August 18, 2017
By Chelsea Follett
A new study shows that between 1850 and the present, radical changes in life expectancy, working conditions, real wages, education, and technology created a much more pleasant life for the average Dutch man. Between 1840 and 1950, the total amount of time that the average Dutch man spent working over the course of his life halved, despite an increase in life expectancy. Despite working less, male Dutch workers are much more productive than in the past. As working hours have declined, harmful effects of overwork such as productivity losses due to fatigue or accidents have also decreased. Along with a reduction in working hours, technology and education have allowed for productivity to skyrocket, despite the fact that people spend significantly less time working. Learn more by reading the full study here.

August 18, 2017
By Marian L. Tupy
I have just finished reading Neil Monnery’s new book, Architect of Prosperity: Sir John Cowperthwaite and the Making of Hong Kong. This fascinating account of the rise of Hong Kong as a global economic powerhouse is well written and, as such, easy to read and understand. I’m happy to recommend it wholeheartedly to CapX’s discerning readership.

I first became interested in the story of Hong Kong in the late 1990s. The emotional handover of the colony from the United Kingdom to China, for example, is deeply impressed on my memory. But also, as part of my doctoral research at the University of St Andrews, I read a number of essays about the rise of Hong Kong written by the Nobel Prize-winning economist Milton Friedman. Friedman, an advocate of the free market and small government, believed that individuals, when left unmolested, will strive to improve their lives and those of their families. Prosperity will follow.

His was similar to Adam Smith’s insight:

“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; all the rest being brought about by the natural course of things. All governments which thwart this natural course, which force things into another channel, or which endeavor to arrest the progress of society at a particular point, are unnatural, and to support themselves are obliged to be oppressive and tyrannical.”

No country in modern history has come as close to Smith’s ideal as Hong Kong. The territory that the British Foreign Secretary Viscount Palmerston described as “a barren island with hardly a house upon it” was once very poor. In the immediate aftermath of World War II and Japanese occupation, its per capita income was about a third of that in the United Kingdom.

By the time British colonial rule ended, Hong Kong was 10 per cent richer than the mother country. Last year, the former colony was 37 per cent richer than the UK. It is, therefore, apposite that the man credited with Hong Kong’s success should be a Scottish civil servant, a University of St Andrews alumnus, and a devotee of Adam Smith: Sir John Cowperthwaite.

As Monnery explains, Cowperthwaite was not the first small government advocate to oversee the colony’s economy and finances. A succession of colonial governors and their financial secretaries ran a shoe string government. But, they did so out of financial necessity, rather than deep ideological commitment to small government.

As Financial Secretaries, Geoffrey Fellows (1945-1951) and Arthur Clarke (1951-1961) established a regime of low taxes and budgetary surpluses, and free flow of good and capital. To those foundations, Cowperthwaite (1961-1971) added not only the vigor of his convictions, but also a handpicked successor, Philip Haddon-Cave (1971-1981). By the time Haddon-Cave departed, the success of Hong Kong’s experiment with small government was undeniable not only to the British, but also to the Chinese. Margaret Thatcher embarked on her journey to dismantle British socialism in 1979, while Deng Xiaoping started undoing the damage caused by Chinese communism in 1978.

And that brings me to the most important reason why Cowperthwaite, rather than Fellows and Clarke, deserve to be credited with the rise of Hong Kong. Basically, he was the right man at the right place in the right time – the 1960s. It was all well and good to run a small government when the colony was still poor. By the 1960s, however, the colony was prospering and demands for higher government spending (as a proportion of GDP) were increasing. As an aside, the government’s nominal spending increased each year in tandem with economic growth. To make matters much worse, socialism, be it in its Soviet form (i.e., central planning) or in its more benign British form (state ownership of the commanding heights of the economy) was ascendant.

In fact, just before departing from Hong Kong, Clarke appears to have had a sudden crisis of confidence in the colony’s economic model, noting:

“We have, I think, come to a turning point in our financial history … There seem to be two courses we can follow. We can carry on as we are doing … Or we can do something to plan our economy … Which course should we adopt?”

Mercifully, Cowperthwaite was able to articulate the reasons for staying the course. In his early budget debates, he noted:

“I now come to the more general and far-reaching suggestion made by Mr Barton and Mr Knowles, that is, the need to plan our economic future and in particular, the desirability of a five-year plan. I would like to say a few words about some of the principles involved in the question of planning the overall economic development of the colony.

“I must, I am afraid, begin by expressing my deep-seated dislike and distrust of anything of this sort in Hong Kong. Official opposition to overall economic planning and planning controls has been characterised in a recent editorial as ‘Papa knows best.’ But it is precisely because Papa does not know best that I believe that Government should not presume to tell any businessman or industrialist what he should or should not do, far less what he may or may not do; and no matter how it may be dressed up that is what planning is.”
“An economy can be planned, I will not say how effectively, when there unused resources and a finite, captive, domestic market, that is, when there is a possibility of control of both production and consumption, of both supply and demand. These are not our circumstances; control of these factors lies outside our borders. For us a multiplicity of individual decisions by businessmen and industrialists will still, I am convinced, produce a better and wiser result than a single decision by a Government or by a board with its inevitably limited knowledge of the myriad factors involved, and its inflexibility.
“Over a wide field of our economy it is still the better course to rely on the nineteenth century’s ‘hidden hand’ than to thrust clumsy bureaucratic fingers into its sensitive mechanism. In particular, we cannot afford to damage its mainspring, freedom of competitive enterprise.”

It is not clear whether Cowperthwaite ever read Friedrich Hayek’s 1945 essay, “The Use of Knowledge in Society”, which posits that allocation “of scarce resources requires knowledge dispersed among many people, with no individual or group of experts capable of acquiring it all”, or whether he came to the same conclusions as the Austrian Nobel Prize-winning economist on his own. But, even if he were consciously or sub-consciously influenced by Hayek, it speaks much of Cowperthwaite “the thinker” that he took Hayek’s insights to heart, unlike so many decision-makers around the world, who succumbed to the Siren calls of socialism.

And so it was with considerable amazement that, towards the end of my first year at St Andrews, I discovered Cowperthwaite and I were neighbors. His house on 25 South Street was a few hundred feet away from Deans Court, the University’s post-graduate student residence. I immediately wrote to him and he responded, asking me to come for tea. I spent a wonderful afternoon in his presence and kept in touch with him during my remaining time at St Andrews.

Last time I saw him, he came to the launch of the libertarian student magazine Catallaxy, which my friend, Alex Singleton, and I wrote together. As he took his leave, I saw him walk down Market Street and got a distinct feeling that it would be for the last time. Shortly after I graduated and moved to Washington. A new life and new job took precedence and St Andrews slowly receded down memory lane.

Neil Monnery’s book made those wonderful memories come alive again. His work has immortalized a man to whom so many owe so much. Architect of Prosperity is an economic and intellectual history. Above all, it is a tribute to a principled, self-effacing, consequential and deeply moral man. Monnery deserves our gratitude for writing it.

August 16, 2017
By Marian L. Tupy
Over the last few months, The New York Times has published a number of warm and nostalgic recollections of communism. Authors have opined about the supposed optimism, idealism, and moral authority of communism. Perhaps the most bizarre article so far claimed that women behind the Iron Curtain enjoyed greater sexual satisfaction and more independence than their Western counterparts (except, of course, when it came to freedom of thought, speech, religion, association, or movement).

I would have chosen to commemorate 100 years since the Bolshevik Revolution and the birth of the Soviet Union in a different way. Over 100,000,000 people have died or were killed while building socialism during the course of the 20th century. Call me crazy, but that staggering number of victims of communism seems to me more important than the somewhat dubious claim that Bulgarian comrades enjoyed more orgasms than women in the West. But as one Russian babushka said to another, suum cuique pulchrum est.

I am, however, intrigued by the striking similarities between the Times articles. To the greatest extent possible, they seem to avoid the broader perspective on life under communism (i.e., widespread oppression and economic failure). Instead, they focus on the experiences of individual people, some of whom never lived in communist countries in the first place.

