Happiness, thy name is coffee.
In today’s edition of “The Calling,” Steve Horwitz highlights the glory of the Keurig coffee maker, which represents a real step forward for coffee drinkers everywhere that isn’t fully captured by standard measures of well-being like Gross Domestic Product. For more on the same, here’s Jeffrey Tucker’s take on the Keurig from December of last year and my January 2010 discussion of economic progress during the Naughties.
I continue to be amazed by the world in which I live: I can sip gourmet coffee brewed in my Keurig while Boomer, our pet Cylon, cleans the floors. I can communicate with pretty much anyone anywhere in the world through social media. Almost any Sesame Street clip my kids would want to watch is available on the internet at the click of a button. I can find pretty much any cuisine, anywhere with just a few buttons on my phone. Indeed, thanks to my phone I was able to successfully find my way around Milan on foot last fall when I lost my passport and was stuck there for an extra day or two. Jeffrey Tucker is right: It’s a Jetsons World.
Considered in isolation, none of these innovations seem that spectacular. It’s easy to dismiss things like the Keurig as playthings of the relatively well-off that are inconsequential when people are suffering (“let them drink decaf French roast!”) but they illustrate the broader social processes by which a better world emerges. To borrow Donald Boudreaux’s illustration, Keurigs and Roombas and iPhones are drops in the Prosperity Pool. Individually, they may not seem like much but in aggregate they add up to something incredible.
In this video, Chris Coyne explains the difference between “makers” and “takers,” and he notes that the Occupy movement is correct to be outraged that the returns to taking (as opposed to making) are so high. Consider some of the names we associate with massive wealth today, though, like Gates, Bezos, Walton, Page, Brin, Zuckerberg, and Jobs. They didn’t get rich by taxing hapless subjects or by making gilded googaws for the super-wealthy. They got rich by finding better and cheaper ways to bring better and cheaper stuff to the masses. Here is Joseph Schumpeter’s oft-quoted passage from Capitalism, Socialism, and Democracy on “the capitalist achievement:”
There are no doubt some things available to the modern workman that Louis XIV himself would have been delighted to have yet was unable to have–modern dentistry for instance. On the whole, however, a budget on that level had little that really mattered to gain from capitalist achievement. Even speed of traveling may be assumed to have been a minor consideration for so very dignified a gentleman. Electric lighting is no great boon to anyone who has money enough to buy a sufficient number of candles and to pay servants to attend to them. It is the cheap cloth, the cheap cotton and rayon fabric, boots, motorcars, and so on that are the typical achievements of capitalist production, and not as a rule improvements that would mean much to the rich man. Queen Elizabeth owned silk stockings. The capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within the reach of factory girls in return for steadily decreasing amounts of effort.
I reiterate these points here and here.
Modernity does come with a new set of problems, affectionately called “First World Problems,” but as long as voluntary social processes aren’t short-circuited by intervention we can come up with creative ways to fix them. Consider the Keurig again. You can get a little refillable basket for it, and I’ve found that it helps solve a problem for weak-willed coffee drinkers like myself. I try to avoid having too many K-Cups around the house, and the one-cup-at-a-time technology plus the trouble of refilling the little basket raises the marginal cost of cups of coffee and helps me drink less of the stuff when I’m at home.
Again, modern innovations like the Keurig, the iPhone, the Sonicare, and the Roomba might seem trivial in a world where starvation is still all too common, but this misses the big picture. Wealth and poverty aren’t created by shifting the distribution of fixed quantities of resources but by social institutions that create incentives to be makers rather than takers.
Updated 10:33 AM: Last year, Mark Perry compared the prices of goods in the 1964 Sears catalog to the goods available in 2010 (HT: David Youngberg).
Obligatory Disclosure: I received no valuable consideration from the makers of the products mentioned in this post in exchange for mentioning them here.
