delanceyplace.com 11/2/06 - economic growth
In today's encore excerpt - the world's standard of living grew by only 50% from 1 A.D. to 1800 A.D., but has incresed over 900% in the 200 years since then:
"The past two centuries, since around 1800, constitute a unique era in economic history, a period the great economic historian Simon Kuznets famously termed the period of modern economic growth. Before then, indeed for thousands of years, there has been virtually no sustained economic growth in the world, and only gradual increases in the human population. The world population had risen gradually from around 230 million people at the start of the first millennium in A.D. 1, to perhaps 270 million by A.D. 1000 and 900 million by A.D. 1800. Real living standards were even slower to change. According to Maddison, there was no discernible rise in living standards on a global scale during the first millennium, and perhaps a 50 percent increase in per capita income in the eight-hundred-year period from A.D. 1000 to A.D. 1800.
"In the period of modern economic growth, however both population and per capita income came unstuck, soaring at rates never before seen or even imagined. ... the global population rose more than sixfold in just two centuries, reaching an astounding 6.1 billion people at the start of the third millennium, with plenty of momentum for rapid population growth still ahead. The world's average per capita income rose even faster, ... increasing by around nine times between 1820 and 2000. In today's rich countries, the economic growth was even more astounding. The US per capita income increased almost twenty-five-fold during this period, and Western Europe's increased fifteen-fold. Total worldwide food production more than kept up with the booming world population. Vastly improved farm yields were achieved on the basis of technological advances. If we combine the increases in world population and world output per person, we find that total economic activity in the world rose an astounding forty-ninefold increase in total economic activity in the world over the past 180 years.
"By 1998, the gap between the richest economy, the United States, and the poorest region, Africa, had widened to twenty to one. Since all parts of the world had a roughly comparable starting point in 1820 (all very poor by current standards), today's vast inequalities reflect the fact that some parts of the world achieved modern economic growth while others did not. Today's vast income inequalities illuminate two centuries of highly uneven patterns of economic growth."
|Jeffrey D. Sachs
|The End of Poverty: economic possibilities for our time
|The Penguin Group
|Copyright 2005 by Jeffery D. Sachs