Thursday, May 29, 2014

The Prosperity Pool

In this post from a couple of weeks back, Don Boudreaux explains how a simple little innovation in the way new shirts are packaged contributes to human well-being.  He employs an excellent metaphor that he developed years ago (in this post) called The Prosperity Pool.  It's powerful and easy to understand, and one everyone should bear in mind.  Here's a brief slice of the first article, though I strongly recommend you read both of his posts linked here:
Because substantial amounts of the enhancement of our standard of living are the results of the accumulation of benefits from a continuing series of very small individual improvements (such as the replacement of straight pins by these clips), statistics cannot adequately or accurately capture the full measure of these improvements.
Our prosperity pool grows not only when big infusions of wonderful new goods and services (such as the polio vaccine and the smart phone) are made but, also – and perhaps even more importantly on the whole – by the steady accumulation of myriad small improvements (such as this inauspicious clip).
Great example of why Boudreaux is such great economic thinker and an OLS hero!