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Measuring growth in knowledge

In earlier weeks, we established that growth in knowledge is the source of progress. How do we measure it? We can do so through 'time-prices'.
© Adam Smith Center, Singapore

In earlier weeks, we established that growth in knowledge is the source of progress. How do we measure it? We can do so through a ‘time-prices’.

Professor Gale Pooley and Marian Tupy have developed a new framework which look at the ‘time-prices’ of commodities, as a way to measure the growth in new knowledge over time. Time-price is the amount of time that an average human has to work in order to earn enough money to buy a commodity.

George Gilder argues that “Wealth is knowledge, growth is learning, and money is time.” From these three propositions we can derive a theorem: The growth in knowledge can be measured with time.

We buy things with money, but we really pay for them with our time. The true price of something is the time it takes to earn the money to buy it. Adam Smith noted in his Wealth of Nations that, “The real price of everything is the toil and trouble of acquiring it …. What is bought with money… is purchased by labour.”

With these insights, the Tupy-Pooley framework analyses time-prices of leading commodities over time, in an effort to ascertain if they have become more abundant or scarce.

© Adam Smith Center, Singapore
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