David L. Martin

in praise of science and technology

Archive for the month “May, 2017”

And now to beat a dead horse…”hard work” revisited again

The industrial revolution in America was slow to get going, compared to that in Europe.  Nevertheless, between 1800 and 1900, the per capita GDP in the U.S. multiplied by about 5 times.  Did Americans work 5 times as hard in 1900 as in 1800?  Of course not.  Human labor was replaced by machine labor, artificial energy sources, and technological innovation.


This was nothing to what was coming in the 20th century.  Between 1900 and 2000, the per capita GDP of the U.S. multiplied by about 8 times.  In 200 years, the per capital wealth of the country multiplied by about 40 TIMES.  Does this mean that Americans worked 40 times as hard in 2000 as in 1800?  Of course not.  Machine labor and technological innovation has replaced human and animal labor.

Of course, there are far more people in the country today than there were in 1800, so there is a lot more human labor available.  Between 1800 and 2000 the U.S. population multiplied by about 60 times.  But over the same time period, the country’s GDP multiplied by almost 2000 TIMES.


In economic discussions, we often hear about “worker productivity.”  The problem is, THERE IS NO SUCH THING.  There is WORKFORCE productivity, also called labor productivity, which is the ratio of productive output to input.  How is this measured?  One of the most common methods is per capita GDP.


“But Dave,” you might well ask, “How does this tell us how much of production is actually being generated by human workers?”  Answer – It doesn’t.  That’s something you won’t hear about in economic discussions, because human workers contribute very little to production.  If you doubt this, just think about trying to run a supermarket business, or an oil field service company, with only human labor.  No machines, no artificial energy sources.  No electricity, no fossil fuels, no mechanization.  Good luck.  Production is not about human workers.


This is amply illustrated by a simple example.  Suppose I grow watermelons.  By myself, by hand, I prepare the field, plant the seeds, hoe the field, and harvest the watermelons.  Every day I break my back for 8 hours to produce these watermelons.  I harvest 100 melons, and sell them for $5 apiece.  I have generated $500 of production.  (Yes, production is measured in dollars – the number of watermelons sold is really irrelevant.)  Now suppose that, instead of doing all of this by hand, I have an air-conditioned tractor with attachments to prepare the field.  It takes all of an hour for me to do it.  I use the tractor with different attachments to plant the seeds.  This takes an hour.  I use the tractor to lay down herbicides to kill the weeds.  This takes an hour.  And I use a mechanical harvester to harvest the melons.  This takes a few hours.

The rest of the time, I sit on my butt and watch the melons grow.  I sell 100 melons for $5 apiece.  I have generated $500 of production.

Notice that the per capita production in these 2 scenarios is exactly the same.  The difference is that in the first scenario, I break my back for months to generate the $500 of production.  In the second, I spend all of 5 hours or so of actual work time, spread out over months.  In fact, if we measured the productivity as a function of man-hours (which economists often do), my productivity in the second scenario is many times that in the first.  Except this is a bit misleading.  It’s “my” production only because I own the machines, land, and facilities that make it possible.


This is what economists and politicians mean when they talk about “worker” productivity.  It has nothing to do with breaking your back.  It is about the monetary value of goods and services in relation to the number of people in the economy, or the hours worked.  “Worker” productivity doesn’t increase when workers work harder.  It increases when machines work harder and faster and more efficiently.  This has been the case all along.


“But Dave,” you might protest at this point, “If this is true, why do companies insist on 40-hour work weeks, and limit vacation time?”  They don’t!  In fact, more and more human labor is part time.  Many companies would be happy to have nothing but part time workers.  That way more workers have to share the same amount of production, leaving the bulk of the wealth for owners.  As for vacation time, the last thing they want is to pay you for doing nothing at all.  You might as well be an owner, like them.  That’s what stockholders are – people who share in the wealth of the company, but are always on vacation from it.


We could have an economy with 1 trillion dollars in production, and 1 million people, all working full time.  It has a labor productivity of $100,000 per capita.  Or we could have half a million people, with everyone working half-time.  The total man-hours would be the same.  Again we could have 1 trillion dollars in production.  But now the labor productivity (production per capita) has doubled!  We could keep chopping up the time.  We could have only 1000 people, each working only a few minutes a day.  Our labor productivity is now 1000 times what it was in the original scenario.  For owners, part-time versus full-time is even better than that, because part-time workers often do not have to receive benefits like health insurance and pension plans.


Notice that we are not actually generating new production in these scenarios.  We are merely dividing up the production pie differently.  And that is the point.  What has generated NEW wealth for the last 200 years is not human labor, but automation.


Of course, most businesses still depend on human labor.  But depending on it and deriving most of your company’s wealth from it are 2 different things.  Humans have all kinds of requirements – they get tired, they have to sleep, they get sick, they get old, etc., etc.  Human labor is often the single biggest expense a company has.  Of course, that is why companies are often anxious to find cheap sources of human labor.  Cutting costs is a big part of enhancing profits.  But that is not the same thing as actually GENERATING new wealth.


Ironically, in the short term, automation may eliminate much of the need for outsourcing.  Machines will replace many of the jobs currently done by cheap foreign or migrant workers.  Companies will naturally want to produce their goods close to where they sell them.  But this will result in only a very modest increase in American jobs, and almost none of them will be the kinds of low-skill, low-education jobs that have been so common in the past.


In 2015, the U.S. GDP was 17.9 trillion dollars.  The number of households was 125 million.  This means that the GDP per household was about $143,000.  $143,000 of wealth was generated last year for every household in America, the vast majority of it generated by machines, artificial energy sources, and technological innovations.  The per capita GDP – in other words, the “worker” productivity – was about $56,000.  About 10 times what is was in 1900.  Of course, some of that wealth IS shared.  Americans, on average, enjoy a high standard of living – air conditioning, refrigeration, chlorinated water, electronic devices, and so on.  Many things that the average American did not have in 1900.  The median household income in some states is as high as $70,000 per year.


But none of this came about because of humans did more physical work.  It came about because of human INGENUITY – because of machines, artificial power, and technological innovation.  And the “hardest” working Americans often get the dregs of the wealth.  The median household income in my home state of Louisiana is only about $42,000.  Half of all Louisiana households make less than that.  Imagine trying to have a decent house and a decent car, not to mention raise children, when your entire household pulls in less than $45,000 per year.  And many households make much less.


