Executive Summary:
A curiosity of the current US economy is its remarkable strength despite an affordability crisis. Average real consumption per household and real hourly earnings of production and nonsupervisory workers are at record highs, but plenty of people fall short of the average. When entrepreneurial capitalism is flourishing, Dr Ed explains, the wealthy benefit faster. … Entrepreneurism is flourishing currently, as record-high proprietors’ income and new-business applications attest. Yet it hasn’t boosted employment to the degree expected. In the past, profitable companies had to increase both capital spending and payrolls in order to expand. Now, the former may be enough: Investments in new technology have boosted productivity so much that new hires are less necessary. ... Check out the accompanying chart collection.
Profits I: Record Highs
In my 2021 book In Praise of Profits!, I quoted David Ricardo as follows: “Nothing contributes so much to the prosperity and happiness of a country as high profits.” Today, in the United States, profits are at a record high. So why aren’t we happier? There are lots of answers to this question. In my book, I wrote that “inequality is an inherent consequence of capitalism” and that “capitalism causes the most income inequality during periods of prosperity.”
I added: “The rich do get richer, but almost everyone’s standard of living improves during good times. However, the wealthy get richer faster than everyone else. Entrepreneurs get richer during periods of prosperity by improving the standard of living of their customers. They do so by improving the quality, and lowering the prices, of the goods and services they offer and by creating...
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