Unit 10 Women’s right to vote and the reduction in child mortality in the United States

10.15 Afterword

Our economy is all about people and what we do as buyers and sellers, borrowers and lenders, employees and employers. In this unit we have added two additional sets of actors: voters and elected leaders. We learn a lot about the economy by analysing actors—including voters and elected leaders—as doing the best that they can under a given set of circumstances, while also aiming to change their circumstances, often through political movements and governments.

Economics can help to adequately address the problems of inefficiency and unfairness in our economies, by designing policies that are both economically and administratively feasible. Economics can also play a role in making good policies politically possible: economic reasoning can have a powerful effect on public understanding of what can be done in the economy.

The capitalist revolution (which is the subject of Unit 1 in The Economy 2.0: Microeconomics) and the democratic revolutions described in this unit (extending individual rights, the rule of law, and the vote to all adults) have together produced the distinctive economic and political system under which most readers of these lines now live.

Section 2.10 of The Economy 2.0: Microeconomics shows how in Great Britain, starting in the late eighteenth century, advances in technology—the spinning jenny, the steam engine, and the power loom—dramatically raised the productivity of labour (Figure 2.18). But wages did not rise. It took at least half a century before changes in institutions—especially reducing the minimum amount of property required for the right to vote as well as government regulation of working conditions—allowed workers’ pay to begin to rise along with the productivity of labour. (Figure 2.18 explains how this happened.)

Today, innovation in the production of energy—solar and wind power particularly—are laying the technological foundations of an economy based on low-carbon electricity, enabling continued improved well-being worldwide. But as was the case in the nineteenth century for workers’ wages, the extent to which the new technologies will come to fruition and address the climate crisis depends on changes in institutions to accelerate the adoption of the new green technologies.

Section 2.11 of The Economy 2.0: Microeconomics explains that these changes may be difficult to implement. A degraded and threatened environment cannot be reversed by the same mechanism that allowed workers to share in the increased productivity brought about by new technologies.

During the nineteenth and twentieth centuries, workers were their own advocates in the political battles to raise their living standards. Their success in this—by gaining higher wages—made it profitable for owners of firms to develop and adopt new technologies using less labour relative to other inputs, including carbon-based energy.

But there is no similar process to raise the price of natural resources, leading to the development and adoption of green technologies. The biosphere does not have the vote; nor do future generations of humanity who will bear the heaviest cost of climate change. To address the challenge of climate change, today’s generation of citizens must become advocates for both the biosphere and for future generations.

Capitalism and democracy continue to change along with our place in the biosphere. Economics will help you understand how capitalism and democracy together are changing your circumstances, and how, in turn, you—with others—might participate in these processes of change.