RELEVANCE
There’s a lot one can take from McAfee’s book, More From Less, and the excerpts below.
He offers a nice framework in his four horsemen of optimism and also his four paths to dematerialization. The basic idea that technology enabled dematerialization is the core of getting more from less – but if we connect more from less with ideas of convergence and acceleration – then what happens when we digitize any area is that it both dematerializes, gets more efficient and the innovation cycles accelerate as something that we physical can be modelled and iterated and shared, etc., virtually.
Note that McAfee’s discussion of recombination is logically identical to all the complexity folks – they are all talking about the same things – same elephant, different blind man.. Also – worth noting McAfee’s co-author on a few of his previous books, Erik Brynjolfsson, is at Stanford now.
So while McAfee expounds on where and why we are getting more from less – we should take this as an analytical input or criteria and note that the sign of a company which has what it will take to prosper in the future will already be getting more from less today.
MORE FROM LESS
McAfee, Andrew. More from Less: The Surprising Story of How We Learned to Prosper Using Fewer Resources—and What Happens Next.
[Emphasis in the passage below is ours.]
INTRODUCTION: README
Listen! I will be honest with you,
I do not offer the old smooth prizes, but offer rough new prizes
—Walt Whitman, “Song of the Open Road,” 1856
We have finally learned how to tread more lightly on our planet. It’s about time.
For just about all of human history our prosperity has been tightly coupled to our ability to take resources from the earth. So as we became more numerous and prosperous, we inevitably took more: more minerals, more fossil fuels, more land for crops, more trees, more water, and so on.
But not anymore. In recent years we’ve seen a different pattern emerge: the pattern of more from less. In America—a large, rich country that accounts for about 25 percent of the global economy—we’re now generally using less of most resources year after year, even as our economy and population continue to grow. What’s more, we’re also polluting the air and water less, emitting fewer greenhouse gases, and seeing population increases in many animals that had almost vanished. America, in short, is post-peak in its exploitation of the earth. The situation is similar in many other rich countries, and even developing countries such as China are now taking better care of the planet in important ways.
This book is about how we turned the corner and started getting more from less, and what happens from here forward. I want to make one thing clear at the start: my argument is not that things are good enough now, or that there’s nothing to be concerned about. Those claims would be absurd. Human-caused global warming is both real and bad, and we urgently need to take action to deal with it. We also need to reduce pollution levels around the world and bring back the species we’ve pushed to the brink of extinction. And we have to keep fighting poverty, disease, malnutrition, fraying communities, and other roadblocks to human flourishing.
So, we have plenty of work ahead. The broad point I want to make is that we know how to succeed with this work. In large parts of the world we’ve already turned the corner and are now improving both the human condition and the state of nature. The trade-off between the two has ended, and I’m confident it’s never going to reappear if we play our cards right. In these pages I’ll explain where this confidence comes from and try to get you to share it.
The Thread of the Argument
This book shows that we’ve started getting more from less and tells how we reached this critical milestone. The strangest aspect of the story is that we didn’t make many radical course changes to eliminate the trade-off between human prosperity and planetary health. Instead, we just got a lot better at doing the things we’d already been doing.
In particular, we got better at combining technological progress with capitalism to satisfy human wants and needs. That conclusion will strike many people as bizarre, and for good reason. After all, it’s exactly this combination that caused us to massively increase our resource use and environmental harms starting with the Industrial Revolution in the late eighteenth century. The Industrial Era was a time of startlingly large and fast improvements in human prosperity, but these improvements came at the expense of our planet. We dug out resources, chopped down forests, killed animals, fouled the air and water with pollution, and committed countless other offenses against the earth. We committed more and more of them year after year, apparently without end.
The twin forces of tech progress and capitalism unleashed during the Industrial Era seemed to be impelling us in one direction: that of increasing human population and consumption while degrading our planet. By the time of the first Earth Day festival in 1970, it was obvious to many that these two forces would push us to our doom, since we couldn’t continue to abuse our planet indefinitely.
And what actually happened? Something completely different, which is the subject of this book. As I’ll show, capitalism continued and spread (just look around you), but tech progress changed. We invented the computer, the Internet, and a suite of other digital technologies that let us dematerialize our consumption: over time they allowed us to consume more and more while taking less and less from the planet. This happened because digital technologies offered the cost savings that come from substituting bits for atoms, and the intense cost pressures of capitalism caused companies to accept this offer over and over. Think, for example, how many devices have been replaced by your smartphone.