In "When Communism Inspired Americans," the author remembers her socialist parents and the life of the communist sympathizers in 1950s America. In "Thanks to Mom, the Marxist Revolutionary," the author remembers his batty mother, who dragged him from one communist hellhole to another in search of a "real world" experience. In "'Make It So': 'Star Trek' and Its Debt to Revolutionary Socialism," the author quotes Captain Picard, who explains to a cryogenically unfrozen businessman from the 20th century, "People are no longer obsessed with the accumulation of things. We've eliminated hunger, want, the need for possessions. We've grown out of our infancy."

Speaking of hunger and infancy, here are some completely gratuitous eyewitness accounts of parents eating their own children during the man-made famine in Ukraine in the 1930s. Communism may have influenced science fiction writers, but real life in the USSR was no picnic.

"Where did all bread disappear, I do not really know, maybe they have taken it all abroad. The authorities have confiscated it, removed from the villages, loaded grain into the railway coaches and took it away someplace. They have searched the houses, taken away everything to the smallest thing. All the vegetable gardens, all the cellars were raked out and everything was taken away. Wealthy peasants were exiled into Siberia even before Holodomor during the 'collectivization.' Communists came, collected everything....People were laying everywhere as dead flies. The stench was awful. Many of our neighbors and acquaintances from our street died....Some were eating their own children. I would have never been able to eat my child. One of our neighbors came home when her husband, suffering from severe starvation, ate their own baby daughter. This woman went crazy."

One has to wait until "Why Women Had Better Sex Under Socialism," to meet an actual Eastern European. "Consider Ana Durcheva from Bulgaria," the author writes, "who was 65 when I first met her in 2011. Having lived her first 43 years under Communism, she often complained that the new free market hindered Bulgarians' ability to develop healthy amorous relationships. 'Sure, some things were bad during that time, but my life was full of romance.'" Durcheva's daughter, in contrast, works too much, "and when she comes home at night she is too tired to be with her husband."

What are we to make of this? Are we merely to deduce that the life of a young and, apparently, attractive woman behind the Iron Curtain was not completely devoid of pleasure? No. The article is explicit in stating that "communist women enjoyed a degree of self-sufficiency that few Western women could have imagined."

This is unadulterated rubbish. I grew up under communism, and here is what I recall.

First, all communist countries were run by men; female leaders, like Margaret Thatcher and Golda Meir, would have been unthinkable. Women who rose to prominence, like Raisa Gorbachev and Elena Ceausescu, did so purely as appendages of their powerful husbands.

Second, the author concedes that "gender wage disparities and labor segregation persisted, and...the communists never fully reformed domestic patriarchy." I would say so. In a typical Eastern European family, the woman, in addition to having a day job at a factory, was expected to clean the apartment, shop for food, cook dinner, and raise the children. The Western sexual revolution passed the communist bloc by, and ex-communist countries remain much more patriarchal than their Western counterparts to this day.

Third, communist societies were socially uber-conservative. As such, pornography and prostitution were strictly prohibited, divorces were discouraged and divorced people ostracized, and prophylactics and the pill were hard to obtain. (Think about it for one hot second. Why would economies unable to produce enough bread and toilet paper generate a plentiful and regular supply of condoms? This makes no sense!) The reason why we refer to communist countries as "totalitarian" is because the state wanted to control every aspect of human existence. Sexual autonomy was, well, autonomous. Being outside the control of the all-powerful state, it was treated with suspicion and suppressed.

But don't take my word for it. You can still visit a few communist countries, including Cuba and North Korea, and compare the social status and empowerment of their women with those in the West. Had the esteemed editors of the Times done so, they would have, I hope, thought twice about publishing a series of pro-communist excreta.

August 04, 2017
By Chelsea Follett
Heat and Cold Provide Energy Storage Solution

Alphabet INC, the parent company of Google, is pitching the idea of using molten salt and cold liquid to store renewable energy. Existing solutions for energy storage all have disadvantages, including high price tags and low efficiency. The research lab suggests the thermal-energy system in salt could be durable, flexible and cheap. This system functions by converting electrical power from solar panels or wind turbines into thermal energy, which is then divided and stored in tanks of molten salt or cold liquid. The heat and cold can later be used to generate the wind for electricity production. Academics agree that the proposed system is technically viable. If successful, this system would help renewable energy, which is hindered by its instability and a lack of storage options, to become more cost-effective.

Gene-Editing Could Prevent Diabetes

Researchers from the University of Chicago recently made a medical breakthrough in treating diabetes by the new and highly precise gene-editing technique CRISPR (Clustered Regularly Interspaced Short Palindromic Repeats). The research team modified the gene for G1P1, the hormone responsible for stimulating insulin production, to make the hormone’s half-life longer. Then they attached an inducible promoter, which acts as a switch for GLP1 production. The modified gene is inserted into lab-grown skin cells and then transplanted into mice. There have been no significant side effects observed. Although this experiment targets diabetes, such skin transplants could be a potential cure for many diseases associated with genetic defects, such as hemophilia.   

Data Storage Breakthrough Announced

Another technological breakthrough was made in data storage. Sony and IBM just jointly announced “a twenty-fold increase in the areal density of magnetic tape storage.” The demand for high-capacity data storage has sky-rocketed due to recent developments in areas such as the internet of things, big data and cloud computing. Given concerns about cost, resilience, and capacity, magnetic tapes are considered an important archival format. With a combination of technologies from IBM and Sony, the new tapes will be able to hold 330TB of data, and will be commercialized soon.

August 04, 2017
By Chelsea Follett
Researchers in the U.S. just came one step closer to achieving immortality through “cryo-preservation” or the freezing of bodies in the hopes of bringing them back to life at a later time. Although only performed on zebra fish embryos, advances in cryo-preservation succeeded in preserving brains and bodies “in a state of suspended animation” by freezing and reviving individuals at the time of their choice. The main problem of cryo-preservation is the expansion and destruction of cells during the freezing process, and even after adding anti-freeze solution, the large size of certain cells still causes ice crystal formations to appear and damage cell structures. The scientists were able to solve this by adding nano-rods to the anti-freeze solution. This solution allowed rapid warming and cooling to occur, and 10 percent of the embryos survived and continued to grow as normal after being un-frozen. If this technology can be used on humans in the future, people could theoretically live forever, and suspended animation could also make long distance space travel possible.  

A new medical breakthrough could help to eradicate inherited diseases. Researchers were successful in editing the DNA of human embryos to eliminate a heritable heart condition. This is the first gene-editing of human embryos performedin the U.S. Sperm from a donor with the gene that causes hypertrophic cardiomyopathy, a non-preventable and incurable condition that affects 1 in 500 people, was injected into healthy egg cells. Using the technology called Clustered Regularly Interspaced Short Palindromic Repeats (CRISPR), a sort of "molecular scissors," the researchers successfully cut out the mutant gene, and the cells were able to repair themselves naturally with copies of healthy non-mutated genes as they multiplied. In response to the concerns about the ethical issue of editing genes, the researchers stated the goal of this experiment is to edit away mutant genes that cause tragic medical conditions, not to produce “designer babies” with a parent’s desired eye color or other frivolous changes. The ultimate goal is eradicating all inherited diseases before a baby is born.   

While emissions-free renewable energy is still too expensive and unstable to meet current energy demands, a startup, NET Power, is trying to change that. They are opening a new fossil-fuel power plant that will produce emissions-free power at about $0.06 per kilowatt-hour, which is about the same price as energy from a natural gas-fired plant. The technology is called carbon capture and storage (CCS). Instead of releasing CO2 into the air, this process compresses CO2 and sends it back to the depleted oil reservoirs to enhance oil recovery and at the same time reduce the carbon footprint of the process. Being well aware that fossil fuels are not going away globally, the company decided to focus on fossil fuels, which are cheap but typically release more emissions than some other energy forms. The adoption of this technology could allow communities to enjoy stable and affordable yet emissions-free power from fossil fuels.
In a new paper published in the Proceedings of the National Academy of Sciences (PNAS), Professors Leda Cosmides and John Tooby from the University of California, Santa Barbara, and their coauthors take an evolutionary look at the issue of income inequality and redistribution. As the authors note,
"Markets have lifted millions out of poverty, but considerable inequality remains and there is a large worldwide demand for redistribution. Although economists, philosophers, and public policy analysts debate the merits and demerits of various redistributive programs, a parallel debate has focused on voters' motives for supporting redistribution. Understanding these motives is crucial, for the performance of a policy cannot be meaningfully evaluated except in the light of intended ends."
The authors of the study argue that support for redistribution reflects motivations that evolved for the small-scale world of our hunter-gatherer ancestors. "Understanding the economic and political nitty-gritty of redistribution does not come naturally to us," said lead author Daniel Sznycer, an assistant professor of psychology at the University of Montreal. "But humans have been interacting with worse-off and better-off individuals over evolutionary time. This process built neural systems that motivate us to act effectively in situations of giving, taking, and sharing."

