Why iPhone 5 and Siri Are Good for Capitalism

Last week, I asked a friend of mine if he could recommend a good white noise machine. “Why don’t you,” he responded, “download an iPhone app instead?” I did and the app works just fine. That got me thinking: What other gadgets do I no longer have or could do without thanks to my iPhone? I put together a short list and asked Lauren Kessler from Cato’s art department to create the lovely graphic below. Of course, “dematerialization,” or using less material and energy to produce more goods, is not new. As Ron Bailey writes in Reason,

Jesse Ausubel, director of the Program for the Human Environment at Rockefeller University and Paul Waggoner at the Connecticut Agricultural Experiment Station, show that the world economy is increasingly using less to produce more. They call this process “dematerialization.” By dematerialization, they mean declining consumption of energy or goods per unit of GDP. In a 2008 article in the Proceedings of the National Academy of Sciences, Ausubel and Waggoner, using data from 1980 to 2005, show that the world is on a dematerialization binge, wringing ever more value from less material. 

No, I am not claiming that because of the iPhone all the gadgets that I have listed below will totally “disappear.” People will still prefer to have their weddings shot by a professional photographer using sophisticated camera equipment. Many people, however, will never need to buy a camera or video camera (especially as the iPhone and similar products become better at taking pictures and videos) and that will save resources.

Dematerialization, in other words, should be welcome news for those who worry about the ostensible conflict between the growing world population on the one hand, and availability of natural resources on the other hand. While opinions regarding scarcity of resources in the future differ, dematerialization will better enable our species to go on enjoying material comforts and be good stewards of our planet at the same time. That is particularly important with regard to the people in developing countries, who ought to have a chance to experience material plenty in an age of rising environmental concerns.

Maybe I am too much of an optimist, but dematerialization could also lead to a greater appreciation of capitalism. Namely, the “profit motive” can be good for the environment. No, I am not talking about dumping toxic chemicals into our rivers, which is illegal and should be prosecuted. Rather, I am talking about the natural propensity of firms to minimize inputs and maximize outputs. Take the humble soda can. According to the Aluminum Association, “In 1972… a pound of aluminum yielded 21.75 cans. Today, as a result of can-makers’ use of less metal per unit, one pound of aluminum can produce 33 cans.”

PS: If there are other gadgets that you no longer find essential thanks to your iPhone, let me know and we will expand our graphic accordingly: mtupy@cato.org

This post originally appeared on the Cato Institute's Cato@Liberty blog.