We have a podcast!

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On Oct 19, the Josiah Bartlett Center for Public Policy in partnership with New Hampshire Journal launched a new podcast focused on New Hampshire politics and policy.

The podcast provides daily insights and analysis on topics directly related to the 2020 election so Granite Staters can have a better understanding of the issues facing the state this fall. Each episode features a free-market perspective on the top issues plus a guest to provide additional insight and context.

The podcast is available online here and on Spotify here. We’ll be up on more apps very soon, so check back here later in the week to see an updated list.

And if you don’t already subscribe to the Bartlett Center’s weekly email newsletter, The Broadside, do that here right now.

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N.H. is running out of places for our families, friends & coworkers to live

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The No. 1 reason people move to or stay in New Hampshire is not jobs or low taxes or the environment. It’s family, according to University of New Hampshire Granite State Poll results summarized in the New Hampshire Housing Finance Authority’s October Housing Market Report. 

New Hampshire’s strong economy gives our extended family members plenty of options for employment should they decide to stay or return home. Maintaining a vibrant economy is a way of keeping our families connected and close. But the other essential part of this equation is missing — where are they going to live? 

The coronavirus pandemic has made New Hampshire’s acute housing shortage even worse, data from the New Hampshire Housing Finance Authority (NHFA) show. 

Multiple news organizations have documented the run on houses in New Hampshire, Vermont and Maine as people flee cities for the safety of rural and suburban spaces with low infection rates. That surge in purchasers has spiked New Hampshire’s already high demand, driving prices to record levels. 

New Hampshire’s median home price reached a new peak of $335,000 in August, a 14% increase since last August, NHFA tracking shows. Sales are down 6% since January. Those numbers “reflect extremely low inventory levels, not a lack of demand,” the NHFA concludes.

“September 2020 listings in total have dropped 27% when compared to September 2019. As prices continue to rise, listings under $300,000 become scarcer; the number of homes below this price have decreased 37% from last year,” the authority’s October report details.

In September, there was less than a month’s supply of homes priced under $300,000 in the entire state. 

To put it another way, your child who wants to move home from Boston or Raleigh or Silicon Valley might have to keep that big-city salary just to afford a house in New Hampshire. 

The housing shortage is tighter this fall even though building permits for single-family homes rose by 24% from January through August. New Hampshire’s housing stock is so low that it will be years before we come close to building enough homes to satisfy demand. 

For rentals, the picture is even worse. Building permits for multi-family homes fell by 61% from January through August. As demand has surged, communities have clamped down on new apartment construction (or builders have given up even applying). 

For example, Bedford’s planning board in September rejected a proposal to build 200 market-rate luxury apartments in the town’s commercial zone on South River Road. Though the apartments would have brought more tax revenue and less traffic than a commercial development previously approved for the same lot, and would have made the town a profit after school and public safety costs were deducted, the board rejected it. Board members didn’t want more apartments, even though the data showed that apartments would have left the town financially better off than commercial development.  

Because local regulators continue to artificially restrict the supply of rental housing, rents keep rising. The median monthly rent for a two-bedroom apartment in New Hampshire rose 4.9% in the past year, to $1,413, NHFA data show. The state’s rental vacancy rate has risen a bit but remains below 2%. 

All of this means that if your children and parents want to move back to town, they will struggle to find a home. 

The NHFA’s report shows that almost three-fourths (73%) of New Hampshire home buyers are Granite Staters moving to another home within the state. High prices inflated by a severe shortage of new construction do not primarily hurt out-of-staters who want to move here for jobs. They primarily hurt Granite Staters. 

They also hurt New Hampshire employers. Fidelity and Sig Sauer this week announced expansions that would create more than 700 new jobs in the state. The shortage of housing in Southern New Hampshire will make it harder for those companies to fill those positions.  

New Hampshire’s families, workers and employers are in desperate need of new home construction, both owner-occupied and rentals. The situation has been worsening for years. At what point do all three go to their local boards and demand that they get out of the way and let builders build?