In addition to capitalism and tech progress, two other forces have also been essential for allowing us to get more from less. These are public awareness of the harms we’re doing our planet (such as pollution and species loss) and responsive governments, which act on the desires of their people and put in place sound measures to counteract these harms. Both public awareness and responsive government were greatly accelerated by Earth Day and the environmental movement in the United States and around the world.
I call tech progress, capitalism, public awareness, and responsive government the “four horsemen of the optimist.”I When all four are in place, countries can improve both the human condition and the state of nature. When the four horsemen don’t all ride together, people and the environment suffer.
The good news is that all four are at present advancing around the world. So we don’t need to make radical changes; instead, we need to do more of the good things that we’re already doing. Let me switch, metaphorically, from horses to cars: we don’t need to yank the steering wheel of our economies and societies in a different direction; we just need to step on the accelerator.
Something for Everyone to Dislike
As you read this book, it’ll be important to keep an open mind because you’re likely to come across at least a few ideas and conclusions that won’t seem right at first. I’ve found that the book’s fundamental concept—that capitalism and tech progress are now allowing us to tread more lightly on the earth instead of stripping it bare—is hard for many people to accept.
It was hard for me to accept when I came across it for the first time—in Jesse Ausubel’s amazing essay “The Return of Nature: How Technology Liberates the Environment,” published in 2015 in the Breakthrough Journal. When I encountered that headline, I had to click on it, which led me to one of the most interesting things I’d ever read.
Ausubel documented the dematerialization of the American economy. Even though he did it carefully and thoroughly, I found myself thinking, “Well, that can’t be right.” It was hard to let go of the notion that as economies grow they must consume more resources. Ausubel’s work started me down a path of questioning that notion, and eventually rejecting it.
An important part of traveling that research path was coming up with an explanation of how we started getting more from less. What caused economic growth to become decoupled from resource consumption? What caused dematerialization to take over? As I’ve already mentioned and as you’ll see in the chapters ahead, capitalism is a big part of my explanation.
Chapter 7: What Causes Dematerialization? Markets and Marvels
The triumph of the industrial arts will advance the cause of civilization more rapidly than its warmest advocates could have hoped.
—Charles Babbage, The Exposition of 1851; or, Views of the Industry, the Science, and the Government of England, 1851
If CRIB strategies aren’t responsible for the large-scale dematerialization of the American economy that has taken place since Earth Day, then what is? How have we got more from less? I believe that four main forces are responsible, and that it’s helpful to think of them as two pairs. In this chapter we’ll look at the first pair, then take up the second in chapter 9.
Capitalism and technological progress are the first pair of forces driving dematerialization. This statement will come as a surprise to many, and for good reason. After all, it’s exactly this combination that caused us to massively increase our resource consumption throughout the Industrial Era. As we saw in chapter 3, the ideas of William Jevons and Alfred Marshall point to the distressing conclusion that capitalism and tech progress always lead to more from more: more economic growth, but also more resource consumption.
So what changed? How are capitalism and tech progress now getting us more from less? To get answers to these important questions, let’s start by looking at a few recent examples of dematerialization.
Fertile Farms
America has long been an agricultural juggernaut. In 1982, after more than a decade of steady expansion due in part to rising grain prices, total cropland in the country stood at approximately 380 million acres. Over the next ten years, however, almost all of this increase was reversed. So much acreage was abandoned by farmers and given back to nature that cropland in 1992 was almost back to where it had been almost twenty-five years before. This decline had several causes, including falling grain prices, a severe recession, over-indebted farmers, and increased international competition.
A final factor, though, was the ability to get ever-more corn, wheat, soybeans, and other crops from an acre of land, pound of fertilizer and pesticide, and gallon of water. The material productivity of agriculture in the United States has improved dramatically in recent decades, as we saw in chapter 5. Between 1982 and 2015 over 45 million acres—an amount of cropland equal in size to the state of Washington—was returned to nature. Over the same time potassium, phosphate, and nitrogen (the three main fertilizers) all saw declines in absolute use. Meanwhile, the total tonnage of crops produced in the country increased by more than 35 percent.
As impressive as this is, it’s dwarfed by the productivity improvements of American dairy cows. In 1950 we got 117 billion pounds of milk from 22 million cows. In 2015 we got 209 billion pounds from just 9 million animals. The average milk cow’s productivity thus improved by over 330 percent during that time.
