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♪ [music] ♪

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- [Don] The astonishing[br]growth in prosperity

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in the last two[br]or three hundred years

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is one of the greatest events[br]of humankind.

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Take the average human[br]in, say, the year 1000 BC.

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He's poor, fighting to find food[br]and to fend off diseases.

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Fast forward 500 years[br]to the time of classical Greece.

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Still poor, still hungry.

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How about another[br]thousand years after that?

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It's the dark ages.

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Wow. Still poor.

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Then jump to the 18th century[br]and forward.

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Things change rapidly.

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This phenomenon is known[br]as the hockey stick

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of human prosperity.

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Take what is surely one[br]of the most important measures

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of human well-being:[br]life expectancy.

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Before the Industrial Revolution,[br]life expectancy

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was around thirty years.

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Today in the United States,[br]we expect to live

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to be about eighty.

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Prior to the industrial revolution,[br]one in four kids would die

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before the age of 5.

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Today in developed countries,[br]it is more like 1 in 200.

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Due to better nutrition,[br]we grow to be four inches taller

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than we were just 250 ago.

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Remember this disease?

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No you don't,[br]because it was eradicated in 1977.

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Look around -- you'll find a roof[br]over your head

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and a hard floor under your feet.

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Most of our ancestors[br]lived in huts with dirt floors

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and thatched roofs.

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Everything was infested[br]with insects and rodents.

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Streets and alleys[br]were open sewers.

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There were none of these.

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The filth was horrible[br]and often toxic.

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Our ancestors ate gruel

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and wore the same[br]home-made underwear over and over.

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Now, even the least fortunate[br]Americans

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typically have electricity,[br]running water, toilets,

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refrigerators, televisions,[br]and, yes, cheap washable underwear.

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Those of us who live[br]in modern industrial society

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are incredibly, amazingly,[br]off the charts rich

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compared to our ancestors,

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and here's yet another[br]huge difference between us

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and our ancestors.

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Before the Industrial Revolution,[br]people knew how to make

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from scratch many of the things[br]they consumed.

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They made a lot[br]of their own clothing,

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grew most of their own food,[br]and built their own dwellings.

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Fast forward to today[br]and believe it or not,

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none of us has a hint[br]of how to make the majority

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of the things that we consume.

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Just getting ready in the morning[br]involves taking many trips

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around the globe.

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Take this coffee for example.

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The beans come from Guatemala,[br]and they were brewed

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in this coffeemaker[br]from Switzerland.

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The container ship that carried[br]the beans was built in Korea.

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It's insured by a company[br]from London

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and it's captained by a Frenchman[br]who loves Turkish cigarettes.

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We've transitioned from each of us[br]doing many things

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to each of us doing one thing.

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Having a job only makes sense[br]in a modern world

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where each individual typically[br]does only one type of work.

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So while we mostly only produce[br]one thing, doing one job,

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each of us now consumes[br]a whole bunch of products

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that require a whole bunch[br]of jobs to produce.

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The question[br]of where prosperity comes from

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launched the field of economics.

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It's why Adam Smith[br]wrote the first book

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in modern economics.

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An Inquiry into the Nature[br]and Causes

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of The Wealth of Nations.

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Back in 1776 when he published it,[br]Smith was trying to understand

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the causes of modern prosperity[br]that were just starting to appear.

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Poverty and starvation[br]were still normal as they had been

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from the beginning,[br]but in the late 18th century,

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for the first time ever,[br]the masses began to enjoy riches

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once reserved only[br]for the nobility.

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It is this mass prosperity[br]that Adam Smith sought to explain.

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Why was it happening?

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What was causing wealth[br]to move from being the exception

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to being the norm.

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Now we look around,[br]and try to figure out

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what causes poverty[br]instead of what causes prosperity.

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You are watching[br]Everyday Economics,

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a course where we use[br]the lens of Economics

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to explore everyday questions.

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This section is about trade.

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In the upcoming videos,[br]we will attempt to explain

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how trade plays a role[br]in our prosperity.

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You also get to decide[br]where the course goes.

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Maybe you have some questions[br]related to trade

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that you've wondered about.

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We'll cover the basics[br]and then you tell us

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what topics come next.

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♪ [music] ♪