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Massachusetts banned the sale of flavored tobacco in June. What happened next was… totally predictable

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Massachusetts’ June 1 ban on the sale of flavored cigarettes is driving higher sales, and higher tax revenue, in New Hampshire, state and retailer data show. 

In Massachusetts, cigarette tax stamp sales fell vs. the same month in 2019 by 17.2% in June, 23.7% in July and 29.9% in August, the New England Convenience Store and Energy Marketers Association (NECSEMA) announced this week. 

In New Hampshire, cigarette tax stamp sales rose vs. the same month in 2019 by 55.8% in June, 27.3% in July and 17.2% in August, the association reported.

That’s a tax revenue gain of $16.48 million for New Hampshire and a loss of $31.88 million for Massachusetts. 

Those figures are for cigarette sales only and do not include other tobacco products or electronic cigarettes. 

Looking at all tobacco tax revenue, New Hampshire has seen large gains since the flavored cigarette ban took effect. 

Tobacco tax revenue in May was identical to the year before. Then in June it shot up by 43.3% over the prior year. Compared to the same month the year before, tobacco tax revenue was up by 12.1% in July,18.6% in August and a tremendous 56.8% in September. 

From June through September, New Hampshire tobacco tax revenue was up by $22.2 million over the same four months in 2019. The state’s new tax on electronic cigarettes does not account for this increase. The state collected a little more than $300,000 a month in e-cigarette taxes from June through September. 

State Department of Revenue Administration staff attribute significant tobacco tax spikes in March and April (24.8% and 30.6%, respectively) to smokers stocking up for the coronavirus lockdowns this spring. They believe the surge starting in June is driven by the Massachusetts ban.

“We think it has to be related to the menthol ban in Massachusetts, although we don’t have the data to affirmatively prove that,” Carollynn Lear, assistant commissioner of revenue, said.

The state Department of Revenue Administration doesn’t break down cigarette tax stamp revenue by type of cigarette. But convenience stores do, and their data tell the story. 

Among NECSEMA members, total cigarette sales in Massachusetts were down 24% in August but up 65% in New Hampshire and 17% in Rhode Island, the association reported this week. But flavored cigarette sales were up 91% in New Hampshire and 40% in Rhode Island in August. Flavored smokeless tobacco sales were up 175% in New Hampshire and 54% in Rhode Island in August, NECSEMA reported.

Predictably, the ban increased both cross-border sales and in-state crime. Convenience store owners in Boston said this week that street sales of now-illegal flavored cigarettes have become a nuisance.

Free-market organizations were not the only ones to predict that this would happen. Massachusetts officials predicted it too. 

The Massachusetts Multi-Agency Illegal Tobacco Task Force noted in its 2020 annual report, published in February, that it was considering the need for increased enforcement this year because “the Task Force expects there will be an increase in smuggling activity and black market sales” after the flavored tobacco ban begins. 

Exactly as expected, Massachusetts’ ban has ended the legal sale, but not the consumption, of flavored tobacco products in the state. As tobacco retailers and the state’s own Illegal Tobacco Task Force predicted, the ban has sent legal sales over the border and increased the criminal, black-market sale of flavored tobacco products in Massachusetts. 

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How would N.H. handle a presidential vacancy before the election?

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President Donald Trump announced on Friday that he had tested positive for COVID-19, raising several constitutional questions regarding the presidential election that is just weeks away. The Broadside, our weekly newsletter, which you can subscribe to here, spoke with N.H. Secretary of State Bill Gardner Friday morning to learn how various scenarios might play out under New Hampshire law.

First, if a president is temporarily incapacitated, the 25th Amendment sets out procedures for transferring power to an acting president, as explained here.

But what would happen electorally if the president of the United Staters should die or resign before the election on Nov. 3? (A president anticipating a grave illness or imminent death could resign before an election, immediately elevating the vice president to the presidency.)

In such a scenario, would ballots have to be changed? Would votes for Trump count? Would votes for Vice President Pence count? Gardner walked us through the various scenarios. 

“Some states, if the candidate dies the candidate remains on the ballot,” Gardner told The Broadside. “In this state, if the candidate dies after the Tuesday before the election, so it’s less than a week, then you don’t do anything. If it’s before that, the law has provisions for pasters over the name.”

