Into the future

[A18]

A healthy dose of optimism from Forbes.com:

http://www.forbes.com/2008/01/13/dismal-economics-growth-oped-cx_ata_0116dismal_print.html

Forget the talk of recession. The world is about to enter a new era in which miracle drugs will conquer cancer and other killer diseases and technological and scientific advances will trigger unprecedented economic growth and global prosperity.

Pie in the sky optimism? Perhaps. But there are reasons to be optimistic, and they rest not on science fiction but within the badly misnamed "dismal science," economics.

To understand why economics triggers such optimism, imagine that there are two deadly diseases. One disease is relatively rare, the other common. If you had to choose, would you rather be afflicted with the rare or the common disease?

If you don't want to die, it's much better to have the common disease. The reason? The cost of developing drugs for rare and common diseases are about the same, but the revenues aren't. Pharmaceutical companies concentrate on drugs with larger markets because larger markets mean more profits.

As a result, there are more drugs to treat diseases with a lot of patients than to treat rare diseases, and more drugs means greater life expectancy. Patients diagnosed with rare diseases--those ranked at the bottom quarter in terms of how frequently they are diagnosed--are 45% more likely to die before age 55 than are patients diagnosed with more common diseases.

So imagine this: If China and India were as wealthy as the U.S., the market for cancer drugs would be eight times larger than it is today.

Of course, China and India are not yet as wealthy as the U.S., but their economies are growing rapidly, and with them, the market for new drugs. Cancer is now China's leading killer, with spending on treatment increasing by 17% per year. To be close to the Chinese market, AstraZeneca and Novartis are building major research facilities in China, which will benefit patients everywhere.

Like pharmaceuticals, new computer chips, software and chemicals also require large research and development (R&D) expenditures. As India, China and other countries become wealthier, companies will increase their worldwide R&D investments. Most importantly, as markets expand, companies and countries will put to work the greatest asset of all for the betterment of mankind: brain power.

Amazingly, there are only about 6 million scientists and engineers in the entire world, nearly a quarter of whom are in the U.S. Poverty means that millions of potentially world-class scientists today spend their lives trying to eke out a subsistence living, rather than leading mankind's charge into the future. But if the world as a whole were as wealthy as the U.S. and were devoting the same share of population to research and development, there would be more than five times as many scientists and engineers worldwide.

People used to think that more population was bad for growth. In this view, people are stomachs--they eat, leaving less for everyone else. But once we realize the importance of ideas in the economy, people become brains--they innovate, creating more for everyone else.

New ideas mean more growth, and even small changes in economic growth rates produce large economic and social benefits. At current income levels, with an inflation-adjusted growth rate of 3% per year, America's real per capita gross domestic product would exceed $1 million per year in just over 100 years, more than 22 times higher than it is today. Growth like that could solve many problems.

In the 20th century, two world wars diverted the energy of two generations from production to destruction. When the horrors ended, the world was left hobbled and split. Communism isolated much of the world, reducing trade in goods and ideas--to everyone's detriment. World poverty meant that the U.S. and a few other countries shouldered the burdens of advancing knowledge nearly alone.

The battles of the 20th century were not fought in vain. Trade, development and the free flow of people and ideas are uniting all of humanity, maximizing the incentives and the means to produce new ideas. This gives us reason to be highly optimistic about the future.

[Tetro Kornbluth]

You must be logged in to read this quote.

Those Jetpacks and Robots from the 1950s are well overdue. And where is my Moon Vacation?

You must be logged in to read this quote.

Apart from that part of the market which is too poor to afford the drug and is unable to get any from a competitor because the US wants to enforce its worldwide patenting laws.

You must be logged in to read this quote.

There are plently non-market reasons for this, perhaps researchers wants to research into common diseases is because they are the diseases which do the most common? (And if its capital, research and a "common disease" that is only needed, why has no cure to the common cold been found yet?)

You must be logged in to read this quote.

So imagine this: Both India and China having millions and millions of subsitence peasents who migrate to the cities to toil factories all day and lead unrewarding lives just so westerners can get consumer products cheaper and then read some self-justifying bullsh*t from the likes of Forbes..... Oh no wait, That's Reality!

You must be logged in to read this quote.