According to the authors, we see the modern world through the eyes of our ancestors. "Political rhetoric about redistribution involves a cast of characters," said Cosmides, such as "the poor" and "the rich." "The idea is that we view these characters through the lens of motives that evolved to regulate interactions with their ancestral counterparts—community members who are worse-off and better-off than you are."

To understand the logic behind support for—or opposition to—economic redistribution, the research team focused on three motives: compassion, self-interest and envy. They tested how strongly each of these motivations predicted support for redistribution in four societies: the United States, the United Kingdom, India, and Israel.

"Compassion is the emotion that orchestrates need-based help—help toward those worse off than oneself," Tooby explained. "Our ancestors lived in a world without social or medical insurance, and so they benefited from covering each other's shortfalls through mutual help. If your neighbor is starving and you have food, you can save his life by sharing with him. Later, when the situation is reversed and he shares his food with you, your life is saved."

Accordingly, the authors found stronger support for redistribution in people who spontaneously feel more compassion toward individuals in need. Self-interest also played a role: support for redistribution was higher in people who thought that they or their family would benefit from it personally.

The more surprising findings involved envy and fairness. Envy, directed toward those better off than you, predicted support for redistribution. "When a rival outperforms you in some activity, your relative standing decreases," said Sznycer. "People sometimes act to chip away at their rivals' advantages, even when that also harms third parties or even sometimes themselves."

Envy and the spite it generates are socially destructive, he noted, but "they can make sense in the context of an ancestral world that included competitive zero-sum games." When given two hypothetical policies—lower taxes on the rich resulting in more revenue to help the poor versus higher taxes on the rich but less money for the poor—one in six people preferred the second, more spiteful option. This willingness to hurt the poor to pull down the rich was predicted only by the individual's proneness to envy.

Fairness looms large in political rhetoric and theories of justice. But differences in subjects' taste for fairness did not predict how strongly they supported redistribution. The results were the same in the United State, the United Kingdom, India, and Israel: support for redistribution was predicted by compassion, self-interest, and envy, but not fairness.
July 28, 2017
By Chelsea Follett
Breakthrough Against Deadliest Skin Cancer  

Melanoma is the deadliest form of skin cancer. It makes up only 1 per of skin cancer cases, but is responsible for the vast majority of skin cancer deaths, with an estimated 9,730 deaths in the United States in 2017 (so far). Current treatments are often either not tolerated well by the human body or prone to drug resistance. But there is good news. A group of researchers developed a new compound that may be able to treat melanoma without harming nearby healthy cells. They used a molecule fragment, which can be found in vegetables. While not therapeutically effective on its own, when combined with a substance called “napthalamide moiety of mitonafide” the molecule fragment is able to destroy cancer. When tested mice, the newly designed compound reduced tumors by 69 percent and killed most cancer cells without creating toxic effects on the healthy cells in the body.   

Slowing Down Aging with Stem Cells  

Researchers have noted that the speed at which one’s body ages may be determined by stem cells in the brain. By introducing new stem cells, the aging process can perhaps be slowed. Dr. Cai and his team from Albert Einstein College of Medicine were able to identify the cells causing the process of aging and observed the decline of brain stem cells in the hypothalamus. This cellular decline starts much earlier than the appearance of outward signs of aging. Mice from the treatment group, which saw their relevant stem cells disrupted, experienced a faster aging process than their counterparts in the control group. Then the fresh stem cells were introduced to the hypothalami of both groups. And the result was positive for all mice. For all of them, the aging process slowed down. This study may lead to further research on a way of slowing or even stopping aging in humans.   

New Compound Mimics Cells in Human Immune System  

A group of researchers from the Francis Crick Institute in London has discovered a new way of generating human antibodies. B cells, which produce antibiotics in human bodies, can recognize an antigen and quickly multiply to develop a vast amount of antibodies to fight an infection. In this new research, scientists were able to replicate this process in a laboratory. Through this procedure, the scientists were able to produce specific antibodies in just a few days. The process also no longer requires the donor of the cell to be exposed to an infection or vaccination. This new breakthrough may mean that we will one day be able to quickly develop treatments conferring immunity against various deadly diseases or infections, including cancer and HIV.  
July 28, 2017
By Chelsea Follett
Scientists Crack Code to Creating Artificial Spider Silk

At the University of Cambridge, a team of scientists have created an artificial material that emulates the strength and properties of spider silk. This silk is made using a material known as hydrogel, which is 98 percent water and 2 percent silica and cellulose. Although not quite as strong as actual spider silk, the process of producing this thread does not require extreme temperatures or chemical solvents. Therefore, due to its low production cost and readily available materials, it may become more affordable than traditional silk. It is also biodegradable, making it environmentally friendly. The team is currently working on creating an effective method to mass produce the material and bring it to the market, however they are still in the early stages of the process.   

Time Spent Re-Charging May Become a Thing of the Past due to Supercapacitors

Do you hate how long it takes your phone to re-charge?  A new battery breakthrough may make that a thing of the past. A team from Drexel University has combined traditional battery storage methods with the properties of supercapacitors to create rapid charging cycles. The team was able to redesign the structure of a conductive material known as MXene. The material is normally made of layers stacked onto each other like a sandwich, making it difficult for charging ions to move through the battery quickly. But the team edited the structure to resemble Swiss cheese, by combining the MXene with a hydrogel to allow the ions to move through the battery with much less resistance. This technological innovation is not only great for charging personal electronics, but help the budding electric vehicle industry. This technology may change the time needed to charge an electric car to minutes rather than hours.  

Advanced Solar Panel Can Capture More Energy in the Solar Spectrum

Unfortunately, current solar panels are unable to capture energy from the entire spectrum of light. Generally, direct sunlight has wavelengths that fall within the spectrum of 250 to 2,500 nanometers, but it is difficult for a standard solar panel to draw energy from the entirety of such a wide spectrum. In order to remedy this, a researcher from George Washington University designed a panel that is able to capture 44.5 percent of energy from sunlight, making it the most effective solar panel in the world. This prototype uses stacked layers, where each layer can absorb a different set of wave lengths. The use of gallium antimonide materials allow the panels to attract longer wavelengths on the solar spectrum, while a technology called transfer printing allows the panel to be assembled with extreme precision. Although expensive, this solar panel brings the world into a new era of solar energy. 

About a decade ago, I flew to Oslo at the invitation of Norway's center-right party called Høyre. Back then, Høyre was in opposition, although today it forms a part of Norway's governing coalition. Its head, Erna Solberg, whom I met on the trip, is the country's prime minister. During my stay in the country I gave a couple of talks on trade protectionism, advising the Norwegians to keep the millions of krone they send to Africa as foreign aid (where it gets promptly stolen by local cleptocrats) and open their borders to African agricultural exports instead.

"Norway," some people objected, "has stringent food safety standards and Norwegians are used to high quality products." This, I pointed out, does not necessarily amount to much. At the time of my trip, the country was suffering from a domestic E. coli outbreak, and infections "have left several children with kidney failure." Moreover, like people elsewhere, many Norwegians shop with an eye on the price, not the national origin of the food they eat (i.e., irrespective of food safety standards). Thus, Norwegians shop in cheaper Sweden; Swedes shop in Denmark and Danes shop in Germany. In pursuit of a bargain, Germans do some of their shopping in Poland.

