The most important thing to understand about,
about the modern world actually, is that once people were very poor and now they are very
rich. In 1800 the average person in the world made three dollars a day. I mean the modern
equivalent of three dollars a day, so the goods and services the stuff you could buy
in the amount of three dollars a day so three quarters of a Cappuccino per day. Nothing
else. In the last thirty years the percentage of people who were that badly off in the world
has fallen by half. It has been halved. So things are going very well and for we in places
like the United States where they have gone exceptionally well since 1800. We are making,
now hear this, $130 a day and what a transformation, it is just incredible. Now we had earned the
three dollars a day forever so there was in history if you want a short economic history,
since the beginning of time it was three dollars a day going along like this and then right
here which is 1800 it goes schwoosh, it goes up like mad and there is this fantastic transformation
of the condition of ordinary folks. Why did it happen? One old explanation is exploitation.
You hear this a lot, we are rich because there are a bunch of poor people elsewhere in the
world who are poor. That is not true. There has always been exploitation in history and
it didn’t cause economic growth so it can’t be modern exploitation nor can it be, to think
of a more conservative way of looking at it, investment. It is not investment it is not
piling bricks on bricks or BAs on BAs, it’s new ideas. It is innovation. The fantastic
number of changes in machinery, and materials, and organizational ideas ,such as the modern
university, or reinforced concrete it is just amazing that caused the schwoosh, this hockey
stick, the blade of the hockey stick. Why did this happen? Two changes in Holland and
England in the 1600s and 1700s which was a rise of economic liberty and social honor
for inventors, merchants, manufacturers. Before these were dishonored occupations then they
became honored, and out of that came a tremendous burst of innovation that had been earlier
discouraged because they weren’t free and they weren’t honored.

Tagged : # # #

100 thoughts on “What Caused The Economic Boom of Wealth? – Learn Liberty”

  1. What an incredible heaping pile of libertarian bullshit. It's called the Industrial Revolution, fuckwads. It's called the transition from virtually everyone working agriculture and being significantly self-sufficient, to division of labor and consequently survival requiring earning income to purchase life's necessities.
    One more thing distorting income data in the USA in 1800: 17% of the population weren't earning any income at all… they were called slaves.
    I suppose I should be clear as to why that makes a difference. If you work all day on a farm, and provide virtually everything you need to survive, and sell the rest for a pathetic income, or to pay their feudalistic landlord – then the accounts will say you have a pathetic income. All that work, and all those produced life necessities don't show up in income. And if you barter for much of what you don't have, as people back then did, that bartered trade is again not going to show up as income. And when the vast majority of the population is behaving that way, the few big traders will have all their income divided by the size of the population to get "average income". that average income will be small.
    Thus it's an apples and oranges comparison. $3/day for a self sufficient farmer means something very different than $3/day for some guy living in town, working a job, for whom every single thing he'll need has to come from that $3.
    Again, the work and production of the pre-industrial self-sufficient agrarian economy largely doesn't show up as income, whereas the work and production in the division-of-labor industrial economy all does. THAT'S the primary reason for the the hockey stick she described… production which formerly didn't show up in the accounting books as income, changed into production that did show up as income,
    There are other reasons too, also primarily (but not exclusively) from the Industrial Revolution, that increased actual production significantly. But her explanation for what increased average income is just bullshit. Straight up bullshit.

  2. Libertarians are delusional at best.  My advice, is Life Lesson #9.  So when boredom sets in:  Go on, get out. Last words are for fools who haven't said enough.  BTW. When was the fall of the roman catholic empire?

  3. This lady got it all wrong:

    1. Explotation: The real reason why America went into a Civil War was NOT because of the enslavement of Africans, but because of the South was economically  making lucrative profits with nearly no debt due to the free labor of having slaves, where the North had to pay White Northern workers a wage to do the same job. That's why the historic South has a lot more mansions than the historic North. 

    2. Investment: Slave masters had to pay a pretty penny for slaves.

    3. Innovation: When you have others doing work for you, that frees up