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← The Hockey Stick of Human Prosperity

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Showing Revision 1 created 07/23/2014 by MRUniversity.

  1. The astonishing growth in prosperity in
    the last two or three hundred years
  2. is one of the greatest events of
    humankind. Take the average human in say
  3. the year 1000 BC. He's poor, fighting to
    find food
  4. and to fend off diseases. Fast forward 500
    years to the time of classical Greece.
  5. Still poor still hungry. How about another thousand years after that?
  6. It's the dark ages. Wow. Still poor.
  7. Then jump to the 18th century and forward. Things change rapidly.
  8. This phenomenon is known as the hockey
    stick of human prosperity. Take what is
  9. surely one of the most important
    measures human well-being:
  10. life expectancy. Before the Industrial
    Revolution
  11. life expectancy was around thirty years.
    Today
  12. in the United States we expect to live
    to be about eighty.
  13. Prior to the industrial revolution one
  14. in four kids would die before the age of 5.
  15. Today in developed countries it is more like
    one and two hundred.
  16. Due to better nutrition we grow to be
    four inches taller
  17. than we were just two hundred fifty years
    ago.
  18. Remember this disease? No you don't, because
    it was eradicated in
  19. 1977. Look around--you'll find a roof over
    your head
  20. and a hard floor under your feet. Most of
    our ancestors with the huts with dirt
  21. floors and thatched roofs.
  22. Everything was infested with insects and
    rodents.
  23. Streets and alleys were open sewers.
    There were none of these.
  24. The filt was horrible and often toxic
  25. Our ancestors ate gruel and wore the same
    home-made underwear
  26. over and over. Now even the least
    fortunate Americans
  27. typically have electricity running water
    toilets
  28. refrigerators televisions and yes cheap
  29. washable underwear. Those of us who live
    in modern industrial society
  30. are incredibly, amazingly, off the charts
    rich
  31. compared to our ancestors and here's yet
    another huge difference between us
  32. and our ancestors. Before the Industrial
    Revolution
  33. people knew how to make from scratch many
    other things they consumed.
  34. They made a lot of their own clothing
    grew most to their own food
  35. and build their own dwellings.
  36. Fast forward to today and believe it or
    not
  37. none of us is a hint how to make the
    majority of the things that we consume.
  38. Just getting ready in the morning
    involves taking many trips around the
  39. globe.
  40. Take this coffee for example beans come
    from
  41. Guatemala and they were brewed in this
    coffeemaker from Switzerland.
  42. The container ship that carried the
    beans was built in Korea.
  43. It's insured by a company from London and
    it's captained by Frenchman
  44. who loves Turkish cigarettes. We've
    transitioned
  45. from each of us doing many things to each of us doing one thing.
  46. Having a job only makes sense in a modern
    world
  47. where each individual typically does only
    one type of work.
  48. So while we mostly only produce one
    thing
  49. doing one job each of us now consumes a
    whole bunch of products
  50. that require a whole bunch of jobs to
    produce.
  51. The question where prosperity comes from
    launched the field of economics.
  52. It's why Adam Smith wrote the first book
    in modern economics.
  53. An inquiry into the nature and causes of
    The Wealth of Nations.
  54. Back in 1776 when he published it
  55. Smith was trying to understand the
    causes of modern prosperity that were
  56. just starting to appear.
  57. Poverty and starvation were still normal as
    they had been from the beginning
  58. but in the late 18th century for the
    first time ever
  59. the masses began to enjoy riches once
    reserved
  60. only for the nobility. It is this mass
    prosperity that Adam Smith
  61. sought to explain. Why was it happening?
    What was causing wealth to move from being
  62. the exception
  63. to being the norm. Now look around try to
    figure out what causes poverty
  64. instead of what causes prosperity. You are
    watching
  65. Everyday Economics, a course where we use the
    lens of Economics
  66. to explore everyday questions. This
    section is about
  67. trade. In the upcoming videos we will attempt
    to explain how trade
  68. plays a role in our prosperity. You also
    get to decide where the course goes.
  69. Maybe you have some questions related to
    trade that you've wondered about.
  70. We'll cover the basics and then you tell
    us what topics come next.