The Poor Shall Inherit the Earth

Russ Roberts recalls his excellent interview with Thomas McCraw about his recent biography of Joseph Schumpeter. Schumpeter was a great, insightful economists who grasped the essential elements of capitalism.

Roberts quotes Schumpeter, saying

Queen Elizabeth owned silk stockings. The capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within reach of factory girls in return for steadily decreasing amounts of effort.

People often forget that the most money in capitalism is in pleasing the masses, not only the rich or well-to-do. It is certainly a victory a great feat that Philo Farnsworth invented the television. Cynics might comment, though, that only the rich could afford them. Which is why it is far more grand, far more impressive, that capitalism made them commonplace. That is the great success story: not the creation of wonders but the process of making those wonders so common, they are mundane.