A few recent statistics are rather stunning when it comes to income inequality.  In the U.S., 400 people, less than 1 thousandth of 1% of the population, control more than half of the country’s wealth.  Looking at the issue globally, the 3 richest people on earth control more assets than the combined wealth of 48 COUNTRIES.  But focusing on the very wealthy misses the point.  The real divide is between well-educated Americans, who now have a median income of about $45,000 per year, and poorly-educated Americans, who have incomes about 30% less.  This divide is growing and will probably continue to do so.


As I said, many companies, particularly in low-skill industries, are now staffed largely with part time workers.  Automation will almost certainly accelerate over the next 50 years, particularly in these industries.  There is no future for poorly-educated workers.  It doesn’t matter how “hard” they work.  Machines can work harder.  The delusion that “hard work” will always be well-rewarded, already a fiction, is in for a big reality check.

Why has America’s economic growth sagged for 70 years?

The 20th century was a century of remarkable technological progress, remarkable population growth, and remarkable economic growth.  In 1900, the global GDP was less than 5 trillion dollars.  By 2000, it had reached more than 50 trillion.  In 1900, the U.S. GDP per capita stood at about $5000.  In 2000, it was up to $40,000, 8 times as much.  This is an average growth of about 7% per year.  Today America’s per capita GDP stands at about $56,000 – an average growth since 2000 of only 2.4% per year.


Population growth in the 20th century was also remarkable.  In 1900, the world’s population stood at about 1.6 billion.  By 2000, it was up to 6.1 billion.  The U.S. population in 1900 was only about 76 million.  By 2000 it had reached about 280 million.  This is an average growth of about 2.7% per year.  Today it stands at about 320 million – an average growth since 2000 of less than 1% per year.

One striking expression of how remarkable the 20th century was is the maximum speed achieved by humans.  In 1900, it was about 100 miles per hour.  By 1950 it had reached about 800 miles per hour.  Less than 20 years later, it reached about 25,000 miles per hour.  In other words, within 70 years the human speed limit was multiplied by about 250 TIMES.  And then?  Well, that was it.  Today the human speed record remains at about 25,000 miles per hour.


This sudden acceleration, followed by a plateau, expresses pretty well the uniqueness of the 20th century.  And it was all about cheap oil.  Without cheap oil, none of this would have happened.  Oil is incredibly energy-dense.  A Nissan Rogue weighs about one and half tons and gets about 30 miles per gallon.  That means 2 TABLESPOONS OF GASOLINE CAN PROPEL A ONE AND HALF TON VEHICLE AT HIGH SPEED A DISTANCE OF A QUARTER OF A MILE.  Readily accessible cheap oil fueled the explosive growth of the 20th century.  Much of that growth occurred in America.  In 1900, American oil consumption stood at a mere 1 barrel per person.  By 1950 that figure was up to 15 barrels per person.  In the 1970’s it peaked at about 30 barrels per person.


Since much of the world’s oil was consumed by America, it isn’t surprising that world oil consumption followed a similar pattern.  In 1900 it stood at only about 0.2 barrels per person.  By 1950 it had risen to about 1.5 barrels per person, and peaked in the 1970’s at about 5.3 barrels per person.

There is a general consensus that American economic growth has declined.  What is not usually mentioned is that this decline is not just a recent phenomenon.  Here is a graph of America’s annual growth rate in GDP since 1947:


As you can see, there’s a lot of year-to-year fluctuation.  But it is also quite apparent that economic growth has slowly declined over this time.  We can see this at a global level too:


Global economic growth peaked in the mid 20th century, and has been declining since then.  Why?  The answer, I believe, has to do with energy –specifically, cheap oil.  If we look at the price of crude oil since 1950, corrected for inflation, we see that until the early 1970’s it stayed quite low:


Then, with the Arab oil embargo, the price shot up. So if oil stayed cheap until the early 1970’s, why did economic growth decline, starting way back in the 1950’s?  After all, American oil production continued to grow steadily until 1970.  To answer that, we need to look a little further back.  The American economy continued to be fairly strong through the 1960’s.  But this was nothing compared to economic growth in the 1940’s and early 1950’s.  World War II was a terrible tragedy – but it was also an incredible manufacturing boom.  In the 1940’s, American GDP growth averaged 33%!  The war virtually destroyed the rest of the first world.  In its immediate aftermath, America was left as the manufacturing powerhouse of the world.  But of course that couldn’t last.


In 1900, the city of Houston had a population of about 45,000.  By 1960 it was approaching 1 million.   Houston owes its sprawling existence to oil.  Building a megapolis where there was only a small city – that requires enormous amounts of manufacturing and energy.  Think of all of the construction materials and appliances that had to be made to fill that city – refrigerators, stoves, water heaters, air conditioners, and so on – not to mention cars.  Things that didn’t exist in large numbers prior to the 20th century.  The speed with which these things were created would not have been possible without easily accessible, cheap oil.


By 1890, industrial output had already exceeded agricultural output in America.  In 1900, 41% of American workers were still employed on farms.  By 1950 that number was down to 15%.  But as much as building this new America required heavy industry, once it was BUILT, much of that industry was no longer necessary.  As early as 1910, the service sector had already surpassed industry.  In 1950, the share of the economy devoted to manufacturing began to decline sharply.

In many ways, the 1940’s was the culmination of the industrial revolution.  Enormous war machines were built.  Then most of them were destroyed.  After the war, whole countries were rebuilt.  The incredible economic growth of the 1940’s was absolutely unique:


Prior to 1890, the American economy generally grew at a rate of 1-2% per year.  In the 1890’s, as oil began to drive the economy, it became more volatile, with the rate fluctuating from -15% to +15% per year, but often exceeding 4% per year.  This pattern continued until the 1940’s, when the growth rate exploded.  Over the course of the late 20th century, the volatility slowly declined, along with the average growth rate.  Lately it has settled back to about 2% per year.  The graph above nicely encapsulates the uniqueness of the 20th century, and the effect that an easily accessible, inexpensive, extremely powerful energy source – crude oil – had on economic growth.  It turned America from a largely agrarian country to an industrial one.


The last real surge in the American economy was due to the rapid advancement of digital technology in the 1990’s.  But even that can’t begin to compare to the mid 20th century.  Technological advancement just isn’t producing the kind of extreme growth that the industrial revolution brought the world.

