‘People times freedom’ hailed as formula for wealth and progress

from Grassroot Institute of Hawaii, October 3, 2022

We often hear that the world’s natural resources are running out, humans are in danger and our margin of error to save the planet is getting thin. But Grassroot Scholar Gale Pooley has an intriguing message to share of hope and infinite prosperity.  

Pooley is an associate professor of business management at Brigham Young University–Hawaii and co-author with Marian Tupy of the new book “Superabundance: The Story of Population Growth, Innovation, and Human Flourishing on an Infinitely Bountiful Planet,” which has been receiving rave reviews nationwide.

He appeared with host Keliʻi Akina, president and CEO of the Grassroot Institute of Hawaii, on the Sept. 27, 2022, episode of ThinkTech Hawaii’s “Hawaii Together” program, the topic of which was. “Is the World Running out of Resources?”

According to Pooley, humanity isn’t doomed; we’re actually on course to living more abundant lives than ever.

He said that for centuries, humans have assumed that food production will lag behind population growth, “and as a consequence of this, we would end up kind of collapsing.” But the book “Superabundance” flips that theory on its head, supporting instead the idea that as the planet’s population increases, so too does knowledge; and with that, infinite possibilities for supporting an ever-growing population.

“What we really have come down to,” he said, “is this idea that [economic] growth and knowledge is a function of people times freedom. So you may have a country that has a lot of people, but if they don’t have much freedom, you’re not going to have much innovation.” If you want to “escape poverty,” he said ,”you’ve got to let people have the freedom to really pursue new knowledge.”

Pooley said the metric through which abundance can be gauged is “time prices”: “If we can measure how much time it takes you to earn the money to buy something, we can convert a money price into a time-price.” he said.

Looking at the time prices of 50 commodities dating back to 1980, Pooley and Tupy found that “not a single one had become more scarce.” In fact, he said, on average, “the time it takes to earn the money to buy this basket of 50 commodities, had fallen by over 70%” — even as the world’s population inreased by nearly 3 billion people.

So, what does this mean for Hawaii? 

“Look at where [Hawaii] was a hundred years ago,” he said, “and ask yourself: Is Hawaii richer today in terms of our standard of living … than it was a hundred years ago?”

He added: “I wake up every morning, and I’m just astonished that I live on a chain of semi-dormant volcanoes in the middle of the Pacific Ocean, and I have air conditioning, and I’ve got a Costco, and … that’s all a consequence of human beings being able to adapt and be creative and be able to turn liabilities into assets.”

Asked about Hawaii’s declining population, Pooley said that as Hawaii becomes “less and less attractive, you have fewer and fewer people here [who] can work on solving the problems and creating the new ideas. … When they leave, their ability to share and create ideas with people around them also leaves with them; so we’re losing this asset to another part of the planet.”

Pooley said Hawaii should “be open to the idea that we want to be this attractive, beautiful place for people that want to come in and create new value for the rest of us.”

TRANSCRIPT

9-26-22 Keli‘i Akina hosts Gale Pooley on “Hawaii Together”

Keli‘i Akina: Aloha, and welcome to “Hawaii Together” on the ThinkTech Hawaii broadcast network. I’m Keliʻi Akina, your host and president of the Grassroot Institute of Hawaii. 

My guest today is Gale Pooley, a good friend and associate professor of business management at BYU-Hawaii and also a Grassroot Institute scholar. Gale has taught for BYU-Hawaii and at colleges and universities on the mainland and internationally. He’s a fellow of the Discovery Institute and serves on the Foundation for Economic Education Faculty Network.

Gale and his colleague Marian Tupy are well known for their work in the Simon Abundance Index, which is the measure of how the scarcity of resources has changed over time. 

Gale joins me today to talk about his new book, “Superabundance: The Story of Population Growth, Innovation, and Human Flourishing on an Infinitely Bountiful Planet.” What an intriguing title. [laughs] 

Gale will also be talking about the implications of his thoughts for Hawaii and the world. 

