“The most important human resource, the only true natural resource, is the human mind.” — John Allison (now Cato Institute president), quoted in Knowledge and Power, by George Gilder
George Gilder, whose new book publishes today, is one of the original pillars of Supply Side economics. As stated by Discovery Institute, which he co-founded, “Mr. Gilder pioneered the formulation of supply-side economics when he served as Chairman of the Lehrman Institute’s Economic Roundtable, as Program Director for the Manhattan Institute….”
He was the living writer most quoted by President Reagan. And he is back with his most brilliant work yet — one of potentially explosive importance if taken to heart by our political and policy thought leaders. It is a radical guide, with surprising insights on almost every page, to the creation of a new era of vibrant prosperity.
After writing his best-selling Wealth and Poverty Gilder most notably spent decades traveling down various rabbit holes into, and thoroughly exploring, technological Wonderlands. He has been an essential guide to the technological cornucopias that immensely enrich our lives. He personally surfed the tech bubble and experienced, very up close and personally, its pop. Gilder is a veteran of the ecstasy and agony of entrepreneurship: a player, not a spectator. Gilder’s Knowledge and Power: the Information Theory of Capitalism and How It Is Revolutionizing our World is his finest work, which is saying a lot.
Gilder — who, full disclosure, many years ago, invested in an ill-fated nanotechnology processes start-up involving this writer and, later, generously blurbed this writer’s small cult classic, The Websters’ Dictionary: How to Use the Web to Transform the World — has returned to the intellectual fray in a very big, quite possibly revolutionary, way. He provides an extraordinary rethinking of economics by way of information theory. In it he brings the argument for capitalism … as a humanitarian, and ecological, force … into the 21st century. In the process he makes trenchant comments on the economic shibboleths of both right and left (with more than glancing blows to both but much more devastation to the doctrines of statism and socialism).
... [Malcolm] Gladwell presents a list of the 75 richest people in history.
The vast majority of those who came of age during this period did not become plutocrats. But many people prospered. The neo-Keynesian narrative that the gold standard is synonymous with austerity is just wrong. Forbes.com columnist Nathan Lewis has written, “The Correlation Between the Gold Standard And Stupendous Growth Is Clear.”
Lewis observes that GDP growth between 1870 and 1912 was 682%. It was perhaps the greatest epoch of broad-based prosperity recorded in human history. It yielded many successes, both extraordinary and ordinary. It was an era of a rising tide lifting all boats. One hopes our officials will choose, soon, to replicate the formula. This correlation between gold and wide social prospering suggests that there may be an extraordinary implication to Gladwell’s thesis about extraordinary opportunity.
Libertarianism, thanks, among other factors, to the emergence of leading presidential candidate Sen. Rand Paul, is coming to the fore. It is presenting itself in fresh, less eccentric, and increasingly attractive ways. Moderate libertarianism may be capturing the fancy of an overtaxed, fed-up-with-debt-fueled grandiose government, war-weary, live-and-let-live, Republican base and American people.
Time Magazine recently featured Sen. Rand Paul as one of the 100 most influential people in the world. He was not just on the list. Time placed Paul on its cover for the first, though likely not for the last, time.) This may signal the emergence of the Libertarian Moment.
We didn’t arrive into this “Grandiose Government” pickle absolutely positively overnight. Sen. Paul and others seek to lead us on the path out and to safety. It will make their job easier if we better understood how we ended up in this gutter in the first place.
The road toward serfdom was a long and winding one. How did the American government transform from our servant to master? Where did it get the resources to move from a small, frugal, lighthouse-keeping cluster of agencies to its status of world-record “Hey Big Spender” which, with federal 2013 projected outlays of $3.8T, spends more than the entire GDPs of every nation other than the U.S. itself, China, and Japan?
In modern times the role of money has been almost totally perverted by the commentariat. Though money’s sole purpose is as a measure that facilitates the exchange of actual wealth (your bread for my wine), the desire to get something for nothing is so great that people actually believe prosperity can be had with the revving up of a printing press.
Back to reality, money is a measure. Simple as that. We produce so that we can consume, and money is the medium with which we do just that. That’s why its stability in value is so important. If you promise to remodel a friend’s kitchen for $10,000 to be paid upon completion in six weeks, what if during that time the dollar plummets in value? If so, you’ve been cheated out of your presumed earnings, and you might be out of business.
Conversely, imagine the cinema owner who offers $10,000 for a lobby remodel? What if the dollar triples in value upon completion of same? The cinema owner may similarly go out of business for owing greatly appreciated dollars.
It bears repeating yet again that money is solely a measure. When we come home from work we exchange our labor for the food, clothing, cars, and apartments that we don’t make. The more productive we are, the more our labor buys; money the medium that measures the value of our labor while serving as a facilitator of exchange for that which we want. To simplify what is very simple, when we produce we’re demanding cars, food and clothing, and since money buys all three, when we produce we’re demanding money.
The gold price fell, dramatically, and now is bobbing about. Meanwhile, the prospects for implementing a 21st century gold standard continues to rise. Dramatically.
In a recent media monetary policy media slugfest between The New York Times and The Atlantic, on one side, and Bloomberg.com and Forbes.com on the other, analyzed here, recently, the gold standard prevailed. It is noteworthy that gold’s victory in that skirmish came in a larger context.
The gold standard used to be consigned, mainly (to borrow a perfectly turned description from the Wall Street Journal’s Gregory Zuckerman and Carolyn Cui) to those with “bleak economic outlooks or dystopian views of society.” Then, many of gold’s proponents could be dismissed, facilely if not quite fairly. The gold standard had been frozen out of elite discourse.
No longer. The discourse has changed.
Whether one supports it or opposes it, the gold standard no longer is seen by most serious thinkers as fringe. It no longer is dismissible merely by invoking shibboleths like “barbarous relic” or “cross of gold.” Facts are stubborn things, as John Adams once observed. Facts are much more stubborn than mere mockery.