Thin Cans
Tin cans are made of steel coated with a thin layer of tin to improve corrosion resistance. They’ve been used since the nineteenth century to store food. Starting in the 1930s, they began also to be used to hold beer and soft drinks
In 1959 Coors pioneered beer cans made of aluminum, which is lighter and more corrosion resistant than steel. Royal Crown Cola followed suit for soda five years later. As Vaclav Smil relates, “A decade later steel cans were on the way out, and none of them have been used for beer since 1994 and for soft drinks since 1996.… At 85 g the first aluminum cans were surprisingly heavy; by 1972 the weight of a two-piece can dropped to just below 21 g, by 1988 it was less than 16 g, a decade later it averaged 13.6 g, and by 2011 it was reduced to 12.75 g.”
Manufacturers accomplished these reductions by making aluminum cans’ walls thinner, and by making the sides and bottom from a single sheet of metal so that only one comparatively heavy seam was needed (to join the top to the rest of the can). Smil points out that if all beverage cans used in 2010 weighed what they did in 1980, they would have required an extra 580,000 tons of aluminum. And aluminum cans kept getting lighter. In 2012 Ball packaging introduced into the European market a 330 ml can that held 7.5 percent less than the US standard, yet at 9.5 g weighed 25 percent less.
Gone Gizmos
In 2014 Steve Cichon, a “writer, historian, and retired radio newsman in Buffalo, NY,” paid $3 for a large stack of front sections of the Buffalo News newspaper from the early months of 1991. On the back page of the Saturday, February 16, issue was an ad from the electronics retailer Radio Shack. Cichon noticed something striking about the ad: “There are 15 electronic gimzo type items on this page.… 13 of the 15 you now always have in your pocket.”
The “gizmo type items” that had vanished into the iPhone Cichon kept in his pocket included a calculator, camcorder, clock radio, mobile telephone, and tape recorder. While the ad didn’t include a compass, camera, barometer, altimeter, accelerometer, or GPS device, these, too, have vanished into the iPhone and other smartphones, as have countless atlases and compact discs.
The success of the iPhone was almost totally unanticipated. A November 2007 cover story in Forbes magazine touted that the Finnish mobile phone maker Nokia had over a billion customers around the world and asked, “Can anyone catch the cell phone king?”
Yes. Apple sold more than a billion iPhones within a decade of its June 2007 launch and became the most valuable publicly traded company in history. Nokia, meanwhile, sold its mobile phone business to Microsoft in 2013 for $7.2 billion to get “more combined muscle to truly break through with consumers,” as the Finnish company’s CEO Stephen Elop said at the time of the deal.
It didn’t work. Microsoft sold what remained of Nokia’s mobile phone business and brand to a subsidiary of the Taiwanese electronics manufacturer Foxconn for $350 million in May of 2016. Radio Shack filed for bankruptcy in 2015, and again in 2017.
….
What’s Going On?
There is no shortage of examples of dematerialization. I chose the ones in this chapter because they illustrate a set of fundamental principles at the intersection of business, economics, innovation, and our impact on our planet. They are:
- We do want more all the time, but not more resources.
Alfred Marshall was right, but William Jevons was wrong. Our wants and desires keep growing, evidently without end, and therefore so do our economies. But our use of the earth’s resources does not. We do want more beverage options, but we don’t want to keep using more aluminum in drink cans. We want to communicate and compute and listen to music, but we don’t want an arsenal of gadgets; we’re happy with a single smartphone. As our population increases, we want more food, but we don’t have any desire to consume more fertilizer or use more land for crops.
Jevons was correct at the time he wrote that total British demand for coal was increasing even though steam engines were becoming much more efficient. He was right, in other words, that the price elasticity of demand for coal-supplied power was greater than one in the 1860s. But he was wrong to conclude that this would be permanent. Elasticities of demand can change over time for several reasons, the most fundamental of which is technological change. Coal provides a clear example of this. When fracking made natural gas much cheaper, total demand for coal in the United States went down even though its price decreased.
With the help of innovation and new technologies, economic growth in America and other rich countries—growth in all of the wants and needs that we spend money on—has become decoupled from resource consumption. This is a recent development and a profound one.
- Materials cost money that companies locked in competition would rather not spend.
The root of Jevons’s mistake is simple and boring: resources cost money. He realized this, of course. What he didn’t sufficiently realize was how strong the incentive is for a company in a contested market to reduce its spending on resources (or anything else) and so eke out a bit more profit. After all, a penny saved is a penny earned.