I thought of my Norwegian trip, because of a recent news item pertaining to Brexit and the United Kingdom's desire to secure free trade deals with other large economies prior to Britain's withdrawal from the European Union. One of the planned free trade deals includes—the horror of horrors—the United States. Europeans have been brainwashed about the supposed dangers of American food for decades. The EU, for example, bans the import of hormone-treated American beef as well as chlorine-washed chickens. American GMOs, especially, have been anathematized. It will come as no surprise that EU farmers, looking out for their own interests, are strong supporters of the bans.

Along with high import tariffs and import quotas, the EU's outright bans on foreign food items ensure that food prices in Europe are kept artificially high. "EU protectionism," a House of Lords study found earlier this year, "means that huge additional expense is imposed on consumers who might wish to buy products from outside the bloc: on dairy products tariffs are 54 per cent, on sugar 31 per cent and on cereals 22 per cent. It is not surprising that food prices in the EU are significantly higher than world food prices."

Indeed, one of the greatest attractions of Brexit is that the United Kingdom will, once again, be in charge of its own trade policy and able to eliminate bans, tariffs and quotas on agricultural imports, thus making food more affordable to those on the British Isles. Predictably, not everyone is on board with the trade liberalization agenda and British Secretary of State for International Trade Dr. Liam Fox is being raked over the coals for his willingness to allow American "chlorine-washed chicken... [to be] sold in Britain as part of a potential trade deal with the U.S. after Brexit."

Listening to some of the news coverage, you would have thought that American health and safety standards are non-existent, and Americans are being poisoned en masse by the unscrupulous U.S. food industry. Needless to say, chlorine-washed chicken is perfectly safe to eat, as the U.S. Food and Drug Administration (that notorious tool of capitalism) reaffirmed just last year.

Why is this important? If the U.S.-U.K. trade negotiations stall because British food activists and protectionists refuse to recognize U.S. health and safety standards, one of the main benefits of Brexit—the lowering of British food prices—will be undermined. I have a better idea. Put a large sticker with the American flag on every U.S. chicken sold in the United Kingdom and let the British consumers decide if they are brave enough to buy it. If Norwegian consumers can devour a plate of Swedish meatballs at Ikea, British consumers can chow down an American chicken breast and save a few pennies to boot!

July 21, 2017
By Chelsea Follett
Factories producing Ivanka Trump-brand clothing have recently drawn “sweatshop” accusations. Of course, the United States had its own sweatshops once, often with worse conditions than factories in poor countries today.

Those who imagine Industrial Revolution factory work in the United States as a dark and oppressive moment in history might benefit from reading the words of those who lived through it. “Farm to Factory: Women’s Letters, 1830-1860,” published by Columbia University Press, provides a collection of first-hand accounts revealing a more nuanced reality.

The letters do indeed reveal abject misery, but much of that misery comes from nineteenth-century farm life. To many women, factory work was an escape from this backbreaking agricultural labor. Consider this excerpt from a letter a young woman on a New Hampshire farm wrote to her urban factory-worker sister in 1845. (The spelling and punctuation are modernized for readability.)
Between my housework and dairying, spinning, weaving and raking hay I find but little time to write … This morning I fainted away and had to lie on the shed floor fifteen or twenty minutes for any comfort before I could get to bed. And to pay for it tomorrow I have got to wash [the laundry], churn [butter], bake [bread] and make a cheese and go … blackberrying [blackberry-picking].
By contrast, cities often offered somewhat better living standards. Far more women sought factory work than there were factory jobs available.

A closer look at the letters in the book reveals the incredibly varied lives of the “factory girls.” Consider the life of Delia Page. With a substantial inheritance, she was never in need of money. But at age 18, Delia decided to move away from her rural home and work in a factory in New Hampshire. She did that despite the dangers of factory work. A mill in nearby Massachusetts collapsed in a fire that killed 88 people and seriously injured more than 100 others. Delia’s foster family wrote to her about the tragedy and their fears for her wellbeing. But she defiantly continued factory work for several years.

What led well-to-do Delia to seek out factory work in spite of the danger and long hours? The answer is social independence. In their letters, her foster family repeatedly urges her to break off what they saw as an indecent affair with a scandal-ridden man, implores her to attend church and subtly suggests she come home. But by working in a factory, Delia was free to live on her own terms. To her, that was worth it.

The unique story of Emeline Larcom also emerges from the letters. Emeline’s background could not have been more different from Delia’s. Her father died at sea, and her mother, widowed with twelve children, struggled to support the family. Emeline and three of her sisters found gainful employment at a factory and sent money home to support their mother and other siblings. Emeline, the oldest of the four Larcom factory girls, essentially raised the other three. One of them, Lucy, went on to become a noted poet, professor, and an abolitionist against slavery. Her own memoirs cast mill work in a positive light.

Of the diverse personalities captured in the letters, only one openly despises her work in the mill. Mary Paul was a restless spirit. She moved from town to town, sometimes working in factories, sometimes trying her hand at other forms of employment such as tailoring, but never staying anywhere for long. She loathed factory work, but it enabled her to save up enough money to pursue her dream: buying entry into a Utopian agricultural community that operated on proto-socialist principles.

She enjoyed living at the “North American Phalanx” and working only three hours a day—while it lasted. But as with all such communities, it ran into money problems, exacerbated by a barn fire, and she had to leave. She eventually settled down, married a shopkeeper, and—her letters seem to hint—became involved in the early “temperance” movement to ban alcohol (another ultimately ill-fated venture).

Delia, Emeline, and Mary provide a glimpse of the different ways that factory work affected women during the Industrial Revolution. Wealthy Delia gained the social independence she sought and Emeline was able to support her family. Even Mary, who detested factories, was ultimately only able to chase her (ill-advised) dream through factory work.

Although the Industrial Revolution is commonly vilified, it was an important first step toward increasing women’s socioeconomic mobility and ultimately brought about prosperity unimaginable in the pre-industrial world. The pace of industrial economic development may even be speeding up. In South Korea, Taiwan, Hong Kong, and Singapore, the process of moving from sweatshops to First World living standards took less than two generations as opposed to a century in the United States.

Today, across the developing world, factory work continues to serve as a path out of poverty and an escape from agricultural drudgery, with particular benefits for women seeking economic independence. In China, many women move on from factories to white-collar careers or start their own small businesses. Very few choose to return to subsistence farming.

In poorer Bangladesh, factory work has increased women’s educational attainment while lowering rates of child marriage. The country’s garment industry has also softened the norm of purdah or seclusion that traditionally prevented women from working or even walking outside unaccompanied by a male guardian.

Women factory workers are often thought of as “undifferentiated, homogenous, faceless and voiceless” passive victims, but even a cursory examination of their words and lives reveals unique individuals with agency. Today, just as in the nineteenth century, industrialization not only spurs economic development and reduces poverty, but also expands women’s options.