Under state law, new ballots can be issued up to one week before the election. If a candidate for president were to die or withdraw from the race before the Tuesday before the election (in this case, Tuesday, Oct. 27, new ballots could be printed and rushed to polling places. State law (RSA 656:3) requires ballots to be sent “at least 6 days before” an election. 

Obviously, already issued absentee ballots could not be changed.

In the event that a nominated candidate withdraws, is incapacitated or dies before the election, RSA 655:38 and 655:39 establish that the candidate’s political party would choose a replacement. At the federal level, too, parties replace presidential nominees. 

The process of replacing a candidate on a ballot is governed by RSA 656:21, “Pasters; Substitute Candidates.” That law states:

“In the event that a candidate dies or is disqualified as provided in RSA 655:38 or 655:39, the name of the substitute candidate shall be printed on the state general election ballot. If the state general election ballots have already been prepared and time will permit, the secretary of state may authorize adhesive slips or pasters with the name of the substitute candidate thereon to be printed and sent to the town or city clerks representing the territory wherein the deceased or disqualified candidate was to be voted for. Such paster shall be affixed to the ballots as provided in RSA 658:34. The name of the substitute candidate shall be received by the secretary of state no later than the Tuesday prior to the election in order for a substitute name to be placed on the ballot.”

So what happens if a presidential candidate withdraws, is incapacitated or dies within a week of the election and there’s no time to put the replacement’s name on the ballot? The ballots won’t be changed, Gardner said.

But that’s OK for presidential elections since people don’t actually vote for presidents. 

Contrary to popular belief, your vote for a particular presidential candidate is not really a vote for that candidate. It’s a vote for a slate of presidential electors. (Constitutionally, there’s no such thing as “the popular vote” for president.)

As the Library of Congress explains: “When citizens cast their ballots for president in the popular vote, they elect a slate of electors. Electors then cast the votes that decide who becomes president of the United States.”

Constitutionally, a vote for President Trump is a vote for the Republican slate of electors. If President Trump were to resign or die before the election, citizens could still express their preference for the Republican nominee by checking Trump’s name on the ballot. 

Should President Trump win New Hampshire after dying or resigning, the state’s Republican electors would be free to cast their Electoral College votes for Mike Pence (who would already be president). Technically, New Hampshire’s electors can vote for whomever the party chooses as its replacement, or anyone else. No state law limits their vote.

“The electors actually can vote for whom they want,” Gardner said.  

That’s not necessarily the case in every state. Thirty-two states and the District of Columbia have laws requiring electors to vote for their party’s nominees. Each law is worded differently, so it’s not clear if all of those electors could vote for the vice president-elect as president. 

In the case of a president dying or failing to qualify for the office after the Electoral College vote, the 20th Amendment states that the vice president-elect shall become acting president. But if the president-elect dies between the election and the Electoral College vote, it’s less clear how the transition would work, given that so many electors’ votes are bound by state laws. 

As usual, the process is simpler and easier to understand in New Hampshire. Electors are free to vote for whomever they want. So in the case of a candidate becoming ineligible during or immediately after the election, there’s no constitutional issue here. 

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N.H. COVID deaths fall by 96% through September, hitting lowest level since March

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New Hampshire recorded only seven COVID-19 deaths in September, a 96% decline from May’s total of 176, and a 59% from August, state data show.

It was the third month in a row that deaths have fallen by more than 50%.

For the first time since March, when the state recorded three COVID-19 fatalities, deaths for the month stayed in the single digits. All deaths in September were of people over age 60.

New hospitalizations were almost flat, going from 21 in August to 24 in September. That is a 19% increase from month to month but represents an 81% decline since June’s peak of 121. 

Positive test results rose from 692 in August to 991 in September, a 43% increase that is largely an artifact of increased testing. Without expanded testing, almost all of those infections likely would have gone undetected.

Excluding tests done at the University of New Hampshire, the state tested an average of 3,8242 people per day in September, a 27% increase from August. 

But when UNH tests are included for the last week of September, the daily average jumps to 7,750, a roughly 156% increase from August.

