[applause] >> thank you so much. we will see you across the hall. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> next, a form on the impact of economic growth and the foundation of freedom. after that, a look at the role of 89 to 29 year-old son in the election. been at another viewing of the discussion on civility in politics. tomorrow, foreign policies of presidential candidates that ronnie and president obama. our guest talks about the current doctor shortage and the impact the affordable care act will have on the. and another guest looks at the types of programs offered. that is live at 7:00 a.m. eastern on c-span. >> at the foot of that bridge, i was beaten. i thought i was going to die. i thought i saw death. >> in 1965, a 25-year-old john lewis took part in the voting rights march. >> we came within hearing distance of the state troopers. a man identified himself and said "in major john flowers." one of the and people walking beside me ask for a moment, and the major said the troopers should go to their house. >> sunday at 8:00 p.m. on c- span. >> mathematician and economist steven landsburg at the cato institute's economic summit. he talked about the innovation and economic growth during the industrial revolution. this is an hour and 15 minutes. -- an hour and 20 minutes. >> good morning. i've promised we would begin on time and we are nearly 23 seconds early. so we are off to the right start. a couple of quick points. we will have presentations, presenters will be up here or some place around here. for the discussion, we have to microphones and so if you want to pose a question, come on down here. if anyone had limited mobility, we want to make sure everybody can be included in the conversation. i recommend sitting nearby these microphones if that is an issue for if there are serious problems, we will make sure someone can bring a microphone to you. but i would rather not make that the standard. but again, if you have limited problem. our first presenter to get us off to the proper start is prof. steven landsburg. he is a mathematician by training but an economist by profession and passion. he is a great teacher and explainer of economics. in addition to his bio, he has a new edition of his wonderful book "the armchair economist" fully updated for the 21st century with data and update in contemporary examples. he blogs daily at thebigquestions.com. and he is nearly finished with another book, part of his wide- ranging interests, on the theory of relativity. steven landsburg. [applause] >> thank you. is the microphone working? good. i want to talk to you about economic growth. the story of economic growth begins about 100,000 years ago when modern humans first emerged. then we have the time line here. for the next 99,800 years or so, nothing happened. [laughter] there were some wars, some political intrigues, the invention of agriculture, the renaissance. but none of that mattered. none of that mattered in the sense that none of it had any appreciable effect on the quality of life for any substantial number of people. on the dawn of history, up until about 200 years ago, nearly everybody who ever lived right around the subsistence level. the modern equivalent of maybe $600 a year. there were times and places where it was better than that. even some extremely fortunate times and places where people aren't me be the equivalent of $1,000 a year per day -- $1,000 a year in today's terms. of course there were always tiny nobility's, kings and queens and dukes and princes who lived much better but they were numerically insignificant. if you had been born anytime prior to the industrial revolution, the odds are astronomical that he would have lived on the modern equivalent of $400, $600 or if you were extremely lucky, $1,000 a year, just like your parents, just like your grandparents, just like your children and just like your grandchildren. then a couple hundred years ago, something happened. incomes, and lease in the west, started to rise. by the year 1800, incomes were rising at about three-quarters of a percent per year. a couple decades later, that happened around the world. then it got better. just 20 years later, income or rising at 1.5% a year. this was unprecedented, this kind of sustained growth. it had never happened before in the history of the world. since 1960 in this country, per capita growth corrected for inflation has grown at about 2.3% a year. to translate those percentages into something concrete, let's think about what that means for a typical middle-class family. suppose that you are a middle- class person with a modest income of let's say $50,000 a year. at that 2.3% growth rate, if we continue at that rate, then in 25 years, your children will be earning the inflation adjusted equivalent of $89,000 a year. if we continue that growth -- growth rate, their children 25 years after that, will be earning the equivalent of $158,000 a year. that is the power of economic growth. if you extrapolated that out a little bit further, let's say another 400 years at 2.3% growth per year, then your descendants will be earning approximately $1 million per day, unless of course they rise above mediocrity and live a little better. i want to stress that these are not some future inflation ravaged dollars we're talking about. this is after corrections for inflation the equivalent of 1 million of today's dollars. i do not know if we will ever reach that 0.400 years from now but i do know that conservative extrapolation from a sentry's old trend, it is conservative because it assumes we are going to continue that 2.3% growth rate for the next 400 years whereas in fact what has happened is the growth rate itself has continually risen if you find this an impossible number, you might pause and reflect for a moment on how implausible your lifestyle would have sounded if i had tried to explain it to somebody 40 years ago. you might also meditate on the history of skepticism. in 100 a.d., he suggested there was no hope for future development. this is the history of per- capita income in the united states. united states is the medium growth country. our growth compared to other countries has been steadier and it has started earlier than most. on average, we are a pretty average country in terms of level of growth. this is all corrected for inflation. this is all to thousand $5. you can see that incredible market prosperity over the years. we have had some rocky years. this only goes up to 2010. that is the kind of thing that happens from time to time. it happens most spectacularly in the 1930's here we have the