If history has taught us anything, it's that Betterment of makind does not equal "making more money for me".

You must be logged in to read this quote.

Sadly this is very true, Perhaps they would feel better if this guy from Forbes came up to them and said "You know you may too poor to have a serious opportunity at life, but don't worry thanks to the miracles of unfallable Free Market (TM) people you don't know in the future from countries which may not be yours which perhaps be able to achieve. But only if there Economy grows right."

Or then again perhaps not.

You must be logged in to read this quote.

Hasn't this guy heard of Scarcity? Are we looking at an "unlimited returns" situation ala the Internet circa 1998.

You must be logged in to read this quote.

Partially caused by the very forces described in this article

You must be logged in to read this quote.

Now we're into White Man's Burden terriority. If only the poors were like us..

You must be logged in to read this quote.

Osama Bin Laden Disagrees.

You must be logged in to read this quote.

Only if you believe in modern Economical Alchemy that is "OMG TEH FREE MARKET!1111".*

And it didn't even mention Global Warming. *sigh*



* - Interestingly enough the era of highest worldwide growth was the period 1945-1973; the golden age of Keynesian economics (Cue Bono talking about causation). Apart from that some well noted examples quite alot of the world (such as Subsaharan Africa) have actually gone backwards from that point.

[NDN]

How can we expect a booming global economy to continue if we're going to reach 9 billion people in the near future? That by definition is going to put enormous strains on resources. The US alone already consumes more than the rest of the world. That China and/or India are developing and could have a larger economy than us just makes the future of the world bleaker in the short term.

[Tetro Kornbluth]

How can we expect a booming global economy to continue if we're going to reach 9 billion people in the near future? That by definition is going to put enormous strains on resources. The US alone already consumes more than the rest of the world. That China or India are developing and could have a larger economy than us just makes the future of the world bleaker in the short term.

Because if we run out of a natural resource the free market will respond to incentives to create more of that resources though its magical and mystical ways.

So don't worry about all that Peak Oil stuff. The Free Market will find a way - it always does *.



* Except when it hasn't. Isn't that what learning about Externalities in Economics 101 is all about?

[Gabu]

The part I find kinda amusing is that I have a strong feeling that a good portion of that cancer is caused by China's massive pollution problems in their big cities and other similar results of their industrialization.  So yes, now that their economy is starting to take off, they can get down to the business of artificially solving the problems created by that boom.

[A18]

The article notes that with a larger market, potential revenues are also larger. Hence, costs being constant, profit-driven firms are increasingly directed to seek out cures for these common diseases. Put more technically, as the demand curve shifts rightward, the quantity of innovation supplied increases.

Your retort--that some individuals will nevertheless not be able to afford the drug (as opposed to before, when absolutely no one could)--casts no doubt on this observation whatsoever. It is also true that the cost of developing a cure does vary from disease to disease, but that is similarly beside the point; what matters here is simply that, ceteris paribus, a larger market results in a greater allocation of resources toward the end at issue.

Put another way, the greater output of foreigners means that our world catallaxy has room to pursue a still greater number of ends.

I do want to thank you for blessing my thread with some mindless demagoguery. "India and China hav[e] millions and millions of subsitence [sic] peasents [sic] who migrate to the cities to toil factories all day and lead unrewarding lives just so westerners can get consumer products cheaper."

Eh? Chinese peasants toil in factories in order to help us out? If so, God bless them; but I tend to think they're motivated by self-gain, as with the rest of us. In other words, they work because they benefit from the employment. Your rant verges on incoherent.

You agree that "[p]overty means that millions of potentially world-class scientists today spend their lives trying to eke out a subsistence living, rather than leading mankind's charge into the future." But these individuals, it is objected, can take little comfort in the notion that far into the future their descendants will lead better lives. Well, actually I think many would take comfort in that, but it is beside the point. No one said that they would; merely that the world's future is bright. As for the persons living today, they work for their present betterment, and indeed, countless numbers are emerging from dire poverty.

As for natural resources, obviously the market does not "create" resources. In strictness, no one but God can create matter. Rather, with the guidance of the price mechanism, we allocate those things that do exist in a more effective manner.

