Betterment
Focusing on value creation instead of innovation could give us better results
"children and mobile phone" by mbeo is licensed under CC BY-NC-ND 2.0.
Economic historian Deirdre McCloskey often says that “the Great Enrichment” our species has experienced since 1800 is one of the strangest and most remarkable events in our whole history. Pretty much nobody anticipated it before 1800, but here you are, reading an essay on a device that would have been unthinkable just a few decades ago.
In real terms, we are on average some 3,000% better off in terms of real wages than most of ancestors. Although some people do still live on $2 per day, the number of people that do has fallen like a stone since 1973 and is continuing to fall.
By Max Roser based on World Bank and Bourguignon and Morrisson (2002). - https://ourworldindata.org/extreme-poverty, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=65979023
McCloskey argues that the Great Enrichment has been “so big, so unprecedented” that we can’t explain it by referring to imperialism, trade or slavery, which all existed for many centuries beforehand. Instead, she says that unprecedented ideas around human dignity and liberty are responsible. These allowed ordinary people to tinker around in search for what she calls “betterments.” Finding better goods and services then helps other people.
The ongoing success of the Great Enrichment disproves Karl Marx’s infamous prophecy about the inevitable collapse of a market-based economy based on testing potential betterments (he called this capitalism). Many on the hard left have failed to come to grips with this failure, as we discussed in an essay that discussed Antonio Gramsci, an Italian thinker who added ideas back into Marx’s materialist philosophy. Many on the hard left nowadays bet on apocalyptic environmentalism, while those of us who take the Great Enrichment seriously (some call the movement “techno-optimism”) would prefer to see market-based solutions based on betterment instead.
Recent essays on Sharpen Your Axe have dealt with value creation, which I feel is a better way of framing McCloskey’s ideas about the Great Enrichment than innovation - a term is much more common in techno-optimist circles. The reason is simple: some innovations will destroy value. This week’s essay will probe the difference between the two concepts.
We have already discussed one example in the essay on diet. “Industrially produced edible substances” have proliferated since the 1970s and 1980s. Snacks and sugary drinks have certainly been innovative, but o the whole they have actively destroyed value for their consumers. Obesity has become much more common, as have disease of captivity like type 2 diabetes.
Another example comes from “platform decay.” The best way for entrepreneurs to build a vast fortune nowadays is to create a small amount of value for millions of people around the world in a digital context and then claw back some of the returns through subscriptions or advertising revenue. As soon as you have built a dominant platform, though, the incentives change. You can now actively destroy value for your users one update at a time. We have also extensively discussed how crypto failing to create enough value; and the dangers of grifters copying the style of entrepreneurs who genuinely create value.
Another theme has been implicit in many of the essays. It is time to make it explicit. The current iteration of the internet and generative artificial intelligence (GenAI) can encourage superficiality and shallowness. Here’s a description of The Brothers Karamazov from ChatGPT, for example:
"The Brothers Karamazov" is a Russian novel by Fyodor Dostoevsky that delves into the complexities of family dynamics, faith, morality, and the human condition through the interactions of the three Karamazov brothers: Dmitri, Ivan, and Alyosha, as they navigate love, jealousy, and spirituality amidst their father's murder trial.
If any of you have ever struggled through Fyodor Dostoevsky’s book, you will probably be laughing right now. Like a heavy meal, it is hard to digest. You might want to read one chapter and then think about it for the rest of the day. At this rate, it takes weeks to read it, if not months; and you might need to read it a second or third time to fully appreciate all the themes. I personally had to read it three times before I felt I was even beginning to come to grips with it.
Although modern tech can be shallow, as we can see in this example, it doesn’t necessarily have to be. Amazon’s Kindle device and software are truly amazing. You have access to huge amounts of knowledge, which would have been unthinkable to previous generations. All you need to do is to download the software onto your tablet; download a book or two from Amazon’s online shop; leave your phone in another room; and go and read one chapter carefully and slowly on your bed or your sofa. That’s it. It has never been easier to rebel against the shallowness you see around you!
On a similar note, public intellectual Jonathan Haidt has captured headlines recently with his new book, which suggests that the advent of social media, online porn and smartphones has been terrible for childhood. His research appears impeccable. However, I think his proposed solutions, which are largely based on parents trying to shut the stable door long after the horse has bolted, are the weakest part of his book.
As we saw just a moment ago, with the example of the Kindle, we can use tech to rebel against the downside of tech. Let me take a short detour to the House of Commons. I was a Lobby reporter for 18 months in 2000 and end of 2001. Nobody was allowed to use mobile phones in much of Parliament, so journalists, politicians and aides all used to have pagers on our belts. If the newsroom wanted to contact a Lobby reporter, his or her pager would buzz with the relevant phone number. It was easy enough to nip out and find an area where phones were allowed to make a quick call. And, yes, feel free to crack a joke about us all looking like high-class drug dealers!
By Thiemo Schuff - Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=6495087
If any aspiring entrepreneurs want a free idea, why not create a modern version of the pager for children and teenagers? You could combine it with a smartwatch. The idea would be that parents and grandparents would have the number and could send a message in genuine emergencies. The kid could then put their real phone on airplane mode most of the time. The pager could also be configured to track the kids’ movements, reducing parental anxiety about kidnapping when they are out and about by themselves or with friends.
The next-gen pager could also be packaged with a child-friendly mobile, which has various options, such as airplane mode (rebranded as school mode), limited mode (phone calls plus WhatsApp) and full mode. It could include time limits, so that it would automatically switch off full mode after two hours of use every day.
What do you think? Could pagers make a comeback? Are you worried about kids staring at their phones instead of climbing trees in the local park? Are you going to try and read The Brothers Karamazov? Or consume fewer sugary drinks? Should we start using the term “betterment” instead of “value creation”? The comments are open. See you next week!
Previously on Sharpen Your Axe
The split in the enviromentalist movement
Value creation (part one and part two)
Jonathan Haidt (part one, part two and part three)
Further Reading
The Brothers Karamazov by Fyodor Dostoevsky
The Anxious Generation: How the Great Rewiring of Childhood Is Causing an Epidemic of Mental Illness by Jonathan Haidt
Why Liberalism Works: How True Liberal Values Produce a Freer, More Equal, Prosperous World for All by Deirdre Nansen McCloskey
This essay is released with a CC BY-NY-ND license. Please link to sharpenyouraxe.substack.com if you re-use this material.
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If this is the first post you have seen, I recommend starting with the third anniversary post. You can also find an ultra-cheap Kindle book here. If you want to read the book on your phone, tablet or computer, you can download the Kindle software for Android, Apple or Windows for free.
Opinions expressed on Substack and Substack Notes, as well as on Bluesky, Mastodon and X (formerly Twitter), are those of Rupert Cocke as an individual and do not reflect the opinions or views of the organization where he works or its subsidiaries.
I can imagine great marketing campaigns to introduce cool pagers and smartwatches for kids. That's actually a wonderful idea!!