great depression. here is what happened -- incomes fell back to where they had been about 25 years before. people found it intolerable. they had to live the way their parents lived and they found it intolerable. they had to live at the level which there great-grandparents' would have thought -- thought on a manageable -- thought unimaginable luxury and they found it intolerable. that is a new idea. nobody before the industrial revolution thought that. today, we expect our cars and entertainment systems and our computers to keep dazzling us with something new every year. we expect that but the underlying expectation is new. here is something you never saw in the 18th century -- a politician asking are you better off than you were four years ago. nobody asked that because in the 18th century, nobody expected to be better off than they were four years ago. it did not just income. let's look at what has happened to our leisure time. 100 years ago, the average work week was 65 hours. today, it is 33 to read 100 years ago, 6% of manufacturing workers took vacations. today, it is virtually 100%. in 1910, 26% of 65-year-old men were retired and that is at a time when most men did not make to 65. of those who made it, they were really old. three-quarters of them were still working. today, 90% of 65 year old men are retired. tell labor was common in 1910 -- child labor was common in 1910. today in this country, it is practically unheard of. we are working less per week in fewer hours per year. the average housekeeper in 1910 spent 12 hours a day on laundry, cooking, sweeping, cleaning. today, it is about 1.5 hours. here is the typical housewife's laundry day in the year 1910. first, sheep took water to the stove -- she took water to the stove, moves on to the task of ironing using a heavy flat iron continuously heating it over the required 8.5 hours and miles of walking. by 1940, our heroine has a washing machine and her lawn today is down to 2.5 hours as she walked 665 feet. today, nobody spends 2.5 hours on the launch. you throw the laundry in. if you have a fancy machine, it e-mails you to let you know when it is done. [laughter] in 1900, most houses the not have central heat, did not have plumbing. though other routine tasks including lugging lumber around. the average american has gained six hours a week of leisure. that is the amount of time we spent in the office are commuting is down by six hours a week. that is the equivalent of getting seven extra vacation weeks per year. that is over the last 40, 50 years or so. so we are getting richer, we are working less and on top of that, the quality of the goods we buy is improving. if you doubt that, go pick up a 40-year old sears catalog and ask yourself if there's anything in there you want to buy. here are a couple of pages from a 40-year-old catalog. you can get this am radio. it weighs 2.9 pounds. one transistor comes with the battery. you could get this black and white camera which takes up to eight pictures. then he replaced the film pack which probably costs about -- about as much as the camera. you buy the separate flashbulbs. they come in packs of 12. when you run out of those, you have to replace those. the only thing is these pictures are misleading because you are seeing at the 40-year- old prices on there. we ought to correct those for inflation. those are what the prices are corrected for inflation. $128 for that transistor radio, $210 for that eight picture camera. i guarantee you it takes worst pictures them when you get off your iphone. it is not as electronics. it is products like health care. here is a shocking number -- if you look at the quality of health care in the poorest parts of africa today and if you control for the effects of aids, there is an argument for doing this and not doing it, but if you say aids is a special one time thing, this is not part of the general trend of health care, so i will take the effects of that out. then the health care outcomes we are seeing in the poorest parts of africa today measured by infrared mortality, life expectancy, anything you want to measure, are almost exactly the same as what we were seeing in the united states in 1975. 1975 in the united states, you were getting the same quality of health care that the poorest african art getting today. now i want to ask you, which would you rather pay 1975 prices for today's prices for today's health care? i venture to guess there is not an informed person in the world who would choose to go back to 1975. that has to tell you that for all the problems with our system and the hype about rising costs, health care today is a better bargain than it has ever been. the moral of all that is that increases in measured income, even phenomenal increases we have seen, grossly understates the story of how rapidly the world is getting better. henry viii had a much higher measured income than anyone in this room. he will have of england but i beg you he would get treated half as well for modern plumbing, a lifetime supply of antibiotics and access to the internet. along with all of that wealth we have generated, has come another brand new phenomenon -- wealth inequality. per-capita income in the united states is 70 times what it is in the poorest parts of africa. the world has never seen in equality on the level before. that is brand new. do you know why the phenomenon is new? because wealth is new. the reason we have all this inequality for the first time is that we have well for the first time and if you think inequality is a problem, it is worth reflecting that it is it leased a tremendously that this problem to have. it is the problem of how to divide up all this amazing wealth that nobody would ever predicted we would be able to generate in the first place. if you want to think about inequality, i want to keep -- mention a couple of things you want to keep in mind. nobody in the world today is poorer than they would have been before the industrial revolution. i know that because if you were poorer than he would have been before the industrial revolution, you would have starved to death by now. another thing to keep in mind is that economic growth is new. it is only a couple hundred years old. this process is just getting started. it started some places later than others and in some places, it has had fits and starts. but we have not begun to see the power of what economic growth can do on the world wide basis. and we should remember that in the long run, a rising tide lifts all boats. here is what economic growth has done for the poorest americans. but look at household below the poverty level. 