This first appeared in The Federalist.
July 21, 2017
By Marian L. Tupy
One of the reasons for starting Human Progress in 2013 was to allow the users of the website to see the multitude of ways in which the state of humanity was improving. While most people already know that we live longer and earn higher incomes than our ancestors, many people fail to appreciate that the story of human progress is truly multidimensional, including (in alphabetical order) increases in charitable contributions, improved communications, improving business environment and economic freedom, better access to education and cheap energy, a cleaner environment, more food, greater gender equality, improved governance (on average), better health, improved housing, an overall rise in human freedom, progress in labor (fewer work hours and fewer on-the-job injuries), more leisure time, falling prices of most natural resources, increased tourism, cheaper and safer transportation, declining violence and, as mentioned, growing wealth. Our website allows users to access over 1,100 datasets and millions of data points related to all of the above areas of progress and much more. So, as a shameless plug for our website, we have compiled a random list of 40 ways in which the world is getting better, giving all of us, I hope, grounds for optimism about the future.
  1. More people than ever own a personal computer
  2. In just over a decade, it has become substantially easier to start a business
  3. More people than ever have access to sound money
  4. For children aged 7 and under, the expected average years of schooling has never been higher
  5. Global coal consumption is trending downward, thus easing CO2 emissions
  6. Chlorofluorocarbon consumption has reached an all-time low
  7. Wheat yields for U.S. agriculture have never been higher
  8. Internet access in schools has substantially increased
  9. On average, freedom of the press has never been higher
  10. Access to improved sanitation facilities has sky-rocketed
  11. The size of new U.S. homes increases every year
  12. Global labor productivity has shot up over the last six decades
  13. The aerospace industry adds billions of dollars of value to economy
  14. Tourism accounts for a growing share of world GDP
  15. Sales revenue for U.S. manufacturing firms continues to grow
  16. More people than ever are traveling by air
  17. Support for gay marriage in the U.S. has grown greatly
  18. The percent of people living in extreme poverty has never been lower
  19. There are more cellular subscriptions than people
  20. Less regulation of credit, labor, and business has increased economic freedom
  21. Youth literacy has reached an all-time high
  22. U.S. energy consumption has decreased
  23. The price of common food items has declined
  24. Globally, the number of women in the labor force has never been higher
  25. The world is becoming more innovative with each year
  26. More children than ever are being vaccinated for polio
  27. In Europe, ovarian cancer death rates are at an all-time low
  28. In the developing world, share of people living in slums is decreasing
  29. The amount of time women spend on laundry has dropped significantly
  30. The global satellite industry revenue increases by billions every year
  31. Tourism increases as travel becomes easier
  32. Car ownership rates have hit an all-time high
  33. Execution rates in the U.S. have hit an all-time low
  34. U.S. families are adopting new technology at a quicker pace than before
  35. Internet use has sky-rocketed
  36. There are fewer undernourished people than ever before
  37. The amount of work-related injuries has never been lower
  38. The quality of primary schooling hit an all-time high
  39. Cancer rates are declining
  40. The number of people who smoke on a daily basis has never been lower
This first appeared in Reason.
July 14, 2017
By Chelsea Follett
Biohacking Could Make Us Happier, Healthier and More Productive

Stanford wiz kid and ex-Google employee Michael Brandt recently told CNBC that his company, HVMN is developing a line of supplements designed to boost human productivity. Brandt is pioneering a concept called “biohacking,” which seeks to integrate cyber and biotech to enhance human bodily performance. Nootrobox, one of Brandt’s other startups already sells a brand of supplements designed to improve cognitive functions as well as chewable coffee (Go Cubes), a competitor to 5 Hour Energy drinks. Armed with funding from a prominent Silicon Valley venture capital firm, his next act could mark the dawn of a health and wellness revolution.

Want to Slow Aging? A Shark May Hold the Key

A shark is the last place most would expect to find a possible remedy for aging, but that’s exactly what scientists found. The 392 year old Greenland shark is thought to have “long life” genes embedded within its DNA, making its immensely long life possible. Scientists are now in the process of sequencing the shark’s DNA in order to identify the “long life” genes that could lead to breakthroughs essential for developing human anti-aging drugs.

Robots to Perform Knee Surgeries

Of those who have previously undergone a knee operation, only 65% report satisfaction. In response, surgeons are increasingly relying on robots to improve each operation’s accuracy and precision. Tech firms are engaged in a global race to develop and sell new robotic surgical systems for hospitals looking to gain an edge in knee procedures. Stryker spent $1.65 billion to purchase a medical robotics firm and Verily Health Sciences along with Johnson & Johnson are also spending big to enter the space.

Genetically Modified Bananas Could Help Solve Malnutrition

What do you get when you put technology, scientists and bananas together? A possible way to curb the nearly 175,000 deaths that occur each year in countries like Uganda, where children perish from a lack of sufficient vitamin A in their diets. Scientists are in the experimental stage of developing bananas with high levels of vitamin A that could easily be integrated into African agriculture and could serve as a remedy to malnutrition. Public suspicion of genetically modified organisms (GMOs) is undeserved, as genetically modified food staples like these vitamin-enriched bananas may save hundreds of thousands of children from blindness and death.

Better Communication for Earthlings and Martians

A team of scientists in Tokyo announced last year that they are making major strides in an effort to encode information in photon beams that could be easily transmitted long distances in space. If successful, this new technology could significantly improve the speed and security of data transmissions while making it possible to more easily communicate with future settlements on Mars – instead of relying on radio waves that only transfer small amounts of information at once. The Tokyo team hopes that one day small infrared lasers mounted on fleets of mini-satellites could act as transmitters and receivers, quickly transferring data via light rays directly to their intended destinations.

A.I. is Bad News for Thieves

Much has been said about artificial intelligence (A.I.), but one often overlooked aspect of the technology’s potential is how it could help stop thieves and other criminals. QuantaVerse developed an A.I. enabled software that identifies patterns of suspicious financial activity and reports it to bank staff and law enforcement. The system learns on its own and adapts to new strategies employed by criminals. While the technology is still in its infancy, it could eventually play a key role in fighting fraud and protecting the money in your bank account.

July 14, 2017
By Marian L. Tupy
Last week on CapX I explained why the theoretical case for foreign aid is, at best, questionable, and why aid’s practical impact on some of the world’s poorest economies may well have been harmful. The case against aid doesn’t stop there. There are also problems with aid delivery and the negative impact of foreign aid on the spread of democracy.

Official aid is disbursed in a plethora of ways. The European Union, for example, gives aid through the European Commissioner for Development and Humanitarian Aid. But individual EU member-states also have their own aid agencies. Europeans also have a strong voice on the governing boards of the World Bank and IMF, which also disburse aid. In addition to those official agencies, there has been a massive increase in the number of aid-promoting non-governmental organizations (NGOs), which also receive and disburse the money of Western taxpayers.

The “aid industry” provides employment for many thousands of people. Consequently, a large percentage of the money spent on foreign aid goes to cover overhead costs, including administration, travel and accommodation. Michael Maren, a former aid worker, writes that the money spent on aid bureaucracies creates perverse incentives. “We have to take advantage of this famine to expand our regular program,” argued one aid official that Maren encountered in Africa. She saw hunger and poverty as “a growth opportunity”. “Whatever the original intentions,” Maren notes, “aid programs had become an end in themselves.”

Dealing with swarms of donors and aid agencies, all of whom require some degree of attention, puts an enormous strain on African bureaucracies. The time and effort spent on dealing with the needs of foreign donors rather than concentrating on the population has further distanced African governments from their electorates. Working with aid organizations operating in Kenya, for example, became such a problem that the “government and donors… agreed on some principles of partnership that included a ‘quiet time’ between May 1 and June 30 each year.”

Moreover, effective and efficient delivery of aid by a multitude of actors has proved to be an insurmountable challenge. Often, it has resulted in “duplication” of their efforts. Thus, “monitoring surveys indicate that limited progress has been made toward coordination goals by the United States or donors in general.” In Ethiopia, for instance, government officials spend “half to one-third of their time” participating in “coordination meetings” with a multitude of NGOs, international aid agencies and bilateral donors.

Also, many foreign donors have their own agendas that may be detrimental to the welfare of the very people they are supposed to be there to help. Like the 19th-century European missionaries who went to Africa to spread their idea of a “good life”, modern day aid missionaries have found in Africa a fertile ground for social experiments that would never be accepted in their home countries. Tanzania, for example, is still recovering from an attempt to centrally plan the economy, the so-called “Ujaama” policy of collectivization that was bankrolled to the tune of $10 billion by socialist governments in Scandinavian countries in the 1970s and 1980s. Similarly, some Western NGOs, like Oxfam, have urged African countries not to liberalise their trade regimes even though there is a general consensus among academics that free trade is an important source of economic growth and prosperity.

Research also suggests that some aid ends up in the pockets of government bureaucrats instead of reaching the intended beneficiaries. During a 2012 panel on economic and social policy, then World Bank President Ban Ki-moon claimed that 30 per cent of development aid “failed to reach its final destination”. A leaked 2009 cable from the U.S. embassy in Nairobi revealed that $1.3 million in aid for schools was “misappropriated” and another $17.3 million worth of textbooks purchased with aid dollars was “lost” by government officials.

Aid also encourages rent-seeking in recipient countries. Special interest groups and individuals focus their efforts not on being productive, but on lobbying government officials in order to get access to aid. In that way, aid reduces potential economic output and encourages corruption and political conflict.

Moreover, by transferring resources to the favored projects of government officials, competition among domestic producers is undermined. As a result of government favoritism, parts of the domestic consumer base may become captive to firms that provide shoddy and expensive goods and services.

