5. ECONOMIC GROWTH pt2 - Η ΒΙΟΜΗΧΑΝΙΚΗ ΕΠΑΝΑΣΤΑΣΗ, ΑΠΟΚΛΙΣΕΙΣ ΣΤΑ ΕΙΣΟΔΗΜΑΤΑ
(συνέχεια απο το λινκ στο προηγούμενο ποστ)
The Population Explosion: Come 1500 or so there seems to be somewhat of a change. In the half-century starting in 1500 populations in America collapse: the Spanish land, bringing smallpox and a huge number of other diseases the Amerindians have never seen and have no immunity to with them. But everywhere else between 1500 and 1800 human populations appear to have grown by half--a population growth rate worldwide averaging 0.15% per year, three times as fast as in the previous agrarian age proper.
And since 1800 things have been very different indeed. From 1800 to 1900 our population grew at 0.7% per year. From 1900 to today our population grew at 1.5% per year. There are now nearly seven billion of us on the planet. At the moment we are hoping that the spread of birth control, female literacy, and wealth--together with the fact that while most literate women with opportunities to work outside the home want and are extremely happy to have one or two children, rather few want to have four or more--means that our global population will top out at a peak of ten billion come 2050. But if it does not--if human populations keep growing at 1.5% per year so that by 2100 we have 28 billion and by 2200 we have 127 billion people on the globe, our great-grand children's lives will become very interesting indeed, and not in a way that is likely to be good.
Making Sense of the Pattern: How do we read this broad pattern of human demography? Why were average standards of living so close to "subsistence" for so long? And why are they so different today? The way to think about humanity once people get the bright idea of agriculture and settlement--and so for the first time it becomes really easy not to forget technologies when the people who invented them die--is more or less like this: Once we have agriculture and settlement, it becomes rare that human knowledge is lost. You have to look hard for cases--the Dorian Dark Age after the Trojan War in the Aegean, the fall of the Roman Empire in the west--to find them. And human knowledge does improve.
Back in the agrarian age each year saw on average one-two thousandth more stuff produced than the previous year. In the 1500-1800 commercial revolution early modern period each year saw on average one-two hundredth more stuff produced than the previous year. The first century of the industrial revolution era--1800-1900--saw perhaps one-seventieth more stuff produced each year than the previous year. But today world global GDP is growing by about one-thirtieth every year. What we humans produce is right now doubling every generation, and has reached a level of about $7000 per person per year. Now this $7000 bucks per person per year of stuff is not distributed evenly. We have say greater than san Francisco--in which the average material standard of living is close to $50,000 bucks per person per year.We have Somalia where, in a good year, the standard of living is $500 per person per year.
We had in 1968 the most unequal world that humanity had ever seen--or at least humanity had ever seen when some groups of Eastern Africa Plains Apes had developed language and others had not. But there are very good reasons to hope that the world will draw closer together in the future as it has during the past generation and a half. Think of it: we had nearly 10,000 years during which humanity was closed to a subsistence agriculture standard of living--a bowl of millet and a bowl of rice every day, maybe a chicken egg once a week, maybe a chicken once a month, and whatever greens you can gather.That was how most people lived most of the time between the invention of agriculture and the industrial revolution.
Our Wealth: Alexander the Great, King of Macedon, conqueror of the Persian Empire, Lord of Asia--the guy who led his soldiers all the way from Greece to Punjab. Alexander the Great owned two books--the Iliad and the Odyssey. Alexander the Great carried them with him in a gold chest. The books were worth more than the chest. I, by comparison, have here in this iPad 20000 books instantly accessible for the price of ten steak dinners. And when Google Books becomes properly online I will have access to millions of books. Alexander the Great thought his books were among the most precious things he owned. In book-wealth, I outstrip him by a factor of ten thousand--and will soon outstrip him by a factor of millions.
Why the Industrial Revolution?: Thus the big historical question is: what happened after 1800, and even more so after 1900, that made what we call the industrial revolution? It is the fourth of the big changes in how humanity has lived--along with the invention of agriculture, the development of language, and the invention of stone tools and of fire. The answer to "what happened" is not "the market economy happened.: Ancient Greece had the market economy. Sung China had the market economy. Neither had the explosion of the economic growth we have seen. The answer might be "limited government." After 1500, for the first time ever, we have governments that are able to promise that they won’t steal your stuff when they feel like it and to actually carry through on those promises. Before 1500 if had stuff and if you wanted to keep it, the only way to be sure you could do so was to rapidly become part of the government and focus all your attention on keeping yourself part of the government. Government is, as the great Arab historian Ibn Khaldun liked to say, an organization that prevents all injustice except for that it commits itself. A limited government is a government that binds itself not to commit (much) injustice. Under such a government people can turn their attention to other things. For example, Steve Jobs in Cupertino can turn his attention away from lobbying the government and doing favors to politicians so that they don't steal his stuff, and instead turn his attention to terrorizing the engineers of Apple Computer and otherwise motivating them to produce the best possible successor device next April to this iPad I hold before you. Some of the answer might be "the Columbian exchange." Starting in 1500 all of a sudden humans start moving all kinds of useful plants across the world--transfer the rubber plant from Brazil to Malaysia, transplant the coffee plant from Ethiopia to Java and from Java to Brazil, transplant the hot Mexican pepper to Sichuan, transplant the Peruvian potato pretty much everywhere. That may have given humans enough of an edge above subsistence to allow them to turn more attention to invention and innovation rather than just trying to keep their heads above water.
It is interesting. We look across the dividing lines of 1500 or 1800 in practically every field of human excellence, and our predecessors speak to us. We still listen to the music of Pachelbel. We still study the orations or some of us study the orations of Cicero. We still examine the campaigns and battles of Julius Caesar and Alexander the Great. We still admire the statues of Michelangelo. Poets, generals, politicians, musicians, sculptors, playwrights, artists--we don’t seem to have much more on the ball than they did, even though there are a lot more of us today and you would expect the law of large numbers to produce more excellence today than in the past. But the economy is different. Wherever we turn in the economy, we find that the organizations we have have literally nothing to learn from anybody in the past.
So what happened to produce this divide is the big historical question. Because this is a principles of economics class and not an economic history class we are not going to answer them. I recommend that you take a global economic history or a sociology of modernity class. But I don't have time here to cover these issues. Thus next time we are going to talk about not why the industrial revolution occurred, but rather how economies have grown since the industrial revolution.
Gapminder.com: Let me close by cutting and pasting from the gapminder.com website which has a bunch of very nicely represented data series on levels of prosperity and standards of living in different countries since 1800 along the horizontal axis and life expectancy at birth along the vertical axis. It shows us how the world was in the 1800, when the great mass of human standard of living is something between $200 and $1000 per capita per year (with China being the big red ball in the middle, and with the United States and the United Kingdom the industrializing societies out there on the prosperous edge).
Fast forward to 1968. A whole bunch of countries, mostly in Africa, look very much like they looked back in 1800 with respect to income--but everybody looks much better with respect to public health and life expectancy.
ince 1968 the world has continued to grow and has become a much, much more equal place. The reduction in inequality stems from the fact the big red ball (China) and the big blue ball (India) have joined the upward merge of prosperity bigtime. It is not so much that the universe of countries have been doing different since 1968. It is that two countries have been doing different since 1968: together they are a third of the human race.
Originally Posted by freak brother