But then the question could well be asked, “Why does it need to?  What is the preoccupation with trying to duplicate mid 20th century growth?”  Well, in the first place, economic growth is the constant obsession of American conservatives.  Without plenty of growth, trickle-down economics just won’t work.  You can’t have a functioning government with low tax rates, unless there is plenty of growth to compensate.  They know this.  High growth must be achievable, because their ideology demands it.


But for many older Americans, I think it’s simpler than that.  We still have a lot Americans who remember the mid 20th century.  It was the time of their youth, and they look back on it fondly.  American was the manufacturing powerhouse of the world.  In all kinds of ways, American life was less regulated.  But many of them conveniently forget the high tax rates and strong labor unions of that time.  And in any case, nothing is going to bring those days back.

America versus Europe: Does size really matter?

Over and over again, one thing pops up in discussions about Europe versus America – size.  America is a big country.  European countries are “small.”  And this has everything to do, supposedly, with why America can’t do things they do, like have universal health care and excellent mass transit systems.


In one sense this is an odd thing to focus on, because land area in and of itself doesn’t really mean much.  Connecticut is one of the smallest states in land area, yet it has one of the highest median household incomes in the country – $72,889 per year.  Mississippi, which has almost 10 times the land area, has the lowest – $40,037 per year.  Denmark is a small country in land area, yet has one of the world’s highest per capita GDP’s – $45,709 per year.  Nigeria, with a land area more than 20 times that of Denmark, has a per capita GDP of $6108 per year.


But let’s look a little deeper.  It’s true that America is a big, sprawling country.  It has only 320 million people, spread over an area of about 3.8 million square miles.  Europe, on the other hand, has about 740 million people, spread over about the same area.  But then Australia has less than a tenth of America’s population, spread over an area of about 3 million square miles.  Yet Australia ranks 8th on the Cato Institute’s Human Freedom Index to America’s 23th.  Australia ranks 10th on the Economist Intelligence Unit’s Democracy Index to America’s 21st.  Australia ranks 3rd on the Inequality-adjusted Human Development Index to America’s 19th.  Worldaudit.org ranks Australia 9th in democracy, while America gets 12th place.  And on the Sustainable Solution Network’s Happiness Index, Australia ranks 9th.  America?  14th.


If we look at land area in relation to population, America is smaller than some European countries, larger than others.  Its average population density is about 35 people per square kilometer.  That’s higher than Finland’s (only 16 per square kilometer) but much lower than Denmark’s (133 per square kilometer).  Yet it ranks below both of these countries on measure after measure of human well-being.  Little Iceland has less than half a million people, out on an island in the North Atlantic, with almost no oil production.  Yet it ranks above America on many measures of human well-being.

Okay, well, let’s accept that size doesn’t really matter when it comes to prosperity, health care, or retirement.  But surely it matters when it comes to mass transit.  Mass transit only works in areas of high population density, right?  America has vast expanses of rural land.


Well, let’s look at Finland, most of which lies in the Arctic.  Finland’s population is about 5.5 million.  We have the rail system, which provides passenger service to all major cities and many rural areas.  There is also bus service to virtually every city in the country.  The distance from Helsinki, Finland, to Kokkola, Finland is about 300 miles.  A train ticket for this trip costs about $37.  These are high-speed trains.  The trip will take 3-4 hours – an average of 70-100 miles per hour.


Finland’s trains have a reputation for being spacious and comfortable.  And incidentally, passenger rail is government-owned in Finland.  There are of course links to railway systems in adjacent countries.  Finland is a member of the European Union.


Now let’s compare Finland’s passenger rail system to Florida’s.  Florida is the third most populous state.  Florida’s population is about 20 million, more than 3 times that of Finland.  Only the largest cities even have passenger rail service.  The trains are not that much different than those of 50 years ago.


The distance from Miami to Tampa by rail is about 300 miles.  A train ticket costs $44.  The trip will take about 5 ½ hours – an average of about 55 miles per hour.

It has nothing to do with size, either population-wise or land area-wise.  In fact, in 1936, when the population of Florida was less than a tenth of what it is now, the state had a much more extensive passenger rail system:


America’s railway system was far more developed 100 years ago than it is today.  In 1920 more than 2 million Americans were employed in railroads.  Today that number is less than 250,000.  As recently as the 1960’s, when I was a child, passenger railway travel was still fairly common, and almost every city of any size in America had a train station.

America does have some commuter trains, but they are very concentrated in California and the Northeast.  Many big American cities have no commuter rail system.  Such a thing would be unheard of in Europe.  It isn’t about size.  It’s about America’s love affair with the automobile.  The irony is that many working poor Americans can’t afford an automobile, so they have little choice but to find work close to where they live.  I myself rode a bicycle to work for 5 years – not because I preferred it to a car, but because I was making between $7 and $10 per hour.  Yes, this was in the 21st century.


There is also the argument that the Scandinavian countries are “homogeneous” compared to America.  I won’t spend a lot of time on this because it doesn’t warrant much serious consideration.  I guess it’s supposed to mean that these countries don’t have very much ethnic diversity, and somehow this enables them to be more prosperous and achieve greater social justice.  In a previous post, I pointed out that states that have low ethnic diversity don’t do any better economically than those with large non-white populations.  West Virginia is one of the whitest states in the country (92.5%).  It is also one of the poorest.  Montana is also very white (86.7%).  It ranks 47th in per capita GDP.  California, on the other hand, is one of the most ethnically diverse states.  It ranks 9th in per capita GDP.  44% of the population of New York is non-white.  It ranks 4th in per capita GDP.  There just isn’t any relationship between ethnic diversity and prosperity – other than the fact that urban areas tend to be more prosperous than rural areas, and urban areas are more ethnically diverse.

Size is irrelevant.  It’s irrelevant to prosperity, it’s irrelevant to social justice, and it’s irrelevant to mass transit.  It’s all about psychology.  It’s all excuses.

The Source of Influence for Religious Fundamentalism Worldwide

Some observers are startled at the worldwide popularity of religious fundamentalism in an age of advanced technology.  Christian fundamentalism has a huge influence on politics in America.  Islamic fundamentalism has spread to many parts of the world and is very much on the minds of people in the first world.  Jewish fundamentalism has considerable influence in Israel today and is contributing greatly to tensions in that part of the world.