Monopolists can just pass costs on to their customers, but companies with a lot of competitors can’t. So American farmers who battle with each other (and increasingly with tough rivals in other countries) are eager to cut their spending on land, water, and fertilizer. Beer and soda companies want to minimize their aluminum purchases. Producers of magnets and high-tech gear run away from REE as soon as prices start to spike. In the United States, the 1980 Staggers Act removed government subsidies for freight-hauling railroads, forcing them into competition and cost cutting and making them all the more eager to not have expensive railcars sit idle. Again and again, we see that competition spurs dematerialization.
- There are multiple paths to dematerialization.
As profit-hungry companies seek to use fewer resources, they can go down four main paths. First, they can simply find ways to use less of a given material. This is what happened as beverage companies and the companies that supply them with cans teamed up to use less aluminum. It’s also the story with American farmers, who keep getting bigger harvests while using less land, water, and fertilizer. Magnet makers found ways to use fewer rare earth metals when it looked as if China might cut off their supply.
Second, it often becomes possible to substitute one resource for another. Total US coal consumption started to decrease after 2007 because fracking made natural gas more attractive to electricity generators. If nuclear power becomes more popular in the United States (a topic we’ll take up in chapter 15), we could use both less coal and less gas and generate our electricity from a small amount of material indeed. A kilogram of uranium-235 fuel contains approximately 2–3 million times as much energy as the same mass of coal or oil. According to one estimate, the total amount of energy that humans consume each year could be supplied by just seven thousand tons of uranium fuel.
Third, companies can use fewer molecules overall by making better use of the materials they already own. Improving CNW’s railcar utilization from 5 percent to 10 percent would mean that the company could cut its stock of these thirty-ton behemoths in half. Companies that own expensive physical assets tend to be fanatics about getting as much use as possible out of them, for clear and compelling financial reasons. For example, the world’s commercial airlines have improved their load factors—essentially the percentage of seats occupied on flights—from 56 percent in 1971 to more than 81 percent in 2018.
Finally, some materials get replaced by nothing at all. When a telephone, camcorder, and tape recorder are separate devices, three total microphones are needed. When they all collapse into a smartphone, only one microphone is necessary. That smartphone also uses no audiotapes, videotapes, compact discs, or camera film. The iPhone and its descendants are among the world champions of dematerialization. They use vastly less metal, plastic, glass, and silicon than did the devices they have replaced and don’t need media such as paper, discs, tape, or film.
If we use more renewable energy, we’ll be replacing coal, gas, oil, and uranium with photons from the sun (solar power) and the movement of air (wind power) and water (hydroelectric power) on the earth. All three of these types of power are also among dematerialization’s champions, since they use up essentially no resources once they’re up and running.
I call these four paths to dematerialization slim, swap, optimize, and evaporate. They’re not mutually exclusive. Companies can and do pursue all four at the same time, and all four are going on all the time in ways both obvious and subtle.
- Innovation is hard to foresee.
Neither the fracking revolution nor the world-changing impact of the iPhone’s introduction were well understood in advance. Both continued to be underestimated even after they occurred. The iPhone was introduced in June of 2007, with no shortage of fanfare from Apple and Steve Jobs. Yet several months later the cover of Forbes was still asking if anyone could catch Nokia.
Innovation is not steady and predictable like the orbit of the Moon or the accumulation of interest on a certificate of deposit. It’s instead inherently jumpy, uneven, and random. It’s also combinatorial, as Erik Brynjolfsson and I discussed in our book The Second Machine Age. Most new technologies and other innovations, we argued, are combinations or recombinations of preexisting elements.
The iPhone was “just” a cellular telephone plus a bunch of sensors plus a touch screen plus an operating system and population of programs, or apps. All these elements had been around for a while before 2007. It took the vision of Steve Jobs to see what they could become when combined. Fracking was the combination of multiple abilities: to “see” where hydrocarbons were to be found in rock formations deep underground; to pump down pressurized liquid to fracture the rock; to pump up the oil and gas once they were released by the fracturing; and so on. Again, none of these was new. Their effective combination was what changed the world’s energy situation.
Erik and I described the set of innovations and technologies available at any time as building blocks that ingenious people could combine and recombine into useful new configurations. These new configurations then serve as more blocks that later innovators can use. Combinatorial innovation is exciting because it’s unpredictable. It’s not easy to foresee when or where powerful new combinations are going to appear, or who’s going to come up with them. But as the number of both building blocks and innovators increases, we should have confidence that more breakthroughs such as fracking and smartphones are ahead. Innovation is highly decentralized and largely uncoordinated, occurring as the result of interactions among complex and interlocking social, technological, and economic systems. So it’s going to keep surprising us.
