Every family has their habits when it comes to staying in touch with the elderly. To many it is a regular chore for which every feasible excuse to not indulge in it will be greeted with open arms. However, those people are missing out on the most valuable economics lesson they could possibly get, one which neither their university professors nor their graphs can visualise this superbly. The lovely old ladies and gentlemen who are your parents, grandparents or great-grandparents (for those who enjoy the luck of a very long life) are eyewitnesses of the advantages of free-market capitalism.
In fact, not only are they eyewitnesses, they are among the very few generations to have witnessed the most radical changes that occurred through capitalism. Both economic mobility and technological progress have contributed to the fact that you, unlike most of your ancestors, do not have to work in the fields.
Capitalism makes you earn more
My grandfather used to complain that a croissant in the local bakery would cost more than twice as much as with the old currency, but he later recognised that he was able to buy considerably more pastry that he would have when he started working. Now, how was that possible?
Capitalism had made his family the owners over the means of production. Uniquely, worked for himself and his family, and not to the benefit of someone else. The assurance of property rights gave people to possibility to buy more land and become the beneficiaries of the fruit of their labour.
My grandfather used to complain that a croissant in the local bakery would cost more than twice as much as with the old currency, but he later recognised that he was able to buy considerably more pastry that he would have when he started working. Ferghane Azihari gave a comparable and more observable fact in an article for the Mises Institute:
“In 1800, you had to work, on average, one hour to obtain ten minutes of artificial light. Today, this same hour allows you to buy 300 days of light. In 1900, one kilowatt-hour of electricity cost one hour of work. This costs five minutes of our time now. Buying one cheeseburger in McDonald’s required 30 minutes of hard labor in 1950. This same sandwich now costs about three minutes of your life.”
Capitalism makes you work less
It turns out that the 40-hour work week is not a gift given to you by trade unions, but is in fact a product of free market capitalism. On this point, economists of all sides agree.
Now, how did we get to this 40-hour working week anyway? On one side, working hours decreased ever since the 1870s (Huberman and Minns, London School of Economics, 2007, p. 542): the European average was 63 hours in 1870, 56.3 in 1900 and 53.8 hours in 1913 (Huberman, 2002, p. 19). Neither trade unions nur legislation were able to bring this number of hours down (Costa, 1998, p. 14-15), but, in contrary, modern technology.
Between the beginning of the 19th century and the beginning of the 20th century, agriculture wasn’t very efficient. Production was very slow, and even child labour was necessary in order to make ends meet for many families. The invention of the steam engine and the increase in factor productivity managed to reduce the hours needed to make the same products, while improving living conditions across the board.
All in all, you can say thanks to your grandparents. If they had decided to “resist capitalism”, like many try to do these days, we would decades behind on technological innovation. Our predecessors deserve credit for their hard work, and the opportunities they that free markets provide.
They know that capitalism is pretty awesome.
This article was first published by Freedom Today.
Thanks for liking and sharing!