What accounts for the tremendous influence of religious fundamentalism in the 21st century?  Some people point to the fact that it makes a very emotional appeal to people.  Unlike more moderate forms of religion, it evokes passion for a cause and a strong sense of belonging.  It appeals to notions of purity and identity.  There is no question that it often makes a very personal appeal, promising great rewards as well as great sacrifices.  Suicide bombing has become so commonplace in parts of the world that we tend to overlook how much fervor is required to carry it out.


America has always had a strain of missionary zeal running through it.  This is something that Europeans often notice.  Americans tend to be judgmental and self-righteous.  Europeans tend to be more pragmatic and indifferent.  For a first world country, America is exceptionally religious.  Partly this may be due to the fact that America is a young country with a recent frontier.  It is not hard to see that when life is a struggle just to survive, people turn to religion for hope and confidence.


But this doesn’t really explain the influence of religious fundamentalism worldwide.  Saudi Arabia, for example, is one of the strictest theocracies in the world.  Wahhabism, a fundamentalist variety of Sunni Islam, is the official religion, and it is strictly enforced.  Yet Saudi Arabia ranks 39th among 188 countries on the Human Development Index, ahead of Russia, India, and China.  Saudi Arabia ranks 28th among 123 countries in average disposable income, again ahead of Russia, India, and China.


As with any political or cultural phenomenon, we have to look at the history of religious fundamentalism.  At any given time there are always religious people promoting their particular beliefs.  Some of them are very passionate and articulate.  Why makes one particular brand of religiosity successful?  I will give 2 specific examples.


First, let’s examine the history of Jerry Falwell, a religious fundamentalist who became immensely influential in America.  Falwell was the son of a bootlegger who killed his own brother.  Falwell himself had been in a gang.  But he was also a masterful storyteller who not only founded the Thomas Road Baptist Church, but quickly discovered the power of media to reach people.  He rapidly began to expand his flock.  And Falwell was adamant about tithes – 10%.


Falwell was aggressive in recruiting members.  At one point he tore out 100 pages of names from the Lynchburg, Virginia phone book and gave them to volunteers, along with a recruitment script.  More money enabled him to buy more air time.  At one point a businessman suggested to him that he think like a retailer, using his church like an “anchor store” to build a whole chain of churches.  He began to build new ministries in the area, all the while aggressively recruiting new members.  He sent out recruiters with pockets full of bubblegum door to door, offering to bus children to Sunday school.


In the late 1960’s he built his own religious school, Liberty Christian Academy, partly to avoid desegregation which was now looming.  He and his son took frequent road trips to sell and promote his books and tapes.  Why fundamentalism?  Because Falwell saw mainline American churches losing membership and sensed an opportunity.  His services were often anything but conventional.  In one case he invited a karate expert to demonstrate “God’s power” by breaking a 1-ton block of ice with his hand.  Another time he invited a 7 foot 8 inch wrestler as the “world’s tallest Christian.”  On still another occasion he had a strong man lift 16 people.  His church and his influence kept growing.


Desegregation was looming, and Falwell, unlike Billy Graham, would have none of it.  In what would become a great irony, he condemned religious leaders who marched for civil rights, saying that “Preachers are not called to be politicians, but soul winners.”  He enlisted with J. Edgar Hoover to distribute propaganda against Martin Luther King, having stated clearly his opposition to race mixing:  “When God has drawn a line of distinction, we should not attempt to cross that line.”

Soon Falwell began to pursue plans for a university.  He promoted it by offering free trips to Israel for every student who enrolled.  Liberty Bible College was born.  Now Falwell not only had a permanent money-making machine, but more importantly an indoctrination facility to create new generations of supporters.  Liberty College would become Liberty University, which remains the largest Christian University in the world.


In the early 1970’s, the federal government finally began to really crack down on segregation.  Although Liberty College was not itself segregated, Bob Jones University in South Carolina continued to be, and the IRS threatened to withdraw its tax-exempt status because of this.  Falwell was furious.


In the late 1970’s, a political advocacy group called Christian Voice was founded by two Protestant ministers, with the help of conservative activist Paul Weyrich.  But one of its founders, Robert Grant, soon turned on his colleagues.  In 1978, he stated that Christian Voice was a “sham,” controlled by “three Catholics and a Jew.”


This gave Falwell another opportunity.  Weyrich and 3 of his colleagues left Christian Voice in search of a new advocacy group.  By this time Falwell was already embarked on a series of rallies across America, opposing homosexuality, restrictions on prayer in schools, and the Equal Rights Amendment.  Falwell and Weyrich founded a new advocacy organization, the Moral Majority, in 1979.


In 1973, the Supreme Court’s famous Roe versus Wade decision was handed down, legalizing abortion.  Evangelical Protestants expressed no great concern about it.  In fact, W.A. Criswell, former president of the Southern Baptist Convention, wrote in response that “I have always felt that it was only after a child was born and had a life separate from its mother that it became an individual person.”  There was no great outcry from American evangelical Protestants, many of whom considered abortion to be a “Catholic issue.”  But when Paul Weyrich, a Catholic, joined forces with Jerry Falwell 6 years later, they hit upon an issue that would mobilize support for conservative causes – abortion.


Falwell began to preach constantly about abortion, mobilizing an army of culture warriors.  The Moral Majority was a huge influence in the election of Ronald Reagan, and continued to promote its “pro-family” agenda – anti-abortion, anti-feminism, anti-homosexuality.  These culture war issues remain prominent in America today.


In the 18th century, a Sunni Muslim by the name of Muhammad ibn Abd al-Wahhab led a religious revival in what is now Saudi Arabia.  He became concerned about the “worship” of shrines and objects, such as grave sites and holy trees.  He also considered non-Muslims to be devil worshippers.  Although his own brother criticized his teachings as “fringe and fanatical,” he was able to forge an alliance with Muhammad bin Saud, the founder of the First Saudi State.  Because of this, his teachings, now called Wahhabism, became intertwined with the power of the House of Saud.

These events in themselves might not have led to an enormous global influence of Wahhabism.  In fact, the Ottoman Empire destroyed the First Saudi State in the early 19th century, beheading Muhammad bin Saud’s successor.  But the House of Saud managed to endure.  In the early 20th century, with the support of Britain and France, a pan-Arab revolt overthrew the Ottoman Empire.  In 1932, the nation of Saudi Arabia came into being, carrying with it the Sunni teachings of Wahhabism.

