2017 was a magnificent year
I am an optimist. A lot of you might already know that about me! There are two reasons why. One, it's a much more rewarding and fun way to live. And two, because it's the only thing that squares with the facts. Let me explain. Everything you read in the media is negative - we are bombarded with news of how bad everything is. Brexit, Trump, North Korea, financial collapse, environmental disasters, war, disease. It goes on and on. What most people don't realise is that by almost any index you look at, things are better today than they have ever been. We are safer, freer, more prosperous, cleverer and healthier than any one else who has lived.
Nicholas Kristov (a journalist who covers war, poverty and human rights abuses) wrote about this in the NY Times this month. It's well-worth a read (click here for the article). According to Kristov, every day the number of people living in extreme poverty falls by 217,000. Every day, 325,000 more people gain access to electricity. And 300,000 more gain access to clean water. Poverty, malnutrion, illiteracy, child labour and infant mortality are falling faster than at any other time in human history.
Yet nobody feels positive! We are surrounded by doom and gloom. This is an amazing fact. Fifty-eight per cent of those who voted for Britain to leave the EU said that life is worse today than thirty years ago! But really? Thirty years ago we didn't have the internet, cell phones, FaceTime, Amazon, solar power. You had to wait a week to get your photos developed, people smoked everywhere (offices, planes, pubs), you had to get your music on a cassette, Blockbuster had only just been founded and you had to go to the store to rent a movie and you got fined if you returned it late or not rewound, there were only a couple of TV channels. The thing is, as Johan Norberg writes in his book 'Progress', if we actually care to turn the clock back, the good old days were awful.
"Nothing is more responsible for the good old days than a bad memory."
- Franklin Pierce Adams.
We humans have seen transformational change in the last 100 years. Norberg says that we have made more progress over the last 100 years than in the first 100,000. And I for one, feel confident that this progress will continue. Yes, we have problems, but we do now have a good idea of the solutions. Humans are incredibly ingenious. We always find solutions. Just think about the phone by your side. Who would ever have imagined twenty years ago how much computing power we would be able to hold in our hands. And how about this as food for thought. As little as 65 years ago the city of London was brought to a standstill by a dense blanket of toxic smog that reduced visibility to a few feet for days, and killed 12,000 people. It was caused by the cheap coal that fired power stations back then. But guess what? Shortly after, Parliament passed the Clean Air Act which restricted the burning of coal in urban areas and London hasn't seen anything like that event again.
The media tells us that the world is going down the pan and the conditions are ripe for a massive stock market crash, but I am not sure that is the case. Yes we will see the stock market 'correct' at some point. I know that because it always corrects. When? Who knows. I could never promise to know that. But economic growth around the world is strong. In fact, 2017 was the first time this century that all the major economic basins of the world were growing simultaneously (a very unappreciated fact). Corporate earnings growth is also strong. The last month saw the largest increase to earnings estimates in recent memory. Things are good out there!
It's always important to remember why stock markets go up. Indeed it's always important to remember what stock markets are. They are collections of companies. The value of groups of companies (as a whole) goes up over time because of population growth, because of the growth of a global middle class and because of corporate board determination. It goes up because of progress. 2017 was by many measures a magnificent year, but I am certain that there will be many more years ahead that beat it.
My advice? Next time you read a story about the end of the world, just question the motive behind the story.