Q: What are the two forces that create abundance?
A: Technology & Subsidy
It’s easy to see that Americans today have more, do more, and expect more, than humans at any other point in history. But what’s driven that abundance?
With a fixed supply of natural resources and an exponentially increasing world population, you would think we would all have less; but that’s not been the case on the whole (although you can debate it is for individuals or certain people groups).
Since the Industrial Revolution Americans have gained access to more and more, thanks to technology. Machines, assembly lines, mass-production, and tractors; especially present day advancements such as computers, internet, and cell phones; have all driven abundance.
However, a second major cause of abundance is Subsidy.
Subsidies have been around for a long time, but beginning slowly in the 1970’s and gaining a lot of steam in the last 30 years we’ve seen an unprecedented amount of money spent by the Federal Government (tax payers) to help keep costs low in industries they deem worthy.
Annual US Federal Government Subsidies (doesn’t include States)
1950: $4.7B
1970: $19.0B
1980: $37.8B
1990: $106.5B
2000: $181.2B
2010: $216.9B
2020: $2,626.6B (or $2.2T to businesses for COVID)
(Compare that to the $400B of stimulus directly to people)
I hope you benefit from the increased profit-margins from one of the many companies that are receiving government subsidies. You can see which and how much here: https://subsidytracker.goodjobsfirst.org/parent-totals
But despite subsidies supposedly making things cheaper, prices continue to rise. And that’s because subsidy does not actually create more. Instead, it takes from one individual and redistributes it to others.
It’s been remarkable how the internet (technology) has made information so cheap and accessible. We should continue to invest in technology that will continue to leverage our efforts and our resources in the same way.
When people want knowledge to be free, technology pays for that.
When people want College to be free, Government (tax payers) pays for that.
When people want faster, safer, and more reliable transportation, technology pays for that.
When people want free cars, subsidy pays for that.
Creating subsidies for gas and oil incentivizes companies to drill oil and produce gas.
Development in technology has the potential to create cheap, abundant, and clean energy.
With more technology, we get more abundance.
With more subsidies, we don’t get more, we get other.
We should shift our mindset from “Cheaper” to “Better”.
Cars were better than cheaper horses.
Eric Jorgenson (who was the inspiration for this Answer)
Railroads were better than cheaper wagons.
Electricity was better than cheaper candles.
Airplanes are better than cheaper railroads.
The Internet is better than cheaper stamps.
Computers are better than cheaper abacuses.
Wikipedia is better than cheaper encyclopedias.
Nuclear Fission is better than cheaper oil.
Autonomous cars & trucks are better than cheaper drivers.
Actionable Question: Am I asking for the poor to have more, or for the rich to have less?
I wish you and your family more in this next season—but I hope it comes from the right place.
Andrew Nemeth