Skip to main content

The World Rises Out of Extreme Poverty

Between 1750 and 1820, capitalism had its start in the Western World. It would prove to bring more prosperity than had ever been known -- ever. 

In 1800, 90% of the world's population lived in extreme poverty. In 2019, 10% did. During this 220 year span, 80% of the population of Earth rose out of extreme poverty.

According to the World Bank, people living in poverty have access to shelter, food, clean water, and basic services provided by the government or private entities. On the other hand, people who live in extreme poverty are severely deprived of basic human needs and often do not have access to service aids.
 
Most of a country's shift out of extreme poverty coincides with its industrialization.

The entire population of the U.S. has been effectively out of extreme poverty since about 1940. 

Most of China's population was stuck in extreme poverty until 1976, after which, the country suddenly began advancing out of it, slowly at first, then much more quickly, as if they had been unnaturally constrained before.

India's rise out of poverty is also impressive, though it started progressing earlier than China and has maintained a somewhat slower pace.

The largest country whose population still mostly falls below the extreme poverty line is the Democratic Republic of Congo, which though it has grown significantly in population, has fallen back behind other countries in its region in recent decades.

World GDP per capita was essentially flat for 2,000 years. It began increasing during and after the Enlightenment. Beginning about 1820, the rate exploded. 


Further Reading

The Origins of Power, Prosperity, and Poverty  What explains the enormous differences in income per capita that exist across the world today? The question has been posed many times over. The gaps in prosperity that surround us in the modern age are much wider than those that motivated Adam Smith to write The Wealth of Nations in 1776, which of course is where the modern discipline of economics began.
   
Why Nations Fail

Daron Acemoglu and James Robinson conclusively show that it is man-made political and economic institutions that underlie economic success (or lack of it). Korea, to take just one of their fascinating examples, is a remarkably homogeneous nation, yet the people of North Korea are among the poorest on earth while their brothers and sisters in South Korea are among the richest. The south forged a society that created incentives, rewarded innovation, and allowed everyone to participate in economic opportunities.

The economic success thus spurred was sustained because the government became accountable and responsive to citizens and the great mass of people. Acemoglu and Robinson explain how institutions are key to prosperity, and how bad or extractive institutions prevent prosperity. 
   
 The Birth of Plenty

In The Birth of Plenty, William Bernstein, the bestselling author of The Four Pillars of Investing, presents his theory of why prosperity has been the engine of civilization for the last 200 years.

This is a “big-picture” work that highlights and explains the impact of four elements that when occurring simultaneously, are the fundamental building blocks for human progress:
  • Property rights, which drive creativity
  • Scientific rationalism, which permits the freedom to innovate without fear of retribution;
  • Capital markets, which provide funding for people to pursue their visions;
  • Transportation/communication, which allows for the effective transfer of ideas and products.

   
 The Age of Abundance 

Until the 1950s, the struggle to feed, clothe, and employ the nation drove most of American political life. From slavery to the New Deal, political parties organized around economic interests and engaged in fervent debate over the best allocation of agonizingly scarce resources. 

But with the explosion of the nation's economy in the years after World War II, a new set of needs began to emerge—a search for meaning and self-expression on one side, and a quest for stability and a return to traditional values on the other.

Lindsey offers a bold reinterpretation of the latter half of the twentieth century. In this history of postwar America, the tumult of racial and gender politics, the rise of the counterculture, and the conservative revolution of the 1980s and 1990s are portrayed in an entirely new light. 

  
 How the West Grew Rich

How did the West—Europe, Canada, and the United States—escape from immemorial poverty into sustained economic growth and material well-being when other societies remained trapped in an endless cycle of birth, hunger, hardship, and death?

In this elegant synthesis of economic history, two scholars argue that it is the political pluralism and the flexibility of the West's institutions—not corporate organization and mass production technology—that explain its unparalleled wealth.

This book is a summary of the factors which were necessary to the breakthrough, or series of economic breakthroughs (they actually mention at least five -- the expansion of trading and markets, the first and second industrial revolution, the modern information/technology revolution, and science).

Comments

Popular posts from this blog

Proper way to calculate CAGR using T-Sql for SQL Server

After reading (and attempting the solutions offered in some) several articles about SQL and CAGR,  I have reached the conclusion that none of them would stand testing in a real-world environment. For one thing, the SQL queries offered as examples are overly complex or don't use the correct math for calculating proper CAGR. Since most DBAs don't have an MBA or Finance degree, let me help.  The correct equation for calculating Compound Annual Growth Rate (as a percentage) is:  Some key points about CAGR:  The compounded annual growth rate (CAGR) is one of the most accurate ways to calculate and determine returns for anything that can rise or fall in value over time. Investors can compare the CAGR of two alternatives to evaluate how well one stock performed against other stocks in a peer group or a market index. The CAGR does not reflect investment risk. You can read a full article about CAGR  here .  To calculate the CAGR for an investment in a language like VB is pretty straight

Top Five Consumer Cyber Security FAQs

Business, technology, environmental and economic changes are a part of life, and they are coming faster all the time. All of these changes and advancements can be distracting and make us more vulnerable to cyber scams. That's why protecting your credit is a critical part of protecting yourself from cyber security threats. Security researchers have reported that hackers and scammers are using any opportunity or vulnerability to target both individuals and companies. You may have already seen these attempts in the form of fake emails or calls. Here are the top five questions Equifax ®  has received about how individuals can protect themselves from cyber security threats and help to improve your credit protection. 1. How can I better protect my credit? Check your credit reports frequently. You can get free credit reports from the nationwide credit reporting agencies (Equifax, Experian ®  and TransUnion ® ) at annualcreditreport.com. Check your credit reports frequently to closely moni

California: A Model for the Rest of the Country, Part 2

Part 1 here . On Leaving the Golden State Guest Post by NicklethroweR . Posted on the Burning Platform. The fabled Ventura Highway is all that separates my artist loft from the beach where surfing first came to the United States. Both my balcony and front patio face the freeway at about eye level and I could easily smack a tennis ball right on to the ever busy 101. Access to the beach and boardwalk is very important to a Tourist Town such as mine and I can see one underpass from my balcony and another underpass from the patio. Further up the street are two pedestrian bridges. Both have been recently remodeled so that people can not use it to kill themselves by leaping down into traffic. The traffic, just like the spice, must flow and the elites that live here do not like to be inconvenienced as they dart about between Malibu and Santa Barbara. Another feature of living where I live would have to be the homeless, the insane and the drug addicts that wander this particular