Gale, welcome back to the program. So glad to have you today.

Gale Pooley: It’s great to be here, Keliʻi. Thank you for the opportunity.

Akina: Well, we’ve been seeing each other at conferences across the country as you’ve been taking your message to the world, really. Are you getting a good reception to some of your ideas?

Pooley: Well, we’ve really been surprised at how pleased people have been with what we have discovered — this idea that as population increases that our resources are increasing at actually a faster rate. And that’s really what the book is about.

We developed this framework that allows us to look at the, what we call the time-price of things, and that’s based on this idea that we buy things with money, but we really pay for them with time. 

So, if we can measure how much time it takes you to earn the money to buy something, we can convert a money price into a time-price. For example…

Akina: That’s very fascinating, so I look forward to sharing your book with a lot of people. 

You know, the world’s population is expected to grow to more than 8 billion people by the end of this year. There are a lot of people, Gale, who fear that the world cannot sustain that growth. 

What do you think is creating those concerns? Why do we have such a fear of this?

Pooley: Well, we’ve had this history of Malthusianism, which is really this idea that was advanced by Thomas Malthus back in 1798 that population was going to increase, but we could only increase food production at a much lower rate. 

In other words, food production grew at a linear rate but population would grow at a geometric rate. And as a consequence of this, we would end up kind of collapsing. 

And this argument has kind of captivated the minds of much of our culture over the last 200 years. So, we saw it kind of rise up again in the ’60s with the publication of…

Akina: Sure.

Pooley: … Paul Ehrlich’s “The Population Bomb.” We saw it in the early ’70s with other books like “The Limits to Growth.” We saw it in our culture with movies like “Soylent Green.”

And so we’ve had this idea in the culture that we live on a planet that has a fixed number of atoms, and if you add more people to it, that everybody’s share is going to get smaller and smaller.

Akina: Now, you’ve actually countered that with your own research, and your first major book on the subject was entitled “Superabundance.” 

Give our viewers a 50,000-foot view of what your primary message is to counter those we call the prophets of doom.

Pooley: OK. The primary message is that economics is not about atoms. It’s not about — we recognize that there are a fixed number of atoms on the planet, but economics is not about atoms. Economics is about knowledge, and what the difference between our age and the Stone Age is entirely due to this growth in knowledge. 

Knowledge is what makes atoms valuable, and we don’t appear to have any kind of a limit on this ability that we have to discover, create, share and consume knowledge. 

It’s knowledge that makes things valuable, and knowledge comes from human beings. It begins with human beings that have ideas, that those ideas then become inventions, and those inventions can become innovations. 

And so it’s really knowledge — the growth and knowledge — that we should be focusing on; and we can, we can measure that.

Akina: Well, that’s a fascinating thesis. Instead of looking at finite resources and thereby putting a cap on what we can actually produce and envision for the future, we look at knowledge itself and the capacity of knowledge to actually impact the finite resources that are out there. 

Tell me first a little bit about your co-author, Marian Tupy. Why did you both decide to start writing on this topic, and are there other authors and researchers out there who collaborate with you, who’ve inspired you?

Pooley: Well, I actually discovered Marian on Twitter. 

He’d written this nice little article, which was a follow-up to this bet that occurred back in the 1980s between Paul Ehrlich, the author of “The Population Bomb,” and an economist, Julian Simon, and they’d made this bet in 1980 about what was going to happen to these five nonrenewable metals. It was copper, chromium, nickel, tin and tungsten. And by 1990, the real price of these five metals had dropped by 36%.

So, our initial research question was: Would Simon win this bet today? And so we went back to 1980, expanded the set of resources from just these five to 50; so we include energy and food, materials, minerals and metals. And then we also extended the period from 1980 up to that point, to 2018. 

So, we made a much larger database to analyze. And then we subjected it to this analysis. We suspected that there would be at least one of these 50 commodities that had become less abundant, and to our kind of astonishment, not a single one had become more scarce. In fact, on the average, the time-price, or the time it takes to earn the money to buy this basket of 50 commodities, had fallen by over 70%.

