Why We Should Be Optimistic On The Future

I often discuss how I believe the financial landscape of the world will change over the next few years. It is always important to remember that even if the worst case scenario occurs, a global derivatives meltdown (the equivalent of nuclear war in the real world), at the end of the day we are only talking oceans of digital currency that has been (electronically) printed into thin air.

The world is not going to end. Almost everyone is not going to die, and if it were to occur the world as a whole would be far better off just a few years later (We would transition into the next global monetary system most likely backed by the IMF with a portion of the system involving a gold standard. Any system that limits endless money printing funneled into large banks and government spending which only benefits a small portion of the economy will raise the living standards for everyone).

The world is going to be different over the next decade. Some people will profit immensely from the changes. Most will be caught off guard and see their living standards or total wealth diminish in the short term.

However, under the current global monetary system dominated by government spending and money printing which continues to be an anchor on the global economy's long term potential, there is a real economy composed of capitalists working hard every day to make the world a better place in the future. After the next collapse, when (hopefully) governments and central banks get further out of the way and remove some of the anchors currently in place, the progress of these capitalists will only move forward at a more rapid rate.

Let's look at 11 great reasons to be cheerful on the future from Matt Ridley, courtesy of AEIdeas:

1. Income. The average person on the planet earns roughly three times as much as he or she did 50 years ago, corrected for inflation. If anything, this understates the improvement in living standards because it fails to take into account many of the incredible improvements in the things you can buy with that money. However rich you were in 1964 you had no computer, no mobile phone, no budget airline, no Prozac, no search engine, no gluten-free food. The world economy is still growing every year at a furious lick — faster than Britain grew during the industrial revolution.

2. Life Expectancy. The average person lives about a third longer than 50 years ago and buries two thirds fewer of his or her children (and child mortality is the greatest measure of misery I can think of).

3. Food. The amount of food available per head has gone up steadily on every continent, despite a doubling of the population. Famine is now very rare.

4. Disease. The death rate from malaria is down by nearly 30 per cent since the start of the century. HIV-related deaths are falling. Polio, measles, yellow fever, diphtheria, cholera, typhoid, typhus — they killed our ancestors in droves, but they are now rare diseases.

5. Education and IQ: Education is in a mess but consider: far more people go to school and stay there longer than they did 50 years ago. Besides, through a mysterious phenomenon called the Flynn effect, IQ scores keep going up everywhere, especially in those topics that have least to do with education, probably thanks to better food, richer upbringing and so forth.

6. Environment. The air is much cleaner than when I was young, with smog largely banished from our cities. Rivers are cleaner and teem with otters and kingfishers. The sea is still polluted and messed with in every part of the world, but there are far more whales than there were 50 years ago. Forest cover is increasing in many countries and the pressure on land to grow food has begun to ease.

7. Charitable Giving. We think we are getting ever more selfish, but it is not true. We give more of our earnings to charity than our grandparents did.

8. Crime. Violent crimes of almost all kinds are on the decline — murder, rape, theft, domestic violence. So are capital and corporal punishment and animal cruelty.

9. Tolerance. We are less prejudiced about gender, homosexuality and race. Pedophilia is no more prevalent, just hushed up less.

10. Political Freedom and Democracy. Despite all the illiberal things our governments still try to do to us, freedom is on the march. When I was young only a few countries were democracies; the rest were run by communist or fascist despots. Today there’s only a handful of the creeps left — they could all meet in a pub: fat Kim, Castro the brother, Mugabe, a couple of central Asians, the blokes from Venezuela and Bolivia, the Belorussian geezer. Putin’s applying for membership. The Chinese one no longer shows up.

11. Weather. The weather is not getting worse. Despite what you may have read, there is no global increase in floods, cyclones, tornadoes, blizzards and wild fires — and there has been a decline in the severity of droughts. If you got the opposite impression, it’s purely because of the reporting of natural disasters, which has become a lot more hysterical. Besides, thanks to better infrastructure, communications and technology, there has been a steep decline in deaths due to extreme weather. Globally, your probability of dying as a result of a drought, flood or storm is 98% lower than it was in the 1920s (see chart above).