At COSM 2021, business studies prof Jay Richards of the Catholic University of America spoke with Gale Pooley, also a business studies prof at Brigham Young University-Hawaii, on a fact we don’t hear much about in popular media focused on current events: Increasing knowledge and the subsequent dropping over of time prices have ushered in a vast improvement in standards of living.

Many will ask, what about rising prices? Well, for example, we must compare rising prices due to various global events today to what things cost in the past:

At COSM 2021, Pooley focused on the fact that, in real-world economics, the value of our time is the most critical factor we need to figure in:

Brigham Young University business prof Gale Pooley figures that not only does time drive the bus but economics is much easier to understand if we take that fact seriously. That was one key point in his wide-ranging talk at COSM 2021 yesterday, “Knowledge vs. Doom.” As we all struggle with inflation, it’s worth looking at the money we earn simply from the perspective of how much of our time was spent earning it:

“Money is time” essentially means that we buy things with money but we really pay for them with our time. Instead of dollars and cents, we can use hours and minutes to price things. We can use “time prices.”

As he told the audience, Yale University economist William Nordhaus developed a time price metric which he explained by a simple illustration. In 1830, it cost three hours of work at an average wage to buy an hour of light, that is, candlelight. What did that mean in practice?:

“In a diary entry of May 1743, the president of Harvard University, the Reverend Edward Holyoake, noted that his household had spent two days making 78lb (35kg) of tallow candles.

“Six months later, he noted: ‘Candles all gone.’

“And those were the summer months.” – Tim Harford, “Why the Falling Cost of Light Matters” at BBC World Service (February 6, 2017)

Needless to say, through new technologies, the cost of light has dropped dramatically since then for most people in the world. Pooley, citing tech philosopher George Gilder, sees the light metric as an illustration of the fact that wealth is, essentially, knowledge put to work. Neanderthal man had all the resources we do today but did not have the knowledge to take advantage of most of them.

News, “Economics as if time, not money, drives the bus” at Mind Matters News (November 12, 2021)

Pooley had spoken at COSM 2019 on the fact that the world is not running out of resources. Here’s a snippet from his dialogue with Jay Richards at the time:

The discussion turned finally to the way knowledge differs from material commodities and why that difference is key to the production of new wealth.

Gale Pooley: … knowledge has this other characteristic that when I share it with you, I don’t lose it.

Jay Richards: Yeah. It’s non-rival, as economists say. You didn’t use it up.

Gale Pooley: Yeah. Both of us can enjoy it at the same time. In fact, when we do that, a lot of times we both are better off. Many population growth doomsayers have compared Earth to a lifeboat onto which we can’t admit more people (and from which we may need to eject some).

Julian Simon also argued, “Look, you’ve got these people that have this creative ability. If they have the freedom to create, they’re going to solve these problems of putting people on the boat… One of those people, when you put them on the boat, they actually figure out how to make the boat bigger.”

Jay Richards: Or build more boats.

Gale Pooley: Right. And we’re making the boat bigger much faster than we are adding people to it. Yeah, population is growing, but our ability to actually create these things, create resources almost out of nothing … it’s out of knowledge that we create them.

News, “Business prof: Stop it! The world is running out of stuff” at Mind Matters News (August 7, 2020)

Note: Julian Simon (1932–1998) was a famous mid-twentieth century economist who argued against the widely held contention that the world was running out of resources: “Pooley is the co-creator of the Simon Abundance Index, named in honor of economist Julian Simon, who challenged Paul Ehrlich‘s claims in the latter half of the twentieth century that mankind would run out of resources as the population increased. To the contrary, Simon argued, data suggests the opposite: resources abound as the population grows.”

– Caitlin Bassett, “Scarcity? We have the same resources as Neanderthal man?”, Mind Matters News (September 3, 2021)

Here’s the full play list to date.

You may also wish to read:

Economics as if time, not money, drives the bus: Business prof Gale Pooley told COSM 2021 that the information society has vastly increased the goods that our time will buy by increasing and automating knowledge.
We will cope with inflation better if we understand that wealth is knowledge, growth is learning, and especially — money is time.

and

Business prof: Stop it! The world is not running out of stuff. A famous bet between two top thinkers settled that a long time ago. BYU Hawaii’s Gale Pooley tells us, we’re not creating more atoms but we ARE creating the ability to make these atoms smarter.