98% have refrigerators. 67% have washers and dryers. 96% have color tvs. 75% of those have over 300 channels. i grew up with three black and white channels. 68% have air conditioning. many live in clients where air- conditioning is superfluous. 63% have internet access at home. these are households below the poverty level when you serve a people at that level and you ask them to you have enough food, 93% answer yes. do you have any smoke or boulders that bother you? 93% say no. medical needs? 86% say no. it is more difficult to lead the life of it for american then of most people in this room but it is the difference between that life and the like that everybody took for granted 200 years ago. beyond that, you remember those letter games i mentioned a little earlier. i said the average american has gained the equivalent of seven vacation weeks per year in the last 40 years. that has been distributed very unequally. the poorest americans have gained twice as much, the equivalent of 14 weeks of leisure. nobody would want to claim that these great increases in leisure fully compensate for the differences in income but it is also true that big increases in leisure are not nothing. we do not lose -- live by bread alone. our happiness comes not just from our income but are free time and the time we have to spend with our friends and our favorite tv shows. so let's -- it is worth keeping in mind that over the last 40 years, if you're worried about inequality, you might keep in mind that the big relative wearers -- winners in the incomy derby had been in the leisure derby and vice versa. one might also point out that the quality of the leisure is -- has been improving. 50 years ago, the rich man and the poor man spent their leisure time in different ways. now, the rich man and four men are surfing the same internet and watching the same 500 cable channels. so there has been a great equalization there. when we turn to asia and africa, they are the we did the poor there are considerably worse off than the united states but we are seeing in many places the same pattern as we saw in the west said back by 150 years or so. take a child labor, for example. in asia and many parts of africa, incomes are about the same as they were in the united states in the year 1840. and people send their kids to school -- to work at just about the same rates that americans did in the year 1840. moreover, we know historically that patterns in the west of how people pulled their kids out of the work force as their incomes rose above certain threshold levels. we are seeing the same patterns in africa and asia. you might have heard that child labor in the third world is caused by big multinational corporations doing their influence around and convincing people to send their kids to work against their own interests. if that is your theory, then you have to explain why americans and englishmen were sending their kids to work in 1840 at pretty much exactly the same rate at a time when there were no multinational corporations around. poverty is a terrible thing it means facing terrible choices, like should i send my kid to work or to bed hungry? poor people in various cultures at various times have faced those questions and have all settle them in the same ways. at certain levels of income, you send them to work, at higher levels, you take them out. it is the height of arrogance for those of gotten past that stage to look at other people who are now facing that and saying you ought to do it very different -- differently than we did. but a lot of americans take that you -- take that view. this is a 10-year old girl from bangladesh. it was taken in 1992. she lost her job as a result of legislation sponsored by senator tom harkin's that closed down factories in bangladesh that were not up to the standards that american lawmakers thought day off -- ought to be up to. about 50,000 children lost their jobs as a result. she was interviewed by an anti- poverty activist in bangladesh at that time. this was her take on this situation. we are poor and not well educated so they despise us. that is what they shut the factories down. there is one difference, though, between us and 1840 and the third world today. the differences that we were poor, there was nobody was which. there was nobody we could turn to for help. the poorest people today are turning to the relatively rich and asking for help. that raises the question of what ought we do about that? a hard question with a lot of aspects. i will not settle it for you today. i do want to say a few things you might want to keep in mind when you think about that kind of question. it is remarkable to me the extent to which arguments for income redistribution, either across the world or with in a country, are literary arguments. that is not a criticism. but they tend to be arguments based on literary anthologies, metaphors. i like arguments for metaphor. the arguments for redistributing income are very heavily metaphor laden. they say things like we ought to redistribute income because society is like a family or because society is like an insurance. i like metaphors. i also like taking seriously. let's look at those metaphors and see where they lead us. let's start with the family metaphor. here is how this metaphor goes -- society is like a family and we should redistribute income within that family because families do not allow one member to struggle while another prospers. that is almost a direct quote from the governor in new york. families cannot allow one member to struggle while another prospers. the problem with that metaphor is that families do allow one member to struggle while and other prosperous. they do it all the time. we know that from the data. in families where -- with our great income disparities, more often than not, parents divide equally. it is the final opportunity to redistribute income among the people you love the best. most people look at that opportunity and say i do not want to do that. i do not want to redistribute among those people. so if your goal is to make society more like a family to reflect the values that we observe, then your metaphor tells you that we should have less income redistribution, not more. a better metaphor in my opinion is the insurance metaphor. society is like a big insurance contract. and the story that people want to tell here is that before we were born, any one of us could the been born into any circumstances at all. we could of been born smart, stupid, ambitious or lazy, with great opportunities or with no opportunity to read if we had had the