Let's take the concrete example of energy, and in particular oil. If demand increases and/or supply decreases, then of course the price of oil rises--perhaps even skyrockets. This is a signal for consumers to seek out alternatives and cut back on their personal usage, and for producers to find new sources of energy. If we lived in an entirely static world--say, one in which the only source of "energy" in some narrow sense were oil--and all of this oil were consumed, so that the supply of energy was perfectly inelastic over an infinite price range: then yes, we would be screwed. Even still, this would not be because of the market, but rather in spite of it.

Happily, that is not the world we live in.

[Person Man]

I think he is on to something....and it would be true but for this bottleneck! ...I think we need to research science and technology that expands our resource base. This means the development of nuclear, thermonuclear, solar and wind power. This also means more concentrated ways of growing food through farm towers and argicultural cloning. This also means space exploitation so that we can get more minerals. That's where the future is- space, bioengineering, energy and environmentalism. The point is to make our population more productive and to do that we need greater efficiency and greater access to resources!

[War on Want]

Such a sh**tty article. When morality is based on profits, as in the Capitalist system, not many can be moral and do the right thing. This article assumes all Corporations are awesome and will not exploit any hard working, foriegners.

[John Dibble]

And where is my Moon Vacation?

Who cares about a stupid Moon Vacation? Where the f**k is my god damned ROBOT MAID!?

[Person Man]

And where is my Moon Vacation?

Who cares about a stupid Moon Vacation? Where the f**k is my god damned ROBOT MAID!?

were actually getting close to the robot maid. Next year, there will be suborbital vacations. By 2020, we should have orbital vacations and fully-functioning mechanical homes.

[opebo]

Oh good lord - Forbes?  I'd rather hear about what was written on the sh*thouse wall.

[Person Man]

Oh good lord - Forbes?  I'd rather hear about what was written on the sh*thouse wall.

lol

[J. J.]

Oh good lord - Forbes?  I'd rather hear about what was written on the sh*thouse wall.

You want people to hear about you phone number?

[Хahar 🤔]

You must be logged in to read this quote.

Those Jetpacks and Robots from the 1950s are well overdue. And where is my Moon Vacation?

You must be logged in to read this quote.

Apart from that part of the market which is too poor to afford the drug and is unable to get any from a competitor because the US wants to enforce its worldwide patenting laws.

You must be logged in to read this quote.

There are plently non-market reasons for this, perhaps researchers wants to research into common diseases is because they are the diseases which do the most common? (And if its capital, research and a "common disease" that is only needed, why has no cure to the common cold been found yet?)

You must be logged in to read this quote.

So imagine this: Both India and China having millions and millions of subsitence peasents who migrate to the cities to toil factories all day and lead unrewarding lives just so westerners can get consumer products cheaper and then read some self-justifying bullsh*t from the likes of Forbes..... Oh no wait, That's Reality!

You must be logged in to read this quote.

If history has taught us anything, it's that Betterment of makind does not equal "making more money for me".

You must be logged in to read this quote.

Sadly this is very true, Perhaps they would feel better if this guy from Forbes came up to them and said "You know you may too poor to have a serious opportunity at life, but don't worry thanks to the miracles of unfallable Free Market (TM) people you don't know in the future from countries which may not be yours which perhaps be able to achieve. But only if there Economy grows right."

Or then again perhaps not.

You must be logged in to read this quote.

Hasn't this guy heard of Scarcity? Are we looking at an "unlimited returns" situation ala the Internet circa 1998.

You must be logged in to read this quote.

Partially caused by the very forces described in this article

You must be logged in to read this quote.

Now we're into White Man's Burden terriority. If only the poors were like us..

You must be logged in to read this quote.

Osama Bin Laden Disagrees.

You must be logged in to read this quote.

Only if you believe in modern Economical Alchemy that is "OMG TEH FREE MARKET!1111".*

And it didn't even mention Global Warming. *sigh*



* - Interestingly enough the era of highest worldwide growth was the period 1945-1973; the golden age of Keynesian economics (Cue Bono talking about causation). Apart from that some well noted examples quite alot of the world (such as Subsaharan Africa) have actually gone backwards from that point.

Thank you, Gully.

[Person Man]

What's funny is that it is our problems that will make us do well, not our rosy glasses.