Getting a precise daily average is challenging because the state only began including UNH’s numbers in its daily totals on Sept. 23. UNH reports that it has given 128,230 tests since July 29. Most of those came since late August when students returned to school, but the daily results are not listed with the state’s daily results to allow for precise calculation.

To illustrate the scale of UNH’s testing, the state recorded 90,208 tests in August and 115,280 in September, according to its published data. UNH’s 128,230 tests cover just three campuses, Durham, Manchester and UNH Law in Concord.

The bottom line is that through September the state has continued to have a very small number of COVID-19 hospitalizations and a pronounced drop in deaths despite the reopening of schools, colleges and businesses. The increase in positive test results has picked up some small clusters of cases, most notably at UNH, but has been driven largely by the substantial increase in testing.

Below is the state’s own chart tracking tests and positives, showing the rise in tests and the drop in the percent positive rate.

 

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Mask mandates and the urge to control

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Portsmouth’s City Council approved a mask mandate on a 7-2 vote last week. The city had fewer than five known active coronavirus infections the day the ordinance passed, meaning more councilors voted for the ordinance than there were active cases in the city, NH Journal pointed out. The city still has fewer than five known active cases.

Manchester aldermen are considering a mandate that would carry an absurd $1,000 fine. City Health Department Director Anna Thomas told aldermen the point of the ordinance would be to educate the public about the importance of wearing masks. 

No, the purpose of a public relations campaign is to educate. The purpose of a mandate is to force compliance. The purpose of a fine is to punish.

Manchester Community College charges only $215 per credit. For $1,000, you could take a course in the Health Sciences curriculum, say, Probability & Statistics, learn more about the value of mask wearing, and still have $140 left over. 

Manchester’s COVID-19 dashboard, as of Friday, Sept. 25, shows only 39 known active infections recorded in the city of 110,000 people. Most of those infections are in people who live outside the city. Manchester has only six active in-patient hospitalizations. Not one of them is a city resident, according to the city’s own data.  

This is hardly the basis for an ordinance compelling mask wearing on penalty of a $1,000 fine. 

Last month, Hanover, Lebanon and Enfield passed mask mandates, as did Durham, despite having few recorded infections. Nashua, the first N.H. municipality to pass a mandate, last week updated it to require that businesses refuse to serve customers who aren’t wearing masks.

The new language forces employees to confront customers, even if no one else is in the business, and even if the employee is a teenager who might not have the training or confidence to engage in such a confrontation. 

After months of declining infections, hospitalizations and deaths, the urge to impose mandates on the population is growing rather than shrinking. Municipalities are pushing forward with new or expanded mandates even when presented with evidence that the large majority of people already wear masks. 

Nationally, 85% of Americans say they regularly wear masks when in stores or other businesses. A casual walk in downtown Manchester or a trip to any area supermarket is evidence that most people already wear masks when outside the house. 

The new municipal mandates typically require that masks be worn within six feet of someone else. Yet the World Health Organization recommends maintaining one meter (three feet) of distance. The British Medical Journal has suggested basing distancing on level of risk, with outdoor, less congested places needing smaller distance requirements. But municipalities are acting as if six feet of separation is an unbreakable law of science that is universally applicable to all situations. It isn’t.  

Mandates are blunt instruments. They don’t allow for nuance or for in-the-moment decision-making. And they explicitly preclude people from using their own judgment in any circumstances. 

With a mandate, individuals, not trusted to make a good decision at any time, have their judgment entirely replaced by the judgment of elected officials. 

And so we have Granite Staters being subject to fines for not maintaining twice the WHO’s recommended distance, even when outside in non-congested spaces where the risk of spread is low.

The state confirmed on Thursday that only one case of COVID-19 has been linked to Bike Week, and not a single case has been linked to any other large, outdoor gathering, including two Trump rallies and a NASCAR race. Multiple Black Lives Matter protests did not cause an infection surge in New Hampshire. But the public is supposed to believe that two individuals passing on a sidewalk within five feet, 11 inches of each other is a public health emergency? 

