Technologies affect living standards in three ways

Technologies affect living standards in three ways

Kamala Sarup

The direct causes of per capita income and living standard increases are technologies, new and old. These are the tools, machines, materials, power sources, medicines, and manufacturing and commercial practices) that are transformed into consumable goods and services comprising basic living standards that are summarized in per capita income statistics.

Technologies affect living standards in three ways: (1) They create goods and service that people want, but don't have. Automobiles, telephones, most medicines and medical care did not exist at one time, but were created by innovators. (2) They improve the quality of goods and services that people already have. Medicines, foods, clothing, medical care are improved compared to those available in former times. (3) They increase the availability of goods and services to more people by reducing the effort, waste, and cost to produce them.

Food, clothing, housing, medicines and medical care became cheaper and, simultaneously, their quality improved since earlier times. Technologies and associated incomes devoted to preventing people from killing and stealing from each other, i.e., judiciaries, prisons, police and military personal and institutions, restrict their being used to raise incomes and basic living standards, so however necessary they are in a world of aggression and acquisitiveness, they are counterproductive to raising incomes.

There are other ways to increase per capita incomes, of course, but they are limited. But as an alternative, a poor country that wants to be richer cannot expect to develop its own technology.

That would futile because it would take a very long time, and in the meanwhile, the rich countries would have obsoleted it with newer technology, or else conquered the country with its more advanced military technology to use its land and resources for the people of the conquering country. Therefore, a poor country like Nepal must import technology that produces more and better goods and services for its own people and for producing goods and services for trade with foreigners.

This acquisition of technology requires large amounts of money ("capital"), which cannot be accumulated at home because that requires technology. It's a vicious cycle: technology depends on capital, which depends on technology, etc.

However, its geographical disadvantage is offset by its geographical location at former trade routes between rich countries that allowed it to accumulate sufficient capital and technology to "move mountains" (or, at least penetrate them with tunnels and cross the valleys with bridges) and prosper. The Balkan countries in southeastern europe enjoyed no such advantage and suffered economic stagnation. Switzerland also has the advantages of culture, economy, and polity. If Afghanistan and Tibet were included, they would, no doubt, also fall into this group for the same reasons.

In particular, countries with too many mountains and too few waterways are unlikely to become richer relative to other countries, although they certainly will become absolutely richer because of the inevitable trade of cheaper goods and services provided by their richer neighbors.

The use of technologies depends not only on geography and culture, but also on the economy and polity of nations. Subsistence economies, like those of the nations' aboriginies, resulted in their subjugation and doom by people with more advanced economies that featured the division of labor, technologies, and trade, i.e., capitalist economies.

It is clear that a country with an unfavorable geography, or culture, or economy or polity is severely handicapped to make sufficient technological advances that increase the wealth and living standards of its people. It is likely to remain poor, despite the enthusiastic and sanguine projections of its leaders, and planners.

Copyright Kamala Sarup