Thinking Books: The Birth of Plenty by William J. Bernstein

The Birth of Plenty is a straight forward history econ book that says for there to be prosperous standard of living you must have strong property rights, scientific rationalism, capital markets, transportation and communication. If a nation is lacking any one of these they are crippling their people from being more prosperous. While the history of the book can be twisted and wrong at times the points are fairly clear yet Bernstein fails to address things like political espionage, exploitations of labor/resources, political cronyism with businesses, economic blockades from competitive markets, and so on. There are a few ideas I have spun from this work though that I would be interested in hearing more from Bernstein in an updated text.

While property rights allow a strong personal investment from the civilians in its nation— what is to become of nations where younger generations are facing larger wealth gaps and the ability to purchase property (home/land) is shrinking exponentially due to private sector snatching. Bernstein does address that capital investments can take the place of private property but many don't even have the financial means to setup a basic 401k let alone a private investment portfolio. We are also watching market manipulation through hedge funds, career insider trading, and constant business fraud that protections from are being wiped away or pardoned by those in power.

The wealth gap is becoming more and more of an obvious issue that Bernstein points out himself in figure 11-1 in the book that the percentage of income earned by the top 1% is rising to near 1920s levels, I don't feel that i need to remind you of the economic crisis of that time. Businesses are reaching near monopoly levels again while having employees on government assistance (food stamps, medicaid) and purposefully holding their hours under a threshold or flipping the script to "sub-contracted" employees (Uber, prime drivers, door dash, etc.) so they don't have to provide them with full time benefits. These large businesses are also getting huge tax breaks and also being bailed out by the government during financial crisis which they give their board members bonuses while telling the general public they are lazy and need to pull themselves up by their boot straps.

Bernstein talks about the history of capital market loans and how those with more wealth receive better interest rates which is also feeding into our wealth gap when it comes to business startups and investments. Those with generational family wealth are automatically at a greater advantage of accumulating more wealth due to little to no risk in the loans in their business ventures. The issues of nepotism and insider networking that leaves little wiggle room for newcomers.

We are told to go to college if we want a good paying career yet many are quickly finding out that isn't the case for the most part. Some will blame this on people going into bad majors (gender studies, humanities, arts) but if you look up the research a lot of STEM and economic degrees are facing the same issues of starting wage growth is stagnating especially compared to inflation and growing cost of living. The extreme spike in university cost in the last couple decades as well is throwing the higher system educated into the market at a large deficit of student loans that are higher than the cost of a home while working jobs that cant pay off those loans in a reasonable time to attain a 30 year mortgage.

Capitalism is also working so well that people are purchasing beyond their means. This matter is complicated by predatory credit card companies that are giving out credit lines to people at such extreme interest rates that people will be paying off only the interest on these cards, turning $1000 of credit debt into thousands of dollars in never ending payments. Even for those that are able to escape this creditor debtor relationship they are punished through their credit score tanking when they close a credit line or dont keep the card expenses approx 30% of the maximum credit line. The credit score system for those who wish to own property of a home or automobiles is based on not how good you are getting out of debt but how well you can stay in debt— its not a risk assessment on loans anymore, its how can we maximize making money off of you assessment.

How can a nation expect to function properly when its relationship to its citizens is not about freedom, justice, and happiness but how can we enslave you and squeeze every bit out of you before you completely crumble? But hey our GDP says you're happy.