Similarly, aid can undermine the international competitiveness of African exports by artificially strengthening the local currency. As researchers at the IMF found, “aid inflows have systematic adverse effects on a [recipient] country’s competitiveness, as reflected in a decline in the share of labor intensive and tradable industries in the manufacturing sector. We… [found] evidence suggesting that these effects stem from the real exchange rate overvaluation caused by aid inflows.”

Making these matters worse is the lack of accountability and feedback in the aid industry. Very few aid agencies and virtually no individuals are directly responsible for specific outcomes. Independent evaluations of the effectiveness of donor efforts to alleviate poverty or to arrest the spread of disease, for example, are very rare. Moreover, the donors often determine what they will supply without much regard for what is actually needed. This top-down approach has most spectacularly failed to alleviate poverty in Africa where government accountability is weak and institutional deficiencies extensive.

But does aid, in spite of the many problems with its delivery, promote democracy? Many people, including former UN secretary general Kofi Annan, have argued that it does. Researchers from the World Bank, however, found no evidence that aid promoted democracy between 1975 and 2000. In fact, the aid agencies have repeatedly bankrolled some of the world’s most unsavory regimes. According to one study, “The world’s 25 most undemocratic government rulers (out of 199 countries the World Bank rated on democracy) got a sum of $9 billion in foreign aid in 2002. Similarly, the world’s 25 most-corrupt countries got $9.4 billion in foreign aid in 2002.”

Other research goes further, suggesting that aid may hurt democratic development in developing countries. That may be the case for several reasons. Aid helps to undermine democratic accountability in Africa, because African governments find themselves increasingly answerable to the donors, not to the public. Government spending proposals, for example, allocate funds in accordance with the advice of foreign experts rather than the wishes of the electorate.

Aid encourages military spending. Since aid is fungible, it helps some recipient governments free up resources for military purchases that would otherwise be spent on roads and education, for example. Consider the World Bank’s recent contribution of $180 million toward the building of the Chad-Cameroon oil pipeline. Fearing that the oil revenue would be misspent, the World Bank got the Chadian government to commit to spending it on education, health, and infrastructure. What was the result? “The first $4.5 million received as a signing bonus from the oil companies was used to buy weapons—and it is estimated that as much as $12 million may be diverted to buy arms.”

In fact, Professor Paul Collier of Oxford University found that “something around 40 per cent of Africa’s military spending is inadvertently financed by aid.” Aid may also fuel armed competition for resources. There is some evidence, for example, that Somalia’s civil war was prolonged by the competition between different factions for the large amounts of food aid that the country was receiving.

A growing number of Africans question the effects of foreign aid on economic growth and democracy in Africa. President Paul Kagame of Rwanda, for example, has urged Africans “to be honest about the consequences of aid dependence,” for “what really matters most for socio-economic transformation is private capital.” He has called on African governments to create policy environments in which entrepreneurs can flourish. Others, like Ugandan journalist Andrew Mwenda, have pointed to the negative political impact of aid. According to Mwenda, “foreign aid… is providing the government with an independent source of ‘unearned’ revenue. That allows the government to avoid accountability to Uganda’s citizens.” Unfortunately, when Mwenda spoke out against further aid at the 2007 TED Conference, the enraged Irish musician Bono heckled Mwenda with shouts of “Bollocks!” and “That’s bullshit.”

Not only has aid failed to deliver growth in Africa. It hasn’t helped democracy either. Western donors, including the United Kingdom, should re-evaluate their commitment to further disbursements of aid to the continent.

This first appeared on CapX.
The 4th of July marked 241 years since the Declaration of Independence was signed and many writers will, I am sure, take stock of the improvements that have taken place since 1776. It may, for example, be of interest that in 1776, nine out of ten Americans were involved in agriculture and the real average income per person was 23 times lower than what it is today. At $1,235 (in 1990 dollars), Americans were merely six percent richer than the global average. By 2010, Americans earned $30,491 or 390 percent of the global average.

One of the root causes of the great income gap that has emerged between the United States on the one hand and much of the rest of the world on the other, was economic freedom. Prior to the dawn of the Progressive Era, Americans went about their business largely unmolested by the government. In the early decades of the 20th century, however, taxes rose and regulations expanded. The Fraser Institute's Economic Freedom of the World report has been measuring economic freedom since 1970, which is apposite, since the 1970s marked the culmination of the progressive meddling in the economy. Stagflation, which characterized that decade, led to some deregulation under Jimmy Carter, but the real return to economic freedom happened under Ronald Reagan in the 1980s and culminated in the year 2000 under the stewardship of Bill Clinton. The George W. Bush and Barack Obama duumvirate reversed that trend.

Economic literature strongly suggests that economic freedom and growth go hand in hand. Could it be, I wonder, that our declining freedom is, at least in part, responsible for the slow growth rates that we have seen since the start of the new millennium? And that brings me to the other anniversary that happened last week. On July 1, Hong Kong marked 20 years since it passed from British to Chinese hands. It has not been smooth sailing, with political freedoms in the territory taking a predictable knock under the tutelage of a communist dictatorship. Mercifully, Hong Kong remains, as it has over the last four decades, the freest economy in the world.

The rise of the territory from poverty and relative obscurity to one of the most dynamic and richest places on Earth is nothing short of miraculous. Within one lifespan, Hong Kong moved from Third World status to First. Its economic performance vis-a-vis the United States is a testament to the power of economic freedom to generate impressive growth rates.

Consider that in 1950, average income per person in Hong Kong amounted to a mere 25 percent of that in the United States. In 2016, by contrast, the average resident of Hong Kong was 3 percent richer than the average American. In the intervening 66 years, the economy of the territory grew by 1,306 percent. In America, it grew by 247 percent. As we reflect on America's accomplishments since the Declaration of Independence, let us remember that political freedom, such as the one that Americans have and the people of Hong Kong lack, is not a guarantor of rapid economic growth. Economic dynamism and concomitant abundance are best served by a good dollop of freedom, which, alas, we are in the process of slowly losing.

This first appeared in Reason on the 4th of July, 2017.
July 07, 2017
By Marian L. Tupy
In 2015, David Cameron’s government enshrined in law the UK’s commitment to spend 0.7 per cent of its gross national income on foreign aid each year. Ahead of last month’s general election, Theresa May reaffirmed Cameron’s commitment, which amounted to over 13 billion pounds in 2016. “Let’s be clear,” May said, “the 0.7 per cent commitment remains and will remain.”

British charities, including Save the Children, Oxfam, Christian Aid and Comic Relief, praised Mrs. May’s decision, stating that “the aid should be untied, focused on poverty reduction and spent through an independent Department for International Development.” Yet many of the same organizations are also concerned about what they perceive as the lack of government spending at home.

“Grenfell Tower is a Hurricane Katrina moment, revealing the shameful state of Britain,” wrote Oxfam’s strategic adviser Duncan Green following the Grenfell Tower fire. “Austerity, which has seen the budgets of local government cut dramatically with the greatest cuts felt by the poorest areas,” was partly to blame for the disaster, he averred.

While the continued plight of the world’s poor and problems experienced by the British underclass should not occasion jokes about “magic money trees”, it is a simple fact of life that the UK, like most Western nations, must economize. The British debt and deficit amount to 86 per cent and 2.6 per cent of GDP, and while UK domestic spending is best left to British economists to address, I would like to offer some thoughts on foreign aid. And, in particular, the theory behind foreign aid and its impact on the world’s poorest region, Africa.

The first question is whether aid is necessary. In the 1950s and 1960s, many development economists believed in the “vicious cycle of poverty” theory, which argued that poverty in the developing world prevented the accumulation of domestic savings. People in poor countries consumed all of their income and had nothing left to save and invest. Low savings resulted in low domestic investment, and low investment was seen as the main impediment to rapid economic growth. Foreign aid, therefore, was intended to fill the apparent gap between insufficient savings and the requisite investment in the economy.

Today’s calls for more foreign aid are often based on the same theory. Thus, the UK’s Department for International Development (DfID) website claims that it is “targeting British international development policy on economic growth and wealth creation [in poor countries].” The United States Agency for International Development (USAID) promises to work “with private-sector companies to spur economic development, so that citizens can participate in a vibrant economy that allocates resources wisely.”