Only 6 years later, in 1938, an event occurred that would have enormous consequences.  Oil was discovered along the Persian Gulf coast.  Standard Oil Company was granted a concession to drill.  Within 15 years, the oil exports of Saudi Arabia increased almost 30 times, and the country became totally dependent on oil.  The House of Saud became fabulously wealthy.  And along with this, the power and influence of Wahhabism increased.


In 1979, the Soviet Union invaded Afghanistan, a Muslim country.  Between 1982 and 1992, an estimated 35,000 Muslim volunteers went to Afghanistan to fight the Soviets.  An estimated 12,000-25,000 of them came from Saudi Arabia.  One of them was a wealthy Saudi named Osama bin Laden.  Bin Laden was a devout Wahhabi Muslim who rejected even films and popular music as contrary to his faith.  He used his fortune to help establish camps to fight the Soviets, and even fought them personally in Afghanistan.

In the 1980’s, Bin Laden formed the organization Al-Qaeda, a secret Muslim organization separate from the main group recruiting anti-Soviet fighters in Afghanistan.  This organization was not explicitly anti-American at the time – in fact the U.S. was still supporting ant-Soviet groups in Afghanistan.  Bin Laden wanted to expand his brand of Muslim fundamentalism and expand the jihadist cause in general.

In 1990, Iraq invaded Kuwait and began to threaten Saudi Arabia.  Bin Laden went to the Saudi government and offered to protect the country, explicitly telling them not to depend on military aid from non-Muslims.  The Saudi government rejected his offer and solicited protection from the U.S.  This angered Bin Laden, who denounced the Saudi government and led to his exile from the country.  Meanwhile, U.S. troops were brought in to defend Saudi Arabia.  To Bin Laden this was the final straw.

In the 1990’s, Bin Laden built terrorist training camps in Sudan and continued to build Al-Qaeda.  In 1996 he returned to Afghanistan and officially declared war on the United States.  By this time, a Muslim faction called the Taliban had gained control of most of the country.  Bin Laden found sympathy and protection with the Taliban, and continued to operate his training camps there.  In 2001, with the attacks on the World Trade Center and the Pentagon, Osama Bin Laden became a household name.

Al-Qaeda remains a powerful terrorist organization to this day, with direct influence in Iraq, Somalia, Libya, Yemen, Nigeria, and other countries.  A rival organization, the Islamic State, is more prominently in the news these days, but Bin Laden’s influence remains strong.  Al-Qaeda has received financial support from wealthy sympathizers in Saudi Arabia, Qatar, and other countries.


My point in going through these two histories is that without something very crucial, neither one of these individuals would have ever had much influence.  That something is money.  No matter how passionate or persuasive, an ideology never really flourishes without financial support.  Religious fundamentalism has not flourished merely because it appeals to people.  It has flourished because there are financial interests backing it.  In America, religious fundamentalism has long had the support of businessmen – in the timber industry, the oil industry, the steel industry, the banking industry, and many others.  George Armstrong, a founding member of the Texas Chamber of Commerce and a top organizer of the Ku Klux Klan, was a pivotal figure in the Christian American Association, which used the mantle of religion to oppose unions, promote racism, and support Protestant fundamentalism.

Schools promoting Christian (mostly Protestant) fundamentalism have been crucial to its propagation in America.  After Dwight Moody died, the Moody Bible Institute struggled financially.  It was rescued by Henry Crowell, founder of the Quaker Oats Company.  The very word fundamentalism originates from a publication entitled The Fundamentals, initiated by Lyman Stewart, a co-founder of Union Oil and the Bible Institute of Los Angeles.

Wahhabism in Saudi Arabia would probably have been little more than a footnote of history had it not been for the enormous pools of oil that happened to underlie this region of the world.  This put enormous wealth into the hands of Muslim fundamentalists, and to this day Saudi Arabia is one of the most theocratic, repressive countries on earth.  Freedom House, a non-partisan research and human rights advocacy organization, continues to rank Saudi Arabia among its worst of the worst for human rights, along with North Korea, Somalia, and Syria.  Even Iran and Cuba rank higher.

Financial support is what has enabled religious fundamentalism to thrive and what keeps it alive.  The exploitation and repression of human beings depends on minimizing their ability to challenge their oppressors, which means keeping them ignorant.  Worldwide, religious fundamentalism is consistently associated with a devaluing of education, particularly the education of women.  It is also associated with the promotion of ethnic and religious hatreds.  It fosters loyalty by promoting purity.  It insists on dividing the world into “us” and “them.


This has not stopped religious fundamentalists from embracing certain kinds of technology, particularly military and communications technology.  What they do not embrace are the things that brought technology about – modernism and its offspring, science.  And this is why countries, and regions, in which religious fundamentalism is fostered consistently lag behind those that do not.  Yes, they can become wealthy temporarily, if they happen to have fossil fuels or some other valuable resource within their borders.  But opposition to modernism is a dead end path.  Freedom, democracy, self-determination, scientific advancement – this is the future.

America the Immature

America is a young country.  When you visit Europe, one of the things that strikes you is how old much of the architecture is.  Construction of Westminster Abbey began in the 13th century.  Notre Dame is even older.  Large portions of Europe have been inhabited for centuries.  In 1800, the population of the United States (excluding Native Americans) was a mere 5 million.  Europe?  About 200 million.

The point is that America has had a large frontier, quite recently in historical terms.  This has everything to do with our attitudes about freedom.  The American ideal of the rugged individual is still very much with us.  We lionize the cowboy, riding the open range, self-sufficient and unrestricted.  In fact, a lot of our notion of freedom isn’t really about community.  It’s simply a reflection of a desire to live without restrictions.


The things is, that cowboy life may be a nice place to visit, fantasy-wise, but the actual reality was a bit different.  You were self-sufficient all right.  No electricity, no running water, no refrigeration, no antibiotics.  Every time you took a drink of water you were risking cholera.  If your appendix burst, you were dead.

Notice another thing.  It’s really a fantasy about a man’s life, not a woman’s, and not a family’s.  And certainly not a community.  The closing of the American West destroyed that kind of freedom.  Soon after, even farming jobs declined, as America became a fully industrialized country.  Today, only about 1.5% of the American workforce is employed on farms or ranches.