Now, remember that the world population also grew by almost 3 billion people over this period. So, as population was increasing, the price of these things were all going down. In other words, they were becoming much, much more abundant. 

And so, that was our initial paper that we did, and we call this the Simon Abundance Index. And then as a consequence of that paper, we decided we should look at other things as well. So, we went and — went back further in time, went back to 1850, and found commodity prices and compared them to wages and developed time-prices for those.

And so Marian and I, Marian and I — he’s with the Cato Institute — he and I just developed this great kind of working relationship where we were both very curious about this, and so we would just find these data sets, do this analysis and produce our findings. And that’s what, what really evolved into the book that we wrote.

Akina: Well, I read [about] time-price quite frequently in the literature that you produce, and it’s a new addition to our vocabulary of looking at resources and the future. 

How would you apply that to some of the struggles that we’re facing in the world today? How, how could we talk more about the value of time-price?

Pooley: Well, I think we go back — you know, there are money prices; and the money prices, we kind of separate that into nominal prices and real prices. In other words, what’s the price today, in terms of dollars and cents, and what was it yesterday? 

And we make these adjustments to try to say, well, inflation is this percent. All inflation is doing is just telling us just how much the price has changed; it’s not telling us about the affordability.

In order to really calculate and determine if something’s becoming more or less affordable, you’ve got to compare it to wages —  so, what is the price divided by what are the wages? And that ratio really gives you the time-price. 

So, if a pizza costs $20 and you’re earning $20 an hour, that pizza, the time-price is one hour. So money prices are expressed in dollars and cents; time-prices are expressed in hours and minutes.

So, what we do is we go back in time and determine what the time-price is of a product or service, and then compare it to what the time-price is today. And that percentage change in the time-price over time is really the basis for what we should be doing when we’re trying to determine if things are becoming more or less abundant. 

If it takes you half the time to work to earn something today as it did 10 years ago, your life is twice as abundant.

Jordan Peterson makes an interesting observation; he says that if you can do the same amount of — if you can, if you can produce the same amount in half the time, you’re twice as smart; you’ve doubled your knowledge. And that’s what we try to do at…

Akina: How about that?

Pooley: Yeah, that’s what we tried to do is we try to — can you measure the growth and knowledge with time? 

George Gilder, our friend George Gilder, has these three beautiful little principles that he states. He says wealth is knowledge, growth is learning and money is time. And that gives you the basis to derive a theorem that you can measure the growth in knowledge with time.

So just look at how much — and the fundamental issue is that when, when you experience innovation, when an innovation happens, it shows up in the economy all over the place. It shows up in lower prices, but it also shows up in higher incomes. 

And so unless you’re looking at the relationship between the price and wages, you’re really not fully capturing what innovation is doing. And that’s what we attempted to do in the book, is fully capture innovation.

Akina: I remember when I was a young man and growing up in elementary school and then even all the way through my early years of college, in order to look something up — a very basic fact, something from history or something from philosophy or science — I’d have to get ready to walk to the library. 

And then I remember back at Northwestern University, I’d have to put my winter clothes on and cover my chest and fight the snow and get to the library and find out that the book wasn’t there. 

Today, you just pull up your phone and you Google the question, you know, and it’s so much different than before when you talk about the role of time in terms of the measurement of value.

Now, there’s another value that you and I have talked about a lot, and that is economic freedom. It’s an important principle: the extent to which individuals, organizations and countries are free from government control in being able to enter into free-will economic decisions with other people and other entities. 

Now, in your work, I think we see some correlation. Let me ask you this question: Places like India, China and other countries that have very rapidly growing populations also tend to have less economic freedom and relatively high poverty rates. What could these countries learn from the principles of “Superabundance,” and has embracing economic freedom helped in the past?