Yet experience contradicts the “vicious cycle of poverty” theory. Today, many formerly poor countries enjoy high standards of living, while others have stagnated or, in some cases, regressed. For example, the 1960 per-capita income in South Korea was $1,102. In Ghana it was $1,053. By 2015 Korea had reached $25,022, while Ghana is yet to break $2,000, only rising to $1,696 (the figures are in 2010 dollars). Yet, as can be seen in the graph below, Ghana received much more in net official development aid (ODA) per capita than South Korea between 1960 and 2015 (figures are in current U.S. dollars). As New York University Professor William Easterly wrote, “It doesn’t help the poverty trap story that 11 out of the 28 poorest countries in 1985 had not been in the poorest fifth back in 1950. They had gotten into poverty by declining from above, rather than being stuck in it from below, while others escaped. If the identity of who is in the poverty trap keeps changing, it must not be much of a trap.”

Countries that improve their policies and institutions — by increasing their trade openness, limiting state intervention in the economy, building a business-friendly environment, and emphasizing protection of property rights and the rule of law — tend to grow faster than others. Such countries also tend to attract foreign capital, which can help to increase economic growth. Improvement in policies and institutions also creates a suitable environment for growth in domestic investment. As trust in institutions such as the rule of law and protection of private property grows, people feel more confident investing in the local economy.

Today, the size and the scope of global capital markets make Africa’s access to capital potentially easier than at any time in the past. Indeed, private capital flows to developing countries now dwarfs aid flows.

According to the Brookings Institution, ODA to African countries has fallen from “62 per cent of total external flows in 1990 to 22 per cent in 2012,” and the disappearing aid has been largely replaced by private capital. “The volume of external flows to the region increased from $20 billion in 1990 to above $120 billion in 2012. Most of this increase in external flows to sub-Saharan Africa can be attributed to the increase in private capital flows.”

Sub-Saharan Africa is the least economically free region in the world. There is a general consensus among economists that Africa needs to catch up with the rest of the world in terms of economic liberalization. Aid is often intended to promote policy reform, yet it has helped to create disincentives to liberalization for a number of reasons.

For example, aid is often driven by foreign policy considerations, not economics. For much of the Cold War, African countries were given bilateral and multilateral assistance on the basis of their geopolitical importance to the West and the Soviet Union. More recently, a 2015 study by AidData revealed that Chinese aid to Africa is used to both “promote Chinese foreign policy goals,” and advance “the economic interests of the Chinese state as well as Chinese firms operating abroad.” Likewise, American aid to African countries like Ethiopia is often strongly influenced by geopolitical interests. As a recent piece in the Harvard International Review noted, American aid to Ethiopia was long driven by a desire to prevent the spread of Islamic extremism in the country.

Aid has not led to economic reforms in Africa. In the 1980s, the World Bank started to promote structural adjustment loans that were meant to disburse aid to countries in exchange for their commitment to economic reforms. Such conditional lending soon proved ineffective, in part because aid agencies have no enforcement mechanism, and also because they have a well-known bureaucratic incentive to lend, which undermines the credibility of their conditionality.

In fact, aid may also actively retard policy reform. Between 1970 and 1993, for example, the World Bank and the IMF gave Zambia 18 adjustment loans with little or no reform staking place, forcing World Bank researchers to conclude that “this large amount of assistance sustained a poor policy regime.” More generally, two World Bank researchers concluded that “higher aid slowed reform [in the developing world] over the 1980–2000 period.”

Even in those countries that follow sensible macroeconomic policies, aid appears to have no positive effect and may go so far as to discourage reform. Some World Bank research claimed that developing countries that follow good fiscal, monetary, and trade policies benefit from foreign aid. But that research has been difficult to independently corroborate. Scholars who used updated World Bank data found no positive correlation between foreign aid and economic growth in countries with “good policies.” Research suggests that when governments do decide to undertake economic reforms, they tend to do so because of domestic factors, including economic crises.

In short, the theoretical case for foreign aid is, at best, questionable, and aid’s practical impact on some of the world’s poorest economies may well have been harmful.

This article first appeared in CapX.
July 06, 2017
By Chelsea Follett
Since 1915, the year that the U.S. Bureau of Labor Statistics’ Monthly Labor Review began, labor conditions in America have changed drastically. Compared to 1915, the average American in 2015 is healthier, better educated, working less while in a safer environment, and making more money yet spending less on everyday goods. Check out the full BLS report on the progress here.
June 30, 2017
By Chelsea Follett
Protesting so-called “sweatshops” in poor countries is a perennial pastime on college campuses across the United States.

Yet experts across the political spectrum—including Nobel Prize
–winning economist Paul Krugman, Pulitzer Prize–winning journalist Nicholas Kristof, and Columbia University professor Jeffrey Sachs—have argued that opposition to “sweatshops” in poor countries hurts the very workers that activists seek to help. Student activists would do well to read Benjamin Powell’s concise and persuasive defense of such factory work, “Out of Poverty: Sweatshops in the Global Economy,” published by Cambridge University Press in 2014. The book focuses solely on the well-being of factory workers—not what would be best for factory owners or economic efficiency.

Factory workers routinely garner more publicity than the world’s poorest people, who are overwhelmingly rural and live lives of destitution precisely because they are largely untouched by global capitalism. Powell devotes his second chapter to showing that anti-factory activism receives generous funding from labor unions in the United States and Europe. These unions pay lip service to “solidarity” with workers in poor countries but are primarily focused on keeping manufacturing jobs away from poor countries. Powell suggests that unions manipulate idealistic student activists to push for high labor standards that only rich countries can meet, including “sweat-free” labeling for clothing made under those standards.

Powell presents two main arguments for why activists should change their approach: (1) taking away the option of factory work harms factory workers, and (2) factories can serve as a step in the process of economic development that ultimately cures poverty.

If someone chooses to work in a factory, she must see that as her best option. Taking away her best option without offering anything better makes her worse off. As Powell shows, prematurely raising of labor standards and wages by governments results in worse options for factory workers. In the early 1990s, Indonesia more than doubled the real value of its minimum wage in response to U.S. threats of trade restrictions—a policy pushed by U.S. student activists. This led to the closure of many manufacturing plants, and Indonesian employment fell by at least 12 and as much as 36 percent. Similarly, when Nike and Adidas limited working hours at Chinese supplier factories to ease the consciences of U.S. activists, “many workers quit, complaining that the overtime pay was no longer enough.” In South Africa, when government officials tried to shut down rural garment factories for failing to comply with minimum wage laws in 2010, “desperate clothing workers threatened to assault officials and burn their vehicles rather than lose their jobs.”

As Paul Krugman has eloquently put it, “Bad jobs at bad wages are better than no jobs at all.” (Or, as in the Chinese example, jobs at bad wages are better than jobs at even worse wages.) Yet the campaign against factories in poor countries routinely ignores the wishes of the workers themselves, limiting workers’ options.

Factory work is not only a stepping-stone out of extreme poverty for workers, but can help grow an entire economy and eradicate extreme poverty altogether. Remember, today’s wealthy countries once had their own factories with conditions often worse than those in poor countries today. In the United Kingdom, the first country to industrialize, “the process of development involving sweatshops lasted from 130 to 160 years. In the United States, the process was faster, taking around 100 years.” Powell notes that legal labor standards and the introduction of a minimum wage in those countries largely mirrored what factories were already doing—essentially codifying preexisting norms instead of prompting a change in industry practices.

The development process has gotten faster. In South Korea, Taiwan, Hong Kong, and Singapore, the process of moving from industrialization to First World living standards took less than two generations, as opposed to a century in the United States. Factories helped workers in those countries escape poverty and their children achieve postindustrial prosperity. As Powell says, “Sweatshops themselves are part of the very process of development that will lead to their own elimination.”