In the early 20th century, cars began to be mass produced in America.  The automobile had an enormous effect on our lives.  The modern suburb couldn’t exist without it.  Even as the country became highly industrialized, cars enabled middle class Americans to travel widely, and they did.  They explored their sprawling country, particularly the sweeping vistas of the West.  Hollywood glorified the cowboy way of life – at least a fantasy version of it – in the American mind.  The merging of the fantasy of the rugged individual with the comforts of 20th century life culminated in a profound oxymoron – the urban cowboy.  People who had never even been close to a horse, who never had a glimpse of the hardships of ranch life, let alone frontier life, embraced the aura of the cowboy.

Of course there’s nothing wrong with fantasy – as long as you don’t let it affect your reality.  The cowboy life was the life of the frontier.  It’s gone.  Settlement happened.  Civilization happened.  Community happened.  You might protest, “But Dave, there are still cowboys!  There are still ranchers, still people who ride horses, who brand cattle.”  Sorry, but it’s not the same thing at all.  Not unless those “cowboys” never drink chlorinated water, don’t have access to electricity, don’t use telephones, and never take advantage of modern medicine.  Because all of those things are expressions of CIVILIZATION.  And civilization is about community.

My point is that when you live in a community, and enjoy the benefits of that, freedom takes on a somewhat different aspect.  It’s no longer simply a question of how many restrictions you have on your behavior.  It’s about how well EVERYONE’S rights are respected.

For decades, Americans could drive their cars without being required to have insurance.  Of course there were accidents, and when an accident happened, one driver was considered at fault.  The other driver had to pay for the damage.  This inevitably led to countless court battles.  EVERYONE was paying for it.  There was also the fact that in some cases, the driver at fault simply couldn’t afford to pay for the damage.  In the late 20th century, many states passed laws requiring drivers to have a basic level of auto insurance.


For decades, there were no laws governing seat belts.  Most cars didn’t even have them.  In the 1980’s, several states began to pass mandatory seat belt laws.  Many Americans resented this at the time.  In 1983, seat belt use in America stood at only 14%.  Today it is at 86%.  Every year this number has risen, as new generations of Americans have come up who have never known an America without mandatory seat belt laws.

When I was in elementary school, we walked to school, along trails through a forest, completely hidden from view.  Any of us could have been easily abducted.  Today a parent that allowed their child to do such a thing would likely be jailed for child endangerment.


We live in a regulated society.  And the funny thing is, many of the same people who fantasize about the cowboy life don’t seem to mind racist dress codes, laws that discriminate against homosexuals, or cameras on every street corner.  Often they are incredibly bothered by people who wear baggy shorts or boys wearing makeup.  It seems that “live and let live” only applies as long as you look a certain way, dress a certain way, and never display your affection openly if you happen to be a homosexual.

The frontier is long gone.  America isn’t going back.  The clearest indication of that is how little resistance there is to the proliferation of cameras throughout our public spaces, and the monitoring of our lives in general.  Cameras are almost everywhere now – on the streets, in the stores, in the parking lots.  Our personal information is bought and sold routinely.  The intrusion of government and corporations into our private lives has elicited very little pushback – in fact, laws have been passed at every level of government that give law enforcement tremendous discretion to invade our privacy when it sees fit.

In a way, America is going through the same process that many men go through, as they move from being single “lone wolves” to settling down and having families – in other words, America is growing up.  In the process, freedom becomes much less about how many restrictions you have on your behavior, and much more about things like…Can I afford to keep myself and my family healthy?  How much leisure time do I have?  Can I afford to take my family on vacations?  Will my kids be able to afford college?  Will I be able to have a decent retirement?


Early in the classic movie Deliverance, Burt Reynolds character, Lewis Medlock, is talking to his friend Ed:  “I’ve never been insured in my life.  I don’t believe in insurance.  There’s no risk.”  Later he tells him, “Machines are gonna fail.  And the system’s gonna fail.”  “And then what?” Ed responds.  “Then survival.  Who has the ability to survive.  That’s the game.  Survival.”  “And you can’t wait for it to happen, can you?  You can’t wait for it,” Ed replies.  When Lewis kills a man, his friend Drew says, “This ain’t one of your fucking games!  You killed somebody.  There he is!”  Lewis responds, “I see him, Drew.  That’s right, I killed somebody.  But you’re wrong if you don’t see this as a game.”

There is no indication in the movie that Lewis has a wife or kids.  In fact, he tells Ed, “You got a nice job.  Got a nice house.  Nice wife.  Nice kid.”  Ed responds, “You make that sound rather shitty, Lewis.”  Reynolds’ character expresses an attitude seen in a lot of American men, even if they do have families.  They don’t want to feel domesticated.  They don’t want to feel restricted.  They fantasize about how machines are gonna fail and we’ll return to a simpler, riskier, more thrilling time.  They want to play cowboy.  And this attitude has an enormous effect on our politics.


The problem is that the machines haven’t failed.  On the contrary, technology continues to improve.  Americans tend to overlook the fact that our sophisticated institutions and systems continue to lengthen and improve our lives.  The vast majority of the physical work that sustains us is performed by machines, and this will only increase in the future.  In such a world, freedom is about health, education, and security.  It’s a domesticated world.

In later incarnations of Star Trek, virtual reality systems called holodecks were introduced.  Normally these systems had active failsafes to prevent injury or death.  But these could be deactivated.  As virtual reality systems improve, I have little doubt that many men will choose to play cowboy in them, as well as engage in other virtual thrill-seeking.  Hopefully, such experiences will serve to sharpen the distinction between fantasy and reality.  The reality is that we live in a regulated society called a community, and in a community our actions affect others.  Freedom?  Freedom to do what?  To work long hours for low pay, to have health insurance with high deductibles, to have a crappy retirement system?


The fact is, nothing is stopping any of us from disappearing into the woods and living off the land.  Not in America of course.  But there are plenty of places in the world where you can live quite on your own, without electricity, without air conditioning, without chlorinated water, and without modern medicine.  Without community.  You won’t have to depend on anyone, and you can howl at the moon every night if you wish.  You’ll be “free.”  And you’ll soon discover the difference between fantasy and reality.