Pooley: Yeah, absolutely. In fact, part of our book is we looked at the economic growth in terms of these time-prices for 42 different countries. China and India both were included in our index. 

And what we really have come down to is this idea that, that this growth and knowledge is a function of people times freedom. So you may have a country that has a lot of people, but if they don’t have much freedom, you’re not going to have much innovation because it really is — its innovation fundamentally starts with this discovery of new knowledge, and that requires a culture where freedom is present. 

The freedom to be able to act on your ideas and then turn that idea into the invention that you are imagining, and then having a free market where you can go test that invention to see if it’s actually created value or not.

As you see these countries with large populations — China and India — move toward a more innovation-friendly or knowledge-creation-friendly environment, you’re going to see people being able to escape poverty and then make contributions to the rest of us on the planet with their new discoveries. 

So we’re very hopeful that people will be able to recognize that, you know, the governments will be able to recognize, look — if you want to escape poverty, you’ve got to let people have the freedom to, to really pursue new knowledge. 

Because if wealth is knowledge, what do you have to do to give people the incentives and the ability to discover this new knowledge the rest of us all benefit from?

Akina: Bringing the conversation a little bit closer to home, Gale. You and I both know here in Hawaii that a lot of people think that there are too many people in the islands, that we are actually overpopulated. 

For some time, some organizations and government agencies actually communicated that our population was growing when in fact, we look at the data and find that over the last decade, our population has started to decline and is projected to decline further in the next several years. 

What kinds of problems does it pose for Hawaii that we have a declining population? How does that actually — how do you think that’s going to impact our islands?

Pooley: Well, uh, [laughs] I’m not an expert on Hawaii, but I can tell you from the perspective of how do we create more knowledge, it fundamentally starts with human beings that have this freedom. 

So, when Hawaii becomes less and less attractive, you have fewer and fewer people here [who] can work on solving the problems and creating the new ideas you need to be able to create this wealth around us.

And knowledge has this interesting characteristic that if someone comes up with an idea in San Jose or New York, that the knowledge can come to Hawaii, but what Hawaii’s missing out on is those individuals that are, that are here with us to help us in this discovery of new knowledge. 

When they leave, their ability to share and create ideas with people around them also leaves with them; so we’re losing this asset to another part of the planet.

Akina: Wouldn’t you say that Hawaii could in some ways be a laboratory, a petri dish, so to speak, for testing theories such as the theory as to whether or not population increase is bad for a place? 

There are — there’s no lack of individuals claiming that the resources of Hawaii are being used up rapidly and just can’t sustain a growing population here. What are we discovering about that?

Pooley: Well, what we discover is typically, when you have people and they have their freedom to be able to innovate, they discover more resources. You don’t use up resources; you create resources. 

So, Hawaii’s ability to attract population [who] are creative, [who] have imaginations, that asset that Hawaii has could be leveraged into creating an environment that’s much more open to, to this creativity and knowledge creation. 

This idea that if we add more people to the island — I mean, look at where the island was a hundred years ago compared to today, and ask yourself, “Is Hawaii richer today in terms of our standard of living, what our lives are like, than it was a hundred years ago?”

I wake up every morning, and I’m just, I’m just astonished that I live on a chain of semi-dormant volcanoes in the middle of the Pacific Ocean, and I have air conditioning, and I’ve got a Costco, and it’s just [chuckles] — and that’s all a consequence of human beings being able to adapt and be creative and be able to turn liabilities into assets, to be able to discover new ways of taking these liabilities and adding knowledge to them, and suddenly they become a very valuable asset to the rest of us.

Akina: Well, talking about energy and liabilities, you know, Hawaii has among the highest gasoline prices in the nation, and it just seems that the oil prices will continue to rise, and we’re dependent upon importing this. Are we going to forever pay higher prices at the pump?

Pooley: That’s possible, but is that due to, is that due to a fundamental physical challenge in energy, or is it due to a political environment? 

If you have the Jones Act, if you have other things that are going on politically on the planet that prevent this ability to acquire energy, you could have a challenge. 