- As the Second Machine Age progresses, dematerialization accelerates.
Erik and I coined the phrase Second Machine Age to draw a contrast with the Industrial Era, which as we’ve seen transformed the planet by allowing us to overcome the limitations of muscle power. Our current time of great progress with all things related to computing is allowing us to overcome the limitations of our mental power and is transformative in a different way: it’s allowing us to reverse the Industrial Era’s bad habit of taking more and more from the earth every year.
Computer-aided design tools help engineers at packaging companies design generations of aluminum cans that keep getting lighter. Fracking took off in part because oil and gas exploration companies learned how to build accurate computer models of the rock formations that lay deep underground—models that predicted where hydrocarbons were to be found.
Smartphones took the place of many separate pieces of gear. Because they serve as GPS devices, they’ve also led us to print out many fewer maps and so contributed to our current trend of using less paper. It’s easy to look at generations of computer paper, from 1960s punch cards to the eleven-by-seventeen-inch fanfold paper of the 1980s and conclude that the Second Machine Age has caused us to chop down ever more trees. The year of peak paper consumption in the United States, however, was 1990. As our devices have become more capable and interconnected, always on and always with us, we’ve sharply turned away from paper. Humanity probably hit peak paper in 2013.
As these examples indicate, computers and their kin help us with all four paths to dematerialization. Hardware, software, and networks let us slim, swap, optimize, and evaporate. I contend that they’re the best tools we’ve ever invented for letting us tread more lightly on our planet.
All of these principles are about the combination of technological progress and capitalism, which are the first of the two pairs of forces causing dematerialization.
Technology: The Human Interface with the Material World
One of my favorite definitions of technology comes from the philosopher Emmanuel Mesthene, who called it “the organization of knowledge for the achievement of practical purposes.” Sometimes that knowledge is crystallized into products such as hammers and iPhones, and sometimes it exists as techniques such as those for fracking or precision agriculture.
Like knowledge itself, technologies accumulate. We haven’t forgotten about the lever, the plow, or the steam engine in the Second Machine Age, and we haven’t had to give them up to use cloud computing or drones. Like innovation itself, technologies are combinatorial; most of them are combinations or recombinations of existing things. This implies that the number of potentially powerful new technologies increases over time because the number of available building blocks does.
These facts help me understand why we didn’t start to dematerialize sooner. It could simply be that we didn’t have the right technologies, or enough building blocks, to allow large-scale dematerialization. We had technologies that made it feasible and profitable for us to grow by taking more and more from the earth—more and more metals, fuels, water, fertilizers, and so on—but not ones that made it possible to profitably grow while taking less and less. In the Second Machine Age, that has changed.
My other preferred definition of technology comes from the great science fiction author Ursula K. Le Guin, who wrote, “Technology is the active human interface with the material world. Its technology is how a society copes with physical reality: how people get and keep and cook food, how they clothe themselves, what their power sources are (animal? human? water? wind? electricity? other?), what they build with and what they build, their medicine—and so on and on. Perhaps very ethereal people aren’t interested in these mundane, bodily matters, but I’m fascinated by them.” So am I, because these “mundane matters” have twice reshaped the world—first during the Industrial Era, when technological progress allowed us to prosper by taking more from the planet, and now in the Second Machine Age, when we’ve finally figured out how to prosper while taking less.
Capitalism: Means of Production
Capitalism and religion are the two subjects that leave the fewest people on the sidelines. People have very firmly held opinions on both topics, and few change their minds no matter what evidence and arguments are presented to them. Yet despite this clear history of intransigence, many thinkers and writers have tried to bring others around to their point of view on both topics. Most have failed.
I’m going to join this long sad parade by arguing in favor of capitalism. Before I do that, though, I want to define what I’m talking about. Even more than is the case with technology, clear definitions are important with capitalism because it’s such a triggering word. As the psychologist Jonathan Haidt has pointed out, some hear it as a synonym for liberation, others for exploitation.