For over half a century now, many European countries have had universal health care.  Some of them have free college tuition, and many have strong labor unions, which ensure plenty of leisure time and excellent retirement benefits.  All of this requires a commitment to COMMUNITY.  It requires a realization that freedom in a community requires a commitment to the PUBLIC GOOD.  That doesn’t mean people aren’t still free to move about, assemble, speak their minds, have whatever opinions they want on religion, read or watch what they want, marry who they want to or not.  In fact, 18 European countries are ranked higher than America on the Cato Institute’s Human Freedom Index.


Americans have not held on to their self-contradictory fantasies by accident.  They have been strongly encouraged by well-funded propaganda machines, machines that serve the interests of VERY domesticated people – the people who own and control much of the wealth of the country.  But change is the one constant in life, both personal and political.  The realities of the 21st century will not be accommodating to little boys with grown-up toys.


I have saved Norway for last because Norway ranks number 1 in the world on a number of measures.  Most of Norway lies in the frigid Arctic.  The country has spectacular landscapes – miles of huge fjords, dramatic mountains, numerous glaciers.  But Norway doesn’t have a tremendous amount of good agricultural land.


Norway does have a lot of oil.  Norway produces more than 650 million barrels of oil per year.  It should be noted, though, that this is only about half of what the state of Texas produces.  One important difference is that Norway’s oil industry is largely government-owned.

Norway’s population is about 5.3 million.  If it were a U.S. state, it would be about average.  For a Scandinavian country, Norway has a high growth rate – but compared to most countries, it is quite low, as is typical of a wealthy nation.

Although Norway is not a member of the European Union, it benefits from a considerable degree of free trade because it is part of the European Economic Area.  In addition to oil, Norway has abundant mineral resources, forests, and fisheries.  Norway’s economy is not as diversified as those of the other Scandinavian countries, but the country does have a strong tourism industry.


Some of Norway’s biggest companies are largely government-owned.  Its biggest bank is government-owned.  Its hydroelectric and aluminum industries are government-owned.  It largest telecommunications provider is government-owned.  It should come as no surprise that a large portion of the country’s output consists of government spending – 45%.  More than a third of the entire workforce is in the public sector.

Even by the simple standard of wealth generation, Norway exceeds America.  America’s per capita GDP is $55,805.  Norway’s is $68,430.  What Norway has done is funnel its tremendous natural wealth into public services.  Norwegians have universal health care.  The country has used its oil wealth to build up one of the best-funded retirement systems in the world.  52% of Norway’s workers are union members.


You might think that with so much oil, Norway would forget about renewable energies.  You’d be wrong.  Norway is a world leader in efficient, environmentally-friendly hydroelectric plants.  The country gets more than 98% of its electricity from hydroelectric power.  Norway is also exploring wind power – not for its own use, but to export electricity to other countries!  Ironically, Norway, one of the biggest oil producers in the world, also has the world’s highest number of plug-in electric vehicles per capita.

Norway ranks 14th on the Cato Institute’s Human Freedom Index.  But on other organizations’ measures of well-being, it ranks much higher.  Worldaudit.org gives it a ranking of 4th in democracy.  It ranks number 1 on the Economist Intelligence Units Democracy Index, as well as number 1 on the Inequality-adjusted Human Development Index.  And on the SSN’s Happiness Index?  Number 1.


On survey after survey, Norway is rated near or at the top of the world in well-being.  It has used its tremendous natural wealth for the benefit of its people, rather than to line the pockets of a few.  It has embraced social democracy – a blend of capitalism and social justice.  Its people are among the happiest on earth.


When Americans think of a Scandinavian country, they usually think of Sweden.  Perhaps it’s because Sweden is by far the most populous of the Scandinavian countries, with a population of about 10 million.  If it were a U.S. state, it would be one of the largest ones.  But as with most wealthy countries, its population is growing slowly.  Sweden is right next to Norway, and like Norway, much of it is in the Arctic.  But unlike Norway, Sweden does not face the open Atlantic.  The southern portion of Sweden has a large amount of agricultural land, and this is where much of the country’s population is.


Sweden is not a very big oil producer, only about 4.4 million barrels per year.  America consumes about 20 million barrels of oil IN A SINGLE DAY.  With so much of the country in the Arctic, not much oil, and a population almost the size of Ohio’s, how does Sweden manage?

Sweden is a member of the European Union, and as such it enjoys the tremendous benefits of free trade.  Sweden has a very diverse economy – there are manufacturers like Volvo and Electrolux (which makes appliances); there are technology companies like Ericsson and Sony Mobile; there are security companies like Securitas.  A significant feature is that some big companies, particularly in finance and manufacturing, are government-owned.  28% of Sweden’s workforce is in the public sector.

Sweden has a high maximum personal income tax rate, 57%.  The overall tax burden in Sweden is 42.7%, and government spending constitutes 51% of the country’s output.  Sweden has a value-added tax of 25%.  68% of Sweden workers are union members.  With such high levels of union membership, plus large percentages of public employees, you might expect that wages and benefits would be good.  You’d be right.  Sweden has universal health care and excellent retirement systems.


Sweden has committed itself to move away from fossil fuel power.  Hydroelectric power alone accounts for more than half of electricity production.  Another 35% of the country’s electricity is provided by 10 nuclear power plants.  Another 10% is provided by wind power.  Less than 3% of the country’s electricity is generated by fossil fuels, and Sweden is moving steadily toward increasing biofuels for transportation.

Sweden ranks 15th on the Cato Institute’s Human Freedom Index.  It ranks 8th on the Inequality-adjusted Human Development Index, and 3rd on the Economist Intelligence Unit’s Democracy Index.  On the SSN’s Happiness Index it ranks 10th.  And on Worldaudit.org it ranks number 2 in the world on democracy.  Sweden’s people are enjoying the benefits of a mixed economy in a social democracy.


Iceland is somewhat distinct from the other Scandinavian countries in a number of ways.  For one thing, it is way out in the northern Atlantic.  It sits right on the mid-ocean ridge, which is responsible for its volcanoes and tremendous geothermal resources.  Oil production in Iceland is quite modest.


Iceland’s population is only about 300,000, less than that of New Orleans.  And like most wealthy countries, its population growth is slow.  Although it is near the Arctic Circle, Iceland benefits greatly from warm ocean currents, which make it relatively warm for being so far north.  It has abundant fisheries and some modest crop production.  Yet Iceland tends to rank highly on measures of human well-being.

Iceland ranks 25th on the Cato Institute’s Human Freedom Index, but on the Economist Intelligence Unit’s Democracy Index it ranks 2nd.  It also ranks 2nd on the Inequality-adjusted Human Development Index.  On the SSN’s Happiness Index it ranks 3rd in the world.  Why?

