More People Mean More Geniuses
With 18 times more people you get 18 times more geniuses. You also get enormous markets that can accommodate complex and expensive fixed-cost products.
Leonardo da Vinci (1452-1519) is considered by many to be the most brilliant person in history. He lived at at time when global population was around 450 million. IQ is distributed on a normal bell-shaped curve with an average of 100 and a standard deviation of 15. If da Vinci was one in 450 million, his IQ was around 188.
With a population of eight billion on the planet today we have 18 times more people than da Vinci’s day. This means we should also have 18 times more geniuses. I nominate Elon Musk as one of those. So where are the other 17? Perhaps they aren’t as lucky as Elon. Musk was able to exit South Africa and make his way to Silicon Valley. (Note: the co-author of Superabundance left Czechoslovakia and South Africa and landed in America and was then discovered by me on Twitter. Thank heavens.)
Steve Jobs’s biological father was Syrian. Imagine our world if Steve Jobs had grown up in Damascus instead of Silicon Valley? Better question: How many Steve Jobs are in places like Syria today? Now imagine our world if everyone had the freedom and opportunity to achieve their potential and create value like Steve Jobs and Elon Musk.
More people also provide enormous markets that can accommodate complex and expensive fixed-cost products. Apple has spent an estimated $100 billion dollars to create the iPhone. We can own one for $799, or about 21 hours for a typical blue-collar worker earning $38 an hour in wages and benefits. How can iPhones be sold so cheap if they cost so much? Because there are billions of us. $100 billion spread over 8 billion is $12.50 per person. The parts on the product cost Apple around $416. After paying other expenses Apple’s profit margin is around 23 percent. We get to enjoy a $100 billion product and Apple makes $184. Behold, the fruits of capitalism.
There is a reason the iPhone was created in the U.S. and not Venezuela or Cuba. As Professor Don Boudreaux notes, “those who today call for socialism to replace capitalism are ignorant not only of socialism’s well-documented history of failure and tyranny, but also of the enormous benefits that capitalism inspires in creative entrepreneurs to deliver daily, and with disproportionate generosity, to the masses.” We might believe Representative Alexandria Ocasio-Cortez and Senator Bernie Sanders are serious about socialism when they give up their iPhones.
Please consider enjoying our new course on the Economics of Human Flourishing at the Peterson Academy.
We explain and give hundreds of examples why more people with freedom means much more resource abundances for everyone in our book, Superabundance, available at Amazon.
Gale Pooley is a Senior Fellow at the Discovery Institute and a board member at Human Progress.