More People Mean More Genius Innovators

You also get enormous markets that can accommodate complex and expensive fixed-cost products.

Leonardo da Vinci (1452–1519) is considered by many to be the most brilliant person in history. He lived at a time when the global population was around 450 million. Knowing that IQ is distributed on a normal bell-shaped curve with an average of 100 and a standard deviation of 15, we can estimate that da Vinci, as one in 450 million, had an IQ of around 188.

With a population of eight billion on the planet, today we have 18 times more people than in da Vinci’s day. This means we should also have 18 times more geniuses. I nominate Elon Musk as one of those. So where are the other 17? Perhaps they aren’t as lucky as Elon, who was able to exit South Africa and make his way to Silicon Valley. (Note: the coauthor of Superabundance left Czechoslovakia and South Africa, landed in America, and was then discovered by me on Twitter. Thank heavens.)

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Steve Jobs’s biological father was Syrian. Imagine our world if Steve Jobs had grown up in Damascus instead of Silicon Valley. Or even better, ask yourself: How many Steve Jobses are in places like Syria today? Now imagine our world if everyone had the freedom and opportunity to achieve their potential and create value like Steve Jobs and Elon Musk.

More people also provide enormous markets that can accommodate complex and expensive fixed-cost products. Apple has spent an estimated $100 billion to create the iPhone. We can own one for $799, or about 21 hours’ work for a typical blue-collar worker earning $38 an hour in wages and benefits.

How can iPhones be sold so cheap if they cost so much? Because there are billions of us. $100 billion spread over 8 billion is $12.50 per person. The parts on the product cost Apple around $416. After paying other expenses, Apple’s profit margin is around 23 percent. We get to enjoy a $100 billion product and Apple makes $184. Behold the fruits of capitalism.

There is a reason the iPhone was created in the United States and not Venezuela or Cuba. As Professor Don Boudreaux notes, “Those who today call for socialism to replace capitalism are ignorant not only of socialism’s well-documented history of failure and tyranny, but also of the enormous benefits that capitalism inspires in creative entrepreneurs to deliver daily, and with disproportionate generosity, to the masses.”

We might believe Rep. Alexandria Ocasio-Cortez and Sen. Bernie Sanders are serious about socialism when they give up their iPhones.

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