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 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 one and two hundred.
Due to better nutrition we grow to be four inches taller
than we were just two hundred fifty years 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 with the 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 filt 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 other things they consumed.
They made a lot of their own clothing grew most to their own food
and build their own dwellings.
Fast forward to today and believe it or not
none of us is a hint 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 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 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 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 look around 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.