More from Less: The Surprising Story of How We Learned to Prosper Using Fewer Resources—and What Happens Next

by Andrew McAfee

Any central planner will miss many of the actual innovators or actively try to squelch them to protect the status quo of which the planners themselves are a part.

The impulse to acquisition, pursuit of gain, of money, of the greatest possible amount of money, has in itself nothing to do with capitalism. This impulse exists and has existed among waiters, physicians, coachmen, artists, prostitutes, dishonest officials, soldiers, nobles, crusaders, gamblers, and beggars. One may say that it has been common to all sorts and conditions of men at all times and in all countries of the earth, wherever the objective possibility of it is or has been given. It should be taught in the kindergarten of cultural history that this naïve idea of capitalism must be given up once and for all.

Stigler’s point was twofold: that Smith figured out many things over two centuries ago, and that we keep going over topics he covered, often without adding much (if anything) new.

A lot of the criticisms of capitalism I come across read as if their authors haven’t taken Smith’s ideas into account, much less the more than two centuries of intense debate, refinement, and research that they sparked. That’s a shame.

Capitalism is selfish.

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”

“Nobody but a beggar chooses to depend chiefly upon the benevolence of his fellow-citizens.”

Capitalism is amoral.

“Will somebody buy this?” (or even worse, “Can we convince somebody to buy this?”) is one of a producer’s most frequently asked questions, and it’s bad for society if it’s the only one that gets asked.

Capitalism is not going to host the debate about which of these offerings are to be permitted. That essential debate needs to happen elsewhere in a society. Smith got right the fundamental principle we should apply: “The interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumer.”

The dominant belief among American economists in the decades after World War II was that inequality in capitalist countries would decrease as prosperity spread, but that view is now shifting. Both current trends and newly available historical data indicate that high levels of inequality might well be the norm.

Smith saw that government had a role to play in making sure that competitors don’t become cronies—close friends who collude to all get rich together by simultaneously raising prices.

they’re complaints about perversions of it.

“The member of parliament who supports every proposal for strengthening [a] monopoly, is sure to acquire not only the reputation of understanding trade, but great popularity and influence with an order of men whose numbers and wealth render them of great importance.”

“little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice.” Capitalism will cause great prosperity to blossom, but only in a properly tended garden. Laws

Taxation needs to be done carefully (it needs to be “easy”) because it can (and often does) distort incentives. But it does need to be done; as the US Supreme Court justice Oliver Wendell Holmes Jr. put it, “Taxes are what we pay for civilized society.”

Capitalism is oppression. Perhaps the single most unfair, inaccurate, and ignorant critique of capitalism is that it is bad for the workers who help create it. Karl

Adam Smith realized that capitalism’s greatest virtue was that it improved the lives of not only the elite but also of people born into modest circumstances.

“They who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labor as to be themselves tolerably well fed, clothed, and lodged.”

This is true, but it’s like complaining that a ship doesn’t fly. And just as a transportation system can have both ships and airplanes, a society can have both all of capitalism’s elements and a social safety net.

all such countries have one.

Market fundamentalism describes the belief that capitalism alone is sufficient to ensure well-being of all members of a society, and that social safety nets are wasteful and unnecessary. Or,

Market fundamentalists

Social democrats,

socialism.”

When socialist governments come to power via an election rather than a revolution, the result is “democratic socialism.”

communism.

Market fundamentalism and communism are as different as it’s possible to imagine, but they do have one important thing in common: neither has ever existed in the real world. Countries that adopted Marx’s ideas never reached full communism; they instead remained at socialism (the

The real fault line is right down the center: between social democracy and democratic socialism.

Social is fine. Socialism is a catastrophe.

So free-floating prices in capitalist economies do an important double duty: they provide both information and incentives. Prices fixed by a socialist government do neither of those things. Hayek used this insight to shoot down the idea of socialism in 1977: “I’ve always doubted that the socialists had a leg to stand on intellectually.… Once you begin to understand that prices are an instrument of communication and guidance which embody more information than we directly have, the whole idea that you can bring about the same order… by simple direction falls to the ground.… I think that intellectually there is just nothing left of socialism.” But

but even official statistics put its infant mortality rate higher than that of Syria in 2016.

“The trouble with socialism is that eventually you run out of other people’s money.”

“The capitalist reorganization of production petered out in the developing world, leaving the vast majority of the labor force outside its control. The

While only one in nine people in the United States are self-employed, the proportion in India is nineteen out of twenty. Fewer than one-fifth of workers in Peru are employed [in] private businesses.… In Mexico, about one in three are.”

In the developing world, however, the great majority of the self-employed would love to have a job with a company, but none are available. So people have to try to make a living as solo farmers, merchants, or tradespeople.

“The developing world’s fundamental problem is that capitalism has not reorganized production and employment in the poorest countries and regions, leaving the bulk of the labor force outside its scope of operation.”

This process is accelerating as we move deeper into the Second Machine Age, since computers and their kin are the most powerful tools for dematerialization that we’ve ever seen.

As every Economics 101 student learns, an externality is a cost or a benefit that arises from a transaction, but that does not go to the people directly involved in that transaction. A

So we need another pair of forces to enter the picture. This second pair consists of public awareness and responsive government. As

The second sense of responsive is “responsive to good ideas.” The US federal government put in place a cap-and-trade system, which has worked out extremely well.

In recent years China, despite not being a democracy, has proven to be responsive in all three senses when it comes to air pollution.

The democracy of India, meanwhile, hasn’t been nearly as responsive to its terrible air-pollution problems.

it was not able to take effective action. As the New York Times explained in 2017, “India has never been able to boss around its population like China

The shutdown happened only because the deputy chief minister of Delhi State saw children vomiting out the windows of their school bus.

With most products, demand goes down when prices go up, all other things being equal. But with “Veblen goods,” something very different happens: higher prices cause demand to go up. Such

The scientific consensus about the safety of GMO foods is overwhelming.

GMO crops have been developed to resist viruses and other pests, better withstand drought and heat, require less fertilizer, and so on. They’re a powerful way to continue the Green Revolution, and to continue the recent trend of dematerializing agriculture—of getting larger and larger harvests from smaller and smaller amounts of land, water, fertilizer, and herbicide.

Forbidding GMOs is bad not only for the environment but also for people. This

A key feature of inclusive institutions is that they allow people to keep what they earn or acquire, no matter who they are. As