Capitalist Secrets: Capitalism Unleashes Limitless Progress
It used to be said by socialist critics that capitalism did not deliver the goods. Well, the 20th century put that notion to rest. Today the criticism we hear is that capitalism delivers the goods—for now. But, we’re warned, it does so in a way that ignores our long-term welfare. We’re using up the earth’s resources and unless the government intervenes to put us on the path to “sustainability,” our standard of living will ultimately suffer.
In fact, what happens in a free market is not “sustainable growth” or “unsustainable growth” but limitless progress.
Instead of mindlessly repeating the same physical actions over and over again, gobbling up a fixed store of resources, enterprising individuals under capitalism constantly find new and better ways to do things. The result is that we are not depleting a fixed store of resources—we’re constantly expanding the resources at our disposal.
It’s noteworthy that not a single “non-renewable” resource has ever run out. Not copper, not coal, not uranium, not iron, not silicon, not oil. In part that’s because the planet is a pretty big place. Although we have been making use of it since the dawn of time, we have barely scratched the surface. But perhaps a more important factor is the process by which we make use of natural resources.
We are constantly finding new materials to use, new uses for old materials, new sources of known materials, new ways to access and exploit these materials, and so on. Human creativity is constantly expanding the amount of natural resources available to serve human life. Although everything in the universe is finite, for all practical purposes, the amount of resources we can potentially make use of is unlimited
We can see how this works if we look at the history of illumination. People used to light their homes with whale oil. Did they stop because they ran out of whales? No. They stopped because a better illuminate came along: kerosene. And did people stop using kerosene because we ran out of oil? No. They stopped because Thomas Edison invented the incandescent light bulb—powered by coal, hydroelectric, or eventually nuclear fission.
That is the pattern we see again and again on a market. A market doesn’t consist of human beings mindlessly using up a fixed store of resources. It is a dynamic process that expands our ability to deal with nature via the use of reason. This is what led the economist Julian Simon to conclude that the ultimate resource is the human mind. So long as we are left free, argued Simon, human thought and ingenuity will ensure that the amount of resources at our disposal will grow rather than shrink. Simon was so confident in this conclusion that he famously bet environmentalist hero Paul Ehrlich that the prices of five metals (chosen by Ehrlich) would fall over the course of the 1980s. Ehrlich took the bet—and lost.
Human creativity and innovation continually improve our ability to exploit the universe’s raw materials, and there is no inherent limit to that process. The only thing that can limit it is coercive restrictions on capitalist freedom.