Jim Huntzinger | On March 23, 2021

In my previous two articles (see The Zero Sum Lie and Pies for Everyone and the Divine Light It Brings), I discuss how the United States, with its unique structure and practices, builds unprecedented prosperity and liberty. How has this shining Light from America manifested into the world? Due to the spreading of free-market capitalism, with its emanating roots in America, “the share of the world population living in extreme poverty,” writes Dartmouth College economist Douglas Irwin in the Wall Street Journal, “[has] fallen to 15% in 2011 from 36% in 1990.”[1] That means nearly 1.5 billion people have risen out of object poverty in just over 20 years. That is the light shining out from America to the world. It is truly miraculous.

Wake Forest economist James Otteson revealed in 2012 that, “Since 1800, the world’s population has increased six-fold; yet despite this enormous increase, real income per person has increased approximately 16-fold.” Dr. Otteson continues, “That is a truly amazing achievement.” It is an achievement beyond what any human could have perceived prior to modern times, and many today do not even understand this miracle. Otteson then details the even greater economic miracle despite today’s false perception. “In America,” divulges Otteson, “the increase is even more dramatic: In 1800, the total population in America was 5.3 million, life expectancy was 39, and the real gross domestic product per capita was $1,343 (in 2010 dollars); in 2011, our population was 308 million, our life expectancy was 78, and our GDP per capita was $48,800. Overall, the population increased 58-fold, our life expectancy doubled, and our GDP per capita increased almost 36-fold.”[2]

Dr. Otteson discloses the magnitude of abundant life, in terms of wealth and life expectancy, which the American system hoists, not only on its own citizens, but, in fact, all mankind over the entire planet. “Such growth is unprecedented in the history of humankind,”[3] enlightens Otteson.

Another massive mistake that collectivists and statists make is assuming that the economy needs to be managed in order to relieve it of the boom or bust cycle. First, their intervention of the past century has exacerbated the situation – 1920, the 1930s, the 1970s, and 2008, for example, have illustrated the economic devastation of intervention with severe depressions and recessions. But also to believe that only after 70 years (1840 to 1910) of the existence of large industry that the elite and educated understand everything there is to know about business and industry to the level they, the “enlightened,” can actually manage it, is immorally arrogant and behaviorally ignorant. In the history of the world, the time period between 1840 to 1910 was only the rise of great industry and business; therefore, the interference came into play before any steady length of existence had even passed. There was little-to-no data of how large industry behaves to base any decisions on how to manage it. Regardless of the fact that an economy the size of the United States would most certainly have dynamics within regions, sectors, specific industries, and seasons (weather patterns). The late economist Murray Rothbard explains:

This, however, confuses simple specific business fluctuations with general business cycles.   Declines in one or several industries are offset by expansion of others, as demand shifts from one field to another.   Therefore, attention to particular industries can never explain booms or depressions in general business – especially in a multi-industry country like the United States.[4]

Originally published on Townhall Finance.

Jim Huntzinger

Jim Huntzinger began his career as a manufacturing engineer with Aisin Seiki (a Toyota Group company and manufacturer of automotive components) when they transplanted to North America to support Toyota. Over his career he has also researched at length the evolution of manufacturing in the United States with an emphasis on lean’s influence and development. In addition to his research on TWI, he has extensively researched the history of Ford’s Highland Park plant and its direct tie to Toyota’s business model and methods of operation.

Huntzinger is the President and Founder of Lean Frontiers and a graduate from Purdue University with a B.S. in Mechanical Engineering Technology and received a M.S. in Engineering Management from the Milwaukee School of Engineering. He authored the book, Lean Cost Management: Accounting for Lean by Establishing Flow, was a contributing author to Lean Accounting: Best Practices for Sustainable Integration.