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- [Don] The astonishing
growth in prosperity
in the last two
or three hundred years
is one of the greatest events
of humankind.
Take the average human
in, say, the year 1000 BC.
He's poor, fighting to find food
and to fend off diseases.
Fast forward 500 years
to the time of classical Greece.
Still poor, still hungry.
How about another
thousand years after that?
It's the dark ages.
Wow. Still poor.
Then jump to the 18th century
and forward.
Things change rapidly.
This phenomenon is known
as the hockey stick
of human prosperity.
Take what is surely one
of the most important measures
of human well-being:
life expectancy.
Before the Industrial Revolution,
life expectancy
was around thirty years.
Today in the United States,
we expect to live
to be about eighty.
Prior to the industrial revolution,
one in four kids would die
before the age of 5.
Today in developed countries,
it is more like 1 in 200.
Due to better nutrition,
we grow to be four inches taller
than we were just 250 ago.
Remember this disease?
No you don't,
because it was eradicated in 1977.
Look around -- you'll find a roof
over your head
and a hard floor under your feet.
Most of our ancestors
lived in huts with dirt floors
and thatched roofs.
Everything was infested
with insects and rodents.
Streets and alleys
were open sewers.
There were none of these.
The filth was horrible
and often toxic.
Our ancestors ate gruel
and wore the same
home-made underwear over and over.
Now, even the least fortunate
Americans
typically have electricity,
running water, toilets,
refrigerators, televisions,
and, yes, cheap washable underwear.
Those of us who live
in modern industrial society
are incredibly, amazingly,
off the charts rich
compared to our ancestors,
and here's yet another
huge difference between us
and our ancestors.
Before the Industrial Revolution,
people knew how to make
from scratch many of the things
they consumed.
They made a lot
of their own clothing,
grew most of their own food,
and built their own dwellings.
Fast forward to today
and believe it or not,
none of us has a hint
of how to make the majority
of the things that we consume.
Just getting ready in the morning
involves taking many trips
around the globe.
Take this coffee for example.
The beans come from Guatemala,
and they were brewed
in this coffeemaker
from Switzerland.
The container ship that carried
the beans was built in Korea.
It's insured by a company
from London
and it's captained by a Frenchman
who loves Turkish cigarettes.
We've transitioned from each of us
doing many things
to each of us doing one thing.
Having a job only makes sense
in a modern world
where each individual typically
does only one type of work.
So while we mostly only produce
one thing, doing one job,
each of us now consumes
a whole bunch of products
that require a whole bunch
of jobs to produce.
The question
of where prosperity comes from
launched the field of economics.
It's why Adam Smith
wrote the first book
in modern economics.
An inquiry into the nature
and causes
of The Wealth of Nations.
Back in 1776 when he published it,
Smith was trying to understand
the causes of modern prosperity
that were just starting to appear.
Poverty and starvation
were still normal as they had been
from the beginning,
but in the late 18th century,
for the first time ever,
the masses began to enjoy riches
once reserved only
for the nobility.
It is this mass prosperity
that Adam Smith sought to explain.
Why was it happening?
What was causing wealth
to move from being the exception
to being the norm.
Now we look around,
and try to figure out
what causes poverty
instead of what causes prosperity.
You are watching
Everyday Economics,
a course where we use
the lens of Economics
to explore everyday questions.
This section is about trade.
In the upcoming videos,
we will attempt to explain
how trade plays a role
in our prosperity.
You also get to decide
where the course goes.
Maybe you have some questions
related to trade
that you've wondered about.
We'll cover the basics
and then you tell us
what topics come next.
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