Iceland has a diverse economy.  Aluminum production is important.  Manufacturing includes such things as biotechnology and software production.  Ecotourism is very important – in fact, the country receives more than 3 times its own population in tourists!  Iceland has a substantial finance industry, which has made it vulnerable.  In the global financial crises of 2008, Iceland suffered greatly.  The nation’s entire banking system failed.  Yet Iceland has largely recovered.  Clearly it is a resilient country.

Free trade is critically important to Iceland.  Although it is not a part of the European Union, it is a member of the European Free Trade Association, and is one of the most highly-rated countries on free trade by the Heritage Foundation.


One thing Iceland excels at is home-grown renewable energy.  Virtually all of its electricity comes from either hydroelectric or geothermal power.  In fact the country has the largest electricity production per capita in the world.

Iceland’s maximum personal tax rate is only 31.8%.  Of all of the Scandinavian countries, Iceland has the lowest overall tax burden (39%) and the lowest percentage of output in government spending (44%).  But here’s the thing – Iceland has the highest percentage of workers in union membership of any Scandinavian country – a whopping 85.5%.  Powerful labor unions keep wages up and benefits flowing.  Iceland has universal health care.  Its employer-based retirement systems are excellent, with employees contributing only 4% to their retirement.


The people of Iceland enjoy abundant clean energy, a thriving tourism industry, and the benefits of strong labor unions.  That is why they have recovered so quickly from economic catastrophe.


Finland is right next to Sweden, and most of it lies in the Arctic.  One interesting thing about Finland is that it was not really an industrial country until the mid 20th century.  Unlike Denmark and Norway, Finland is not a big oil producer – it only yields about 3.6 million barrels per year, a fraction of what America consumes in a single day.


Finland’s population is about 5.5 million, mostly in the southern part of the country.  Like most wealthy countries, its population growth is slow.  Like Norway, Finland is COLD.  Much of the country’s natural landscape is Arctic tundra.  You might not expect a largely Arctic country, with relatively little oil, to rank highly on measures of human well-being.  In this case, you’d be wrong.  The Sustainable Solutions Network ranks Finland number 5 IN THE WORLD on their Happiness Index.  The Cato Institute ranks the country 9th on the Human Freedom Index, and it also ranks 9th in the world on the Inequality-adjusted Human Development Index.  The Economist Intelligence Unit ranks it 10th on their Democracy Index.  And Worldaudit.org ranks Finland NUMBER 1 in democracy.  Why all of these good ratings?

Being so far north, Finland has never been a big crop producer.  However, it does have substantial forestry and fisheries industries.  It also has significant minerals and chemicals industries.  Finland has high technology industries such as electronics.  But the vast majority of Finland’s economy consists of services.  About a quarter of the entire workforce is in the public sector – a whopping 58% of the country’s output consists of government spending.  Finland is a member of the European Union and is highly dependent on free trade.

Finland has one of the most extensive public welfare systems in the world.  Like other Scandinavian countries, it has universal health care.  It has excellent retirement systems, both public and private.  69% of Finland’s workers are members of labor unions.


Finland gets 20% of its electricity from hydroelectric power and 27% from its 4 nuclear power plants.  Wind power is still a small contributor but is growing rapidly.  About 55% of the country’s electricity comes from renewables, compared to only 36% from fossil fuels.

Finland’s maximum personal income tax rate is quite low for a Scandinavian country, only 31.8%.  However, it finds other ways to collect revenue.  There is a mandatory pension fee of 23% – most of this is paid by employers, not employees.  There is a value-added tax of 24%, and there are excise taxes on things like alcohol and sweets.  The country’s overall tax burden is 43.9%.


Open markets, strong labor unions, transparent government – these are the keys to Finland’s success.


Denmark is the southernmost and smallest of the Scandinavian countries.  It is only a third the size of my home state of Louisiana.  For such a small country, Denmark produces a lot of oil – about 54 million barrels per year.  This is quite comparable to Louisiana’s 56 million barrels per year, but far below that of Texas – about 1.2 billion barrels per year.


Denmark’s population is about 5.7 million, which would put it about in the middle if it were a U.S. state.  As is typical for a wealthy country, its population is growing slowly.  Because it’s a peninsular/island country, Denmark has relatively mild winters – meaning the average temperature in January is actually above freezing!  Denmark is the leading pork exporter in Europe, and has a huge fisheries industry.  Denmark is a member of the European Union, and trade is extremely important.

Denmark produces steel, chemicals, ships, toys, and wind turbines, among many other things.  High technology is also important – the largest particle accelerator in the world is in Denmark, and the country has a thriving biotechnology industry – for example, it is one of the world leaders in equipment and medicines for diabetes.


Despite the fact that Denmark has large deposits of oil and natural gas, it has committed to renewable energies.  Denmark has been investing in wind energy for decades and today this little country is one of the top wind power producers in the world.  An incredible 42% of the country’s electricity comes from wind power.  This is more than ONE AND HALF TIMES its electricity production from fossil fuels.  Overall, the country gets 55% of its electricity from renewables, and is planning to be completely independent of fossil fuels by mid-century.

Denmark’s maximum personal income tax rate is 56%.  A great deal of government revenue comes from the value-added tax, which is generally 25%.  This may seem high – but keep in mind that a value-added tax is not a sales tax.  If you buy a gallon of milk for $5.00, with a 10% sales tax, you pay 50 cents in tax.  But with a value-added tax, if the store bought that gallon of milk from its supplier for $4.50, you only pay tax on the 50 cents of value added.  So with a 25% value-added tax you would only pay 13 cents tax.

Well over a third of all the country’s workforce is employed in the public sector.  Government spending constitutes 56% of the country’s output!  It’s not hard to see why these people are willing to pay taxes – those very taxes are providing many of them with their paychecks, not to mention providing their health care and retirement income.


Denmark ranks consistently highly on measures of well-being.  It’s ranking on the Cato Institute’s Human Freedom Index is 5th.  It is also ranked 5th on the Economist Intelligence Unit’s Democracy Index.  On the Inequality-adjusted Human Development Index it ranks 7th.  Worldaudit.org ranks it 3rd on democracy.  And on the SSN’s Happiness Index it ranks 2nd in the world.

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