What makes us healthy and wealthy?
“Walter – why do you keep posting this chart?” asked someone yesterday, after I had posted a link to a chart that displays the history of prices for gold and oil. My response to that question was,
To illustrate that, in terms of barrels of oil, gold now buys as much energy as it ever did. However, it is not just that chart that is of interest. The other, related charts are of interest as well. Have a good look at them and understand that in terms of wages per hour, per week or per month, we can now buy considerably more per unit of time worked than we could in the past.
Aside from that, I don’t really “keep posting this chart.” I post it only whenever it is necessary to enlighten someone who does not understand long-term trends for commodities, manufactured goods and for services. More people and innovations are always at work to reduce the cost of living and thereby improve the quality of life in the long run.
That principle is explained very well in a video by Matt Ridley: https://www.youtube.com/watch?v=OLHh9E5ilZ4 titled “When ideas have sex”
This morning I had another look at Matt Ridley’s video, and I will add a few more thoughts.
Time is money, and an important aspect of that is that it is crucial in defining prosperity. As Matt Ridley states in his video, “That is prosperity, the saving of time to satisfy your needs.” (at about 5:51) Make sure to watch that portion of the video long enough to take in how much less of anyone’s time it takes today to purchase an hour of light to read by, compared to what the price for that is — and was for all of us — in hours worked for those who are too poor to be able to afford to buy candles.
The thought to take home from that is not that we must hoard our resources but that, the more people stick their heads together to find better ways of producing items that are needed and will be bought in the market place, the more healthy and wealthy we all become.
What good is it to worry about prosperity? Well, that helps us to understand and appreciate the difference between misery and happiness.
Happiness is when at the end of the pay-period there is still some or a lot of money left in the kitty.
Misery is when at the end of the money there is some or a lot of pay-period left.