The Josiah Bartlett Center has, from the start, recommended voluntary mask wearing based on the strong evidence that it reduces the spread of the coronavirus. We also recommended a state public relations campaign to encourage mask wearing.

Mandates, however, are not the same as education. Education informs, but does not compel. A mandate compels. It is an extraordinary measure to be reserved for the most extraordinary emergencies. Subjecting American citizens to fines as a means of “educating” them is an abuse of government power. 

The coercive power of government is not a tool with which to fine tune people’s sensibilities. It is a last resort to be deployed when all other options are exhausted and the consequences of inaction are most dire.

Too many elected officials consider their temporary access to the levers of power an entitlement that permits them to replace others’ judgment with their own, whenever they feel like it. 

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Reopening is putting N.H. back to work

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In May, some politicians and activists warned that reopening the state’s economy would be a public health disaster. Instead, it’s been an economic savior. 

New Hampshire employment fell by more than 151,000 from March to April as the economic shutdown tanked the economy, according to the federal Bureau of Labor Statistics. As of this week, the state has recovered approximately 61% of those lost jobs (more than 93,000). 

An estimated 689,750 Granite Staters were employed in August, the state Department of Employment Security reported this week. That’s an additional 14,270 people from the month before.   

The state’s unemployment rate fell to 6.5%, down from 8% in July. It remains below the national rate of 8.4%.

As this economic restoration has taken place, the state’s coronavirus infections have plummeted. The state recorded 692 new coronavirus infections in August, down from its monthly high of 2,505 in May.

New hospitalizations fell from a peak of 213 in April to 21 in August. Deaths fell from a peak of 176 in May to 17 in August.

As the Josiah Bartlett Center pointed out in our reopening guidelines published in April, the state would do best to apply the minimum intervention necessary and to focus on behaviors. Encouraging individuals to practice safe behaviors, such as mask wearing, would slow the spread of the disease while letting the economy open back up.

The state shifted from a prescriptive lockdown in April to more of a behavior-focused guidance model in May and June. As a result, the economy has undergone a recovery while reducing the spread of the virus.

 

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A September surge in coronavirus testing in N.H. finds no surge in the disease

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There was big coronavirus news for New Hampshire this week, and most of the media missed it. 

At his Thursday press conference, Gov. Chris Sununu displayed a graphic (pictured below) showing that the average number of coronavirus tests per day has more than doubled since mid-August. 

Fewer than 3,000 people per day, on average, were being tested in the middle of last month. This month the daily average has hovered around 7,000, peaking at nearly 8,000 last week before falling this week. 

What some last week portrayed as a worrisome increase in infections is largely explained by expanded testing, mostly at colleges. 

The University of New Hampshire has been testing students twice a week since the start of school in late August, but only the positive test results had been reported in the state’s official numbers. 

Without those thousand of negative test results, the state’s reported numbers appeared to show an increase in the positive test rate. 

In fact, the positive rate has been falling. Instead of ticking up to around 1.5%, it has dropped to around 0.5%. 

State epidemiologist Dr. Benjamin Chan said Thursday that the increase in positive tests does not represent a surge or an acceleration in the infection rate.  

“We believe some of the increases we are seeing to a large part is because of the increased testing we are seeing,” Chan said. “We are seeing the numbers of people with COVID-19 go up in the younger age groups, and that is directly attributable to the testing strategies that are out there at colleges and universities.”

There have been a few small clusters, two at UNH, but they’ve been isolated. Some infections might not have happened without colleges reopening, but the reopenings have not caused a case surge. 

As of mid-September, the reopening of businesses and schools has not caused worrisome levels of community transmission or triggered any indicator that would lead to a reversal of the state’s reopening plans. 

Media coverage of the state coronavirus briefings continues to focus on daily and total numbers, often missing the larger context. The best news coverage of Thursday’s news came from Patch’s Tony Schinella, who understood the story. 

We would also point out that on Tuesday the Josiah Bartlett Center was the first to note the signfiicant increase in testing in September. We pointed out that some of the rise in infections could be attributed to the additional testing. The state would not include UNH numbers for two more days, so we caught only the uptick in the state’s reported numbers. 