Instead of opposing factories, activists might consider campaigns to buy goods manufactured in impoverished parts of the world, such as sub-Saharan Africa, in the name of ending poverty. “My concern is not that there are too many sweatshops but that there are too few,” Jeffrey Sachs has stated. “Those are precisely the jobs that were the steppingstone for Singapore and Hong Kong, and those are the jobs that have to come to Africa to get them out of their backbreaking rural poverty.” Foreign aid has never lifted a single country out of poverty, and in Africa aid may actually discourage needed reforms by propping up dictators. “If Africa’s economies are to take off, Africans will have to start making a lot more things,” The Economist declared three years ago. “Few countries … have escaped poverty without putting a lot of workers through factory gates.” Unfortunately, despite its growing population and need for jobs, Africa has been deindustrializing. The continent’s poor business environment and faulty institutions are partially to blame for reducing Africa’s competitiveness relative to the rest of the world.

Activists who want to help the poor should refocus their efforts on ending forced labor (slavery), corruption, and economic restrictions that stifle growth and perpetuate poverty. Governments in many poor countries score poorly in economic freedom and may violate their citizens’ property rights. Africa, the world’s poorest continent, also has the worst record on economic freedom and business environment.

People in developing nations deserve the chance to industrialize and achieve the same prosperity the West gained through its own Industrial Revolution. Infringements upon economic freedom hinder the process of development and prevent people from lifting themselves out of poverty. That is an injustice worth protesting.

A version of this first appeared in the Intercollegiate Review.

Americans spend more on healthcare than any other people in the world, yet U.S. life expectancy lags behind that in many a rich country. This discrepancy between expenditure and outcome, leftists at home and abroad argue, could be addressed by moving toward a single payer system, which would "save money, cover everyone and help us live longer." The U.S. healthcare system needs to be reformed, but is even more government intervention in our healthcare the answer? Let us first look at the data.

In 2014, Americans spent $9,400 per person in 2011 dollars adjusted for purchasing power. That's the most in the world. In second place came Monaco with $7,302. Scandinavian countries, which are often held up as examples to be emulated when it comes to life expectancy, spent less. In 2014, Denmark, Norway and Sweden spent $4,782, $6,350 and $5,218 per person respectively. In 2015, the average life expectancy in the three countries was 80.35 years, 81.66 years and 82.28 years respectively. In the United States, it was mere 79.16 years.
The United States has been drifting away from a free market in healthcare for decades. Obamacare is merely the latest, though arguably the most ambitious, attempt to regulate American healthcare so far. Still, the left feels that Obamacare did not go far enough. So, would a single payer system lead to better health outcomes in America?

Not according to Jonah Goldberg, who notes, "A recent study by the Institute for Health Metrics and Evaluation measured life expectancy by county across the United States. In 2014, a child born in Summit County, Colo., could be expected to live 86.83 years. The life expectancy of a child born in Ogala Lakota County in South Dakota, seat of the Pine Ridge Indian Reservation, is nearly 20 years shorter."

I think Goldberg is onto something when he writes that life expectancy discrepancies have more to do with lifestyle than insurance. If all of us ate well, exercised regularly, and stopped drinking and smoking, the U.S. average would go up. Other changes would make us better off still. Goldberg notes that once fatal car crashes and murders are removed from calculations of life expectancy, the United States has the "world's best life expectancy numbers." Whether that's true or not (there is some controversy about the methodology used in the original study), there is more. Consider the Human Progress chart above. As you can see, the United States started from a considerably worse position, when the United Nations began collecting national life expectancy statistics in 1960. In that year, American, Danish, Norwegian and Swedish life expectancies were 69.77 years, 72.18 years, 73.55 years and 73.01 years respectively. During the following 55 years, life expectancy in the four countries rose by 13.45 percent, 11.32 percent, 11.02 percent and 12.72 percent respectively.

As can be seen, the United States has outperformed Scandinavia in terms of life expectancy gains over the last five and half decades. As a consequence, the gap between the two has decreased. The left might claim that U.S. life expectancy gains coincided with the creation of Medicare and Medicaid programs, even though there is some well-known research that does not support that conclusion.

Be it as it may, the lack of a single payer system (and, perhaps, other more draconian interventions in the health market that can be found in Scandinavia) does not seem to have hindered the superior progress that America's healthcare system has made in terms of life expectancy gains so far.

This first appeared in Reason.
June 30, 2017
By Marian L. Tupy
Twenty years ago on Saturday, Britain handed sovereignty of Hong Kong to China. Today, the territory that the British State Secretary for Foreign Affairs Viscount Palmerston once described as “a barren island with hardly a house upon it,” remains one of the world’s greatest cities and its citizens enjoy one of the world’s highest standards of living.

To get a sense of Hong Kong’s success, consider the life of an elderly Hong Kong resident. Imagine an 84-year-old woman, who was born in 1932 and escaped, along with many thousands, from the mainland to Hong Kong shortly after the 1949 Revolution. In 1950, she would have been just short of her 18th birthday. What kind of a world would she have known? Hong Kong, with an average GDP per capita of $4,120, must have looked like paradise compared to China, where GDP per capita was $644. That was, after all, part of the reason why she defected in the first place. But, compared to the advanced countries of the West, Hong Kong was still a relative backwater. Average per capita incomes in the United Kingdom and the United States stood at $11,921 and $16,197 respectively (all figures are in 2015 U.S. dollars adjusted for purchasing power). In other words, the average resident of the colony earned 35 per cent and 25 per cent compared to British and American citizens respectively. Today, average income in Hong Kong is 37 per cent and 3 per cent higher than that in the United Kingdom and America.

Back in 1960, life expectancy in the colony was 67 years. In the United Kingdom and America it was 71 years and 70 years respectively. Once again, the tables have turned. Today, a resident of Hong Kong can expect to live to 84 years. Comparable figures for the United Kingdom and America are 81 years and 79 years respectively.

Thus, on two of the most important measures of human well-being, which is to say time spent on Earth and the material comfort enjoyed during that time, Hong Kong must surely be considered as one of the greatest success stories of all time. As a British colony, Hong Kong was blessed with property rights, equality before the law and an independent judiciary. While the colony never became a full-fledged democracy, its citizens did enjoy civil freedoms, including those of expression, press, religion and movement.

Unlike some British ex-colonies and the United Kingdom itself, Hong Kong never experimented with socialism. Historically, the government played only a minor role in the economy, restricting itself to providing subsidised housing to the refuges from mainland China.

The territory kept taxes flat and low (around 17 percent of personal and corporate income), government spending as a percentage of the GDP never reached more than 11 per cent of GDP and the budget was balanced. The territory followed a policy of unilateral trade liberalisation, which is to say that the colony allowed other countries to export to Hong Kong tariff-free, regardless of whether other countries reciprocated or not.

As such, Hong Kong was alternatively the freest and the second freest economy in the world between 1970 and 2014 (these are the first and the last years for which data collected by the Fraser Institute’s Economic Freedom of the World report are available).

Economic freedom benefited millions of people in Hong Kong. More importantly, it benefited hundreds of millions of people on mainland China. As the territory grew ever richer, the Chinese communists were forced to admit the failure of socialism, embarking on their own road to great enrichment in 1978. Between that year and 2016, Chinese incomes grew seven-fold, resulting in the greatest poverty reduction in human history.

The link between economic freedom and growth, as irrefutably exemplified by Hong Kong, ought to be of interest to British decision makers as the UK prepares to exit from the EU. After Brexit, the UK could try to replicate Hong Kong’s success by adopting growth-maximising policies, including tax-cutting, further deregulation of the business environment and unilateral free trade liberalisation.

Should Britain choose to follow Hong Kong’s example, embrace greater economic freedom and prosper as a result, other European countries might be tempted to follow in British footsteps. In that sense, the United Kingdom could serve as a beacon of freedom and prosperity for Europe in the same way that Hong Kong served as a beacon of hope for mainland China.

In 1755, the great Scottish economist Adam Smith gave “a pithy description of what he thought the government should do to encourage economic development.” He wrote, “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; all the rest being brought about by the natural course of things. All governments which thwart this natural course, which force things into another channel, or which endeavour to arrest the progress of society at a particular point, are unnatural, and to support themselves are obliged to be oppressive and tyrannical.”

Hong Kong prospered because it followed Smith’s recommendations. Britain does not have to reinvent the wheel. All it needs to do is to embrace her own intellectual heritage and the principles of political and economic freedom, which were British gifts to humanity in the first place.

This first appeared in CapX.