I’ve always advocated that if Hawaii wants to be a laboratory, they should be a laboratory of a green, clean energy state [that] uses nuclear power. If we’re really concerned about lowering CO2 and minimizing the amount of land that’s necessary to create energy, it’s got to be nuclear.

The innovations recently with these micro, small nuclear plants — Hawaii could really lead the nation in, in how you can create an independent, an energy self-reliant and green place for growth using nuclear innovations. 

So, I mean, it’d be lovely if we had electricity rates that we knew were going to be, you know, at 10 and 12 cents a kilowatt hour instead of 30 and 40 cents a kilowatt hour like Idaho and some of these other places who have access to much lower energy costs. 

Hawaii has this ability to do this if they open themselves up to these emerging innovations that are occurring in the nuclear energy industry. 

I live up here at Laie and I see the windmills and the land that was used to develop that and what it looks like, and I just, — you take the most expensive land on the planet to build windmills that do not produce the kind of reliability that you need, that require redundant energy systems down on Honolulu to be able to support, it’s just really unfortunate.

Akina: You know, there are many metropolitan areas across the nation that benefit from the fact that large populations can come and go so that you have higher levels of commerce and diversification of industry and so forth. 

Do you think that the push to limit the population in Hawaii has a negative impact upon whether we can diversify economies and be less dependent upon merely one or two major industries?

Pooley: Right. When you limit the population, I mean, who are you going to limit? Who are you going to say can’t come to Hawaii? 

I think you’ve got to be open to the ideas [that] we want to be an attractive place for the most creative, innovative people on the planet to come and, and live and work and contribute here if possible. 

And people [who] have that kind of creativity are also going to want to live in a place where they have other people around them and they have services and resources that will give them the kind of life that they want to enjoy.

And when you limit the number of people, I mean, I had several of my friends that have left the island because they just — they lost their businesses through COVID, and they’ve had to leave. And it’s a tragedy that I think those people have left. The value that they were creating disappeared with them. 

So, Hawaii’s got to be open to the idea that we want to be this attractive, beautiful place for people [who] want to come in and create new value for the rest of us.

Akina: Well, Gale, many popular reviewers, including the Economist magazine or author Jordan Peterson have given positive reviews of “Superabundance.” 

What are the academics saying, and what are you also hearing in the media in general?

Pooley: Well, we’ve had, you know, a number of academics reviewed the book. 

We had several of our economists at Harvard had looked at the book, pre-publication, the manuscript, and we were, you know, very concerned that we had made a mistake somewhere in the analytical framework, or the equations, or that the data wasn’t sufficient. So, it’s gone through pretty heavy review from academic peers. 

And then it was reviewed by a couple of Nobel Prize-winning economists — Angus Deaton and Paul Roamer. We’ve also had a number of other, you know, academics that have looked at it. It’s not — we’ve also had Jason Furman, who was the chairman of the Council of Economic Advisors under President Obama; he reviewed it and gave it high marks. 

So, I think it’s really a message to everyone that, you know, irrespective of what what political party you might be affiliated with, the story is: This planet, human beings on this planet have been able to continue to increase our abundance through all kinds of these kind of tragedies — wars, recessions — we continue to grow at about 3 to 4% a year. 

And if you can grow at that rate, you’re going to double abundance every 20 years. And that’s what, that’s what the story is that I think we need to be able to recognize. This is what’s been happening, and if we can continue to do this going forward, we should expect this growth going forward as well.

Akina: Well, that’s certainly optimistic news for the world and for those of us in Hawaii. And I want to thank you and your co-author for the work that you’re doing in the book, “Superabundance.” 

Thank you so much for being on the program, again, and wish you the very best, Gale — my guest — Gale Pooley.

Pooley: All right, thanks.

Akina: Terrific. And everybody, this is ThinkTech Hawaii’s “Hawaii Together.” Until next time, I wish you a great Aloha.