UNH has conducted more than 86,000 tests, Dr. Chan said on Thursday. Its daily average from Sept. 2-Sept. 8 was 3,300. (UNH keeps its own COVID dashboard.) In September, the state has averaged 3,575 tests per day, excluding the UNH tests. 

As these tests have uncovered new infections, the state’s COVID-19 hospitalization rate has fallen from 10% at the end of August to 9% just over two weeks later. As of Thursday, the state has recorded only six COVID-19 deaths this month. It recorded 17 in August, down from 44 in July. 

As of September 17, there are only eight current hospitalizations for COVID-19 in New Hampshire. No county has even 90 known active cases, and four counties (Cheshire, Coos, Grafton and Sullivan) have fewer than 10. Only three municipalities have more than 20 known active cases: Durham (23), Nashua (23) and Manchester (32). 

So halfway into September, the news continues to be positive. Increased testing has uncovered some new infections, including several small clusters, but there is no surge. Hospitalizations and deaths continue to trend downward. 

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Halfway through September, COVID-19 hospitalizations, deaths continue to fall

The first two weeks of September have seen a noticeable increase in positive tests for the SARS-CoV-2 virus in New Hampshire, coinciding with an increase in testing and the reopening of schools and colleges. Yet hospitalizations and deaths from COVID-19 have continued to decline during this time, state data show. 

Media reports have tended to highlight the increase in positive test results while giving less attention to the continued downward trend in hospitalizations and infections. The significant increase in tests given per day has gone largely unnoticed. 

New Hampshire recorded 439 new infections from Sept. 1 through Sept. 14, after recording 692 new infections in the month of August. If infections continue at the same rate through the rest of the month, the state would see approximately 941 infections for September. That would represent a 36% increase over the previous month. 

The increase in infections is partly explained by a sizable increase in testing. The state recorded an average of 3,027 tests per day in August. So far this month, the state has recorded an average of 3,575 tests per day, an 18% increase. 

The increase in testing can explain some but not all of the rise in infections. Some additional spread appears to be occurring. That was to be expected with the reopening of schools and colleges. The notable development is that hospitalizations and deaths have continued to fall as infections have risen. 

In the first two weeks of September, the state recorded only seven new hospitalizations and four deaths. 

The state recorded 21 new hospitalizations in August. If September’s trend continues for the rest of the month, the state would finish September with a 33% decline in hospitalizations from the previous month.

At the end of August, the state’s COVID-19 hospitalization rate was 10% (meaning that 10 percent of all people who had contracted the virus since testing began in the spring had been hospitalized). By September 14, the hospitalization rate had fallen to 9.3%.

In August, the state recorded 17 deaths, a 61% drop from July and the lowest monthly total since the state began recording COVID-19 deaths in March. In the first two weeks of September, the state recorded only four deaths. 

If this trend continues, the state would end September with only 8 deaths, for a 53% decline from the previous month. That would be the second straight month in which COVID-19 deaths fell by more than half. 

These numbers don’t prove that bad numbers won’t come later this fall. Some schools are just reopening, and the weather is only beginning to turn cool. It’s possible that infections will continue to rise into the fall, and hospitalizations and deaths will begin to track with that increase.

But September’s numbers so far are not alarming. Two weeks after a large rally for President Trump in Londonderry (Aug. 28) and Bike Week in Laconia (Aug. 22-30), the state has not identified an outbreak connected to either event. And the rise in new positive test results has not coincided with an increase in cases severe enough to cause either hospitalization or death.

The next few weeks will give us a better picture of the effect of those events and of the reopening of schools and colleges. But for now, September is looking better than many people expected. 

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Without innovation, labor can’t generate progress

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The weekend has arrived when Americans play for three days while politicians give speeches and issue press releases recognizing the economic contributions of the American labor movement. 

Labor’s contributions are worth recognition. But have any politicians ever acknowledged that laboring in isolation produces nothing beyond basic subsistence? For labor to generate human progress, it has to be mixed with innovation. Yet we have no holiday for the innovators.

