world is like. |
Sustainability is more affordable: |
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Solar panels have gotten so cheap in Europe that they're being used as garden fences (simply because they're cheaper than regular garden fences). In Spain, the electric grid recently recorded its first weekday of 100% renewable energy. |
Stuff is getting cheaper too: |
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The "time price of goods" — i.e., how many hours of blue collar labor it takes to buy something — has fallen nearly 81% since 1971 (the year the US abandoned the gold standard). The time price of power drills, for example, has fallen 93.8%! The full list includes many other garage and mancave necessities, like an 81% reduction in the cost of a mini-fridge (to keep your beers cold, of course). What a glorious time to be a man in this world. |
Technology spreads quickly: |
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Recent US history shows that when big new things are invented, it's not long before nearly everyone has them. (It's only slightly longer until we start complaining about them.) |
We don't hear enough about these success stories because they tend to happen slowly — "there's no equivalent of Pearl Harbor or 9/11 for good news," as Morgan Housel puts it. |
But the good news adds up over time. |
Vaclav Smil notes, for example, that in 1800 it took 10 minutes of human labor to produce one kilogram of wheat, and in 2021, it took only two seconds. |
A decline of 99.7% in the time price of food is very good news, but it doesn't make for very good headlines, because most of us won't click on it. |
But we don't have to be slaves to our evolutionary instincts — next time you see some good news, give it a read. |
We'll all be better off for it. |
Have a great weekend, optimistic readers. |
— Byron Gilliam |
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Brought to you by: |
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We believe permissionless stablecoins rewire finance itself, so builders can control their own money. We put programmable money directly into the hands of builders who create, not extract. |
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