WEBVTT

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♪ [music] ♪

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- [Don] The astonishing
growth in prosperity

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in the last two
or three hundred years

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is one of the greatest events
of humankind.

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Take the average human
in, say, the year 1000 BC.

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

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Fast forward 500 years
to the time of classical Greece.

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Still poor, still hungry.

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How about another
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
and forward.

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Things change rapidly.

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This phenomenon is known
as the hockey stick

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of human prosperity.

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Take what is surely one
of the most important measures

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of human well-being:
life expectancy.

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Before the Industrial Revolution,
life expectancy

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was around thirty years.

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Today in the United States,
we expect to live

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to be about eighty.

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

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before the age of 5.

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

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Due to better nutrition,
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,
because it was eradicated in 1977.

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

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and a hard floor under your feet.

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Most of our ancestors
lived in huts with dirt floors

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and thatched roofs.

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Everything was infested
with insects and rodents.

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Streets and alleys
were open sewers.

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There were none of these.

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The filth was horrible
and often toxic.

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Our ancestors ate gruel

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and wore the same
home-made underwear over and over.

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Now, even the least fortunate
Americans

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typically have electricity,
running water, toilets,

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refrigerators, televisions,
and, yes, cheap washable underwear.

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Those of us who live
in modern industrial society

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are incredibly, amazingly,
off the charts rich

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compared to our ancestors,

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and here's yet another
huge difference between us

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and our ancestors.

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Before the Industrial Revolution,
people knew how to make

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from scratch many of the things
they consumed.

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They made a lot
of their own clothing,

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grew most of their own food,
and built their own dwellings.

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Fast forward to today
and believe it or not,

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none of us has a hint
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
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,
and they were brewed

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in this coffeemaker
from Switzerland.

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

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It's insured by a company
from London

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

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We've transitioned from each of us
doing many things

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to each of us doing one thing.

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Having a job only makes sense
in a modern world

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where each individual typically
does only one type of work.

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So while we mostly only produce
one thing, doing one job,

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each of us now consumes
a whole bunch of products

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that require a whole bunch
of jobs to produce.

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The question
of where prosperity comes from

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launched the field of economics.

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It's why Adam Smith
wrote the first book

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in modern economics.

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An Inquiry into the Nature
and Causes

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of The Wealth of Nations.

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

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

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Poverty and starvation
were still normal as they had been

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from the beginning,
but in the late 18th century,

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for the first time ever,
the masses began to enjoy riches

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once reserved only
for the nobility.

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

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Why was it happening?

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What was causing wealth
to move from being the exception

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to being the norm.

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Now we look around,
and try to figure out

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what causes poverty
instead of what causes prosperity.

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You are watching
Everyday Economics,

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a course where we use
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,
we will attempt to explain

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how trade plays a role
in our prosperity.

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You also get to decide
where the course goes.

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Maybe you have some questions
related to trade

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that you've wondered about.

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We'll cover the basics
and then you tell us

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what topics come next.

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♪ [music] ♪