Our prehistoric ancestors labored for thousands of years with no economic advancement. The discovery of agriculture produced some wealth, but humans then labored on farms for millennia with only periodic and temporary spurts of economic growth. Technological innovations would sometimes lead to bursts of productivity that would improve living conditions, but those would fade relatively quickly. 

Not until the Enlightenment and the Industrial Revolution did humans suddenly begin to generate huge and sustained gains in living standards. This chart from Our World In Data shows how everything suddenly changed in the late 18th and early 19th centuries. 

Scholars debate what caused this explosion of economic progress. But economist Deirdre McCloskey makes a compelling case that it was a change in human thought that gave birth to the miracle of modern growth. 

A change in how people honored markets and innovation caused the Industrial Revolution, and then the modern world. The old conventional wisdom, by contrast, has no place for attitudes about trade and innovation, and no place for liberal thought. The old materialist story says that the Industrial Revolution came from material causes, from investment or theft, from higher saving rates or from imperialism. You’ve heard it: “Europe is rich because of its empires”; “The United States was built on the backs of slaves”; “China is getting rich because of trade.”

But what if the Industrial Revolution was sparked instead by changes in the way people thought, and especially by how they thought about each other?

She goes on…

Economists and historians are starting to realize that it took much, much more than theft or capital accumulation to ignite the Industrial Revolution—it took a big shift in how Westerners thought about commerce and innovation. People had to start liking “creative destruction,” the new idea that replaces the old. It’s like music. A new band gets a new idea in rock music, and replaces the old if enough people freely adopt the new. If the old music is thought to be worse, it is “destroyed” by the creativity. In the same way, electric lights “destroyed” kerosene lamps, and computers “destroyed” typewriters. To our good.

McCloskey has documented how the Enlightenment changed the way people think about work, creativity, invention, innovation, commerce and markets. Work and self-sufficiency were elevated in status, but so too were trade and commerce, finance and innovation. 

In short, market capitalism was slowly recognized as a way for ordinary individuals to improve their station in life. And that changed humanity, unleashing an unprecedented era of sustained economic and cultural progress.

People began to realize that there were ways to advance from one social rank to the next, and those ways involved not working harder, but working smarter. 

Enlightened American gentlemen in the late 18th century did not content themselves with continuing to work as their fathers had. They became obsessed with experimenting, tinkering and inventing. This was not confined to geniuses like Ben Franklin and Thomas Jefferson. 

George Washington experimented with new agricultural methods, invented a new type of threshing barn, and helped develop the American Foxhound. 

The spirit of the age sparked a wildfire of imagination, leading to inventions from ordinary people who sought to improve their own lives and the lives of others.

In 1764, an illiterate weaver and carpenter named James Hargraves invented the Spinning Jenny, helping to spark the Industrial Revolution. He was a nobody, but he’s the one who turned his town into a boomtown. 

Pennsylvania farmer Jacob Yoder invented the flat-bottomed boat in 1782. About 1785, uneducated Delaware businessman Oliver Evans invented the automatic flour mill.

The examples go on and on. A common theme is that the people who created the devices that allowed humanity to lift itself up from subsistence farming tended to be lowly tinkerers with little or no social status.  

These tinkerers, inventors and innovators created the factories and machines that created the labor movement, which Americans are supposed to celebrate this weekend. Yet we have no holiday for the innovators. Their contributions are mostly forgotten, their achievements taken for granted. 

Our culture assumes that prosperity and progress are humanity’s baseline. We have grown up in an advanced civilization with plentiful food, clothing and shelter, and with luxury goods so abundant that even people we consider poor have flat-screen TVs, smartphones and automobiles. We assume this is the way things always have been.

It was not. This is a recent human creation. Yes, labor made the factories, the railroads, the highways possible. But the innovators gave labor the tools with which they built our modern world. If we want to preserve the progress we’ve made, we should recognize and celebrate the innovators too. 

Innovation, not labor, was the foundation of the Industrial Revolution. Labor, a critical component, came after. And it came because industrial life promised greater economic progress than life on the old family farm.

We can stimulate more progress by encouraging more innovation. If we forget its foundational contribution, we will only make additional progress harder. 

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