But let me put the dictionary before the thesaurus and offer a definition of what capitalism is before suggesting what it’s like. For our purposes, capitalism is a way to come up with goods and services and get them to people. Every society that doesn’t want its people to starve or die of exposure has to accomplish this task; capitalism is simply one approach to doing it. The important features of this approach are:
- Profit-seeking companies. Under capitalism, most goods and services are produced by for-profit companies rather than nonprofits, the government, or individuals. Companies can be owned by only a few people (such as the partners in a law firm) or a great many (publicly traded companies have shareholders all over the world) and are assumed to last over time; they don’t have a predefined end date.
- Free market entry and competition. Companies can go after one another’s markets and customers; there are few if any protected monopolies. It might not be legal to completely copy a rival’s patented product, but it’s perfectly legal to try to come up with something better. In economist-speak, markets are contested. Similarly, people can take their skills from one market to another; they’re not tied to a single geography or job.
- Strong property rights and contract enforcement. Patents are a form of intellectual property. They can be bought and sold just as other kinds of property—from land to houses to cars—can. Laws and courts ensure that none of these kinds of property can be stolen or destroyed, even by large, powerful entities such as billionaires, giant corporations, or the government. Similarly, if a small company and a big one sign a contract to work together, neither party gets to unilaterally walk away from the agreement without fear of getting sued.
- Absence of central planning, control, and price setting. The government does not decide what goods and services are needed by people, or which companies should be allowed to produce them. No central body decides if there is “enough” volume and variety in smartphones, caffeinated beverages, steel girders, and so on. The prices of these and most other goods and services are allowed to vary based on the balance of supply and demand, rather than being set in advance or adjusted by any central authority.
- Private ownership of most things. Smartphones, cups of coffee, steel girders, and most other products are owned by the people or companies that bought them. The companies that produced these things are also owned by people. Many shares of Apple, Starbucks, US Steel, and other public companies are held by mutual funds, pension funds, and hedge funds, but all these funds are themselves ultimately owned by people. Most houses, cars, land, gold, Bitcoin, and other assets are also owned by people rather than the government.
- Voluntary exchange. The phrase most closely associated with capitalism is voluntary exchange. People can’t be forced to buy specific products, take a certain job, or move across the country. Companies don’t have to sell themselves if they don’t want to. They also don’t have to make some products and not others, or stay within specific markets. The Waffle House chain doesn’t have any of its breakfast restaurants in my state of Massachusetts, but that’s not because lawmakers there are keeping it out. The legislature in Boston doesn’t have that power.
I want to highlight a couple of things about this definition. First, capitalism is not without oversight. The government has clear roles to play in establishing laws and settling disputes (to say nothing of setting tax rates, controlling the money supply, and doing other things of critical economic importance). As we’ll see in the next two chapters, every sane advocate of capitalism also recognizes that while voluntary exchange and free market entry are great, they don’t create utopia. Some important “market failures” need to be corrected by government action.
The second thing I want to point out is that all of today’s rich countries are capitalist, by this definition. This is not to say that all capitalist countries are alike. Denmark, South Korea, and the United States are very different places. They have dissimilar trade policies, tax systems, social safety nets, industrial structures, and so on. But they all have all of the things listed above; they are all inherently capitalist. Denmark’s economy is not planned and controlled out of Copenhagen, people in Korea own their own houses and furniture, and contracts in America are generally respected and enforced.
Today’s poorer countries, in sharp contrast, reliably do not have all the things listed above. Their governments tend to run such things as airlines and telephone networks that are run by private companies in rich countries. It’s generally much harder to start a company in less affluent countries, so free market entry and competition are constrained. According to the World Bank, in 2017 it took less than six days to start a business in America, Denmark, Singapore, Australia, and Canada, and seventy days or more in Somalia, Brazil, and Cambodia. The world champion of entrepreneurial sclerosis was Venezuela (a country we’ll talk more about in the next chapter), at two hundred and thirty days. In poorer countries, it’s also often not clear who owns what. Things that are taken for granted in the rich world, such as unambiguous land registries and clear title to houses and other property, are problematic in many developing countries.
The biggest difference between rich and poor countries might be whether laws are clearly and consistently enforced. Poorer countries don’t lack laws; they often have extensive legal codes. What’s in short supply is justice for all. Officials are corrupt; the elite get special treatment and rarely lose in court; police, regulators, and inspectors can expect bribes; and contested markets, property rights, and voluntary exchange suffer in countless other ways. It’s not that these abuses don’t occur in rich countries, but they occur much, much less often.
I’ll make some more points about capitalism in the next chapter. To wrap up this one, I want to emphasize how well technological progress and capitalism work together.