The populations of the advanced economies are today the richest and freest people the world has even known.  We enjoy unprecedented levels of personal health, longevity, mobility, safety, education and amenity.  We can say with confidence that the problems of obtaining and securing prosperity and freedom—humankind’s central problems from the dawn through the 20^th century—have now essentially been solved.

They have been solved by science and technology, and improvements in social, legal and economic institutions, which is to say by intellectual endeavor, trial and error, and the passage of time.  We could lose the solutions through war or catastrophe, but they are now existent knowledge, part of the evolved genome of human practice.  That is the real millennium story.

Some of the economic and technological causes of our prosperity now go under the rubric of “the new economy.”  For most of history, the critical factor of production was land and, for the past century or two, physical capital.  Now it has become human capital—intelligence, skill and information possessed by individuals and groups—which is more dynamic and presents fewer barriers to social mobility than the possession of land and physical capital.

Advances in communications and data processing are dramatically enhancing the scope and efficiency of markets, by reducing production and distribution costs in virtually all economic sectors, and yielding huge benefits in consumption as well, with no end in sight.

Due in part to market and technological developments such as these, and in part to improvements in public policy (especially monetary policy), the business cycle has greatly moderated in amplitude and frequency over a period now exceeding 50 years.

But another cause, and probably a more significant one, is the new acceptance of an old set of political ideas and institutions, those of classical liberalism.  A century of heated political contention and practical experience has yielded a remarkable consensus on the social benefits of private property and free markets, as dramatized by the collapse of Soviet communism and third-world socialist ideologies.

This consensus is now embodied in the embrace of market economics by most of the left-of-center governments in office in the West, the recent reregulation in New Zealand being a conspicuous exception.  It is not that the impulse to gain and exercise power has gone away, but rather than socialism has been shorn of its fancy idealistic dress and lose the moral high ground. 

And that is because capitalism has proved to be superior to socialism at precisely the thing that socialism claimed to do best: improving the lot of the common man and woman.  If we are all capitalists now, it is because we moderns—right, left and center—are all deep-dyed egalitarians and capitalism is revealing itself to be the most egalitarian of regimes.

To be sure, the distribution of income within the advanced economies has become somewhat less equal in recent decades, and this trend is decried by editorialists and politicians eager to keep the old-time redistributionist religion alive.  But annual income is an incomplete and increasingly misleading measure of real life circumstances in societies. 

Today, average income is so high that the necessities have become practically universal.  Many one-time luxuries—good food, clothing, cars and homes; advance communications; art and entertainment; foreign travel—have become mass-market commodities. 

Down-to-earth measures of material welfare, such as consumption, health status and longevity, tell the real story.  As Nobel economist Robert Fogel demonstrates in his new book, The Fourth Great Awakening and the Future of Egalitarianism, the differences in physical stature and life span between richer and poorer Europeans and Americans were still dramatically large at the beginning of the 20^th century.  Today, however, they have been largely eliminated, due to society-wide advances in nutrition, public sanitation and medical care.

Even these measures leave out one of the most valuable commodities of modern life, which is time itself.  And time is being redistributed down the income spectrum.  Popular culture has come to acknowledge, and to a striking degree celebrate, the social contributions of the entrepreneur and the economic risk-taker.

But we should also acknowledge the claims of those of modest economic aspiration.  An old libertarian saw holds that true freedom must include the freedom to be one’s potty little self.  To which many an overweight corporate lawyer would also add the freedom to be one’s hard-bodied self!

In the economically advanced societies, people of modest income are now well enough off to be able to forgo added earnings for personal time, and they are doing so at a rate that exceeds those of higher income.

According to figures from recent research by MIT economist Dora Costa, in 1950 Americans in the top 10 percent of wage income worked 46 hours per week,  while those in the bottom 10 percent worked 53 hours per week.  By 1998, the two groups had changed places.  The top 10 percent is now laboring 53 hours per week while the bottom 10 percent is down to 45 hours per week.  That is a redistribution from the top to the bottom of the wage scale of one day of free time every week!

In today’s highly affluent and mass middle-class societies, the truly serious, overarching policy problems have become cultural and ethical.  These are, in important respects, the result of our great prosperity: the profusion of obscene and violent entertainment, family breakdown, the spread of drugs and drug culture, pornography on the internet, incidents of mass violence and terrorism, and popular anxiety over the social consequences of new biological and information technologies.

All derive from the tremendous power and freedom of action that wealth and technology have placed at the disposal of every individual.  The challenge they present is learning to live in a world where wealth and freedom have amplified man’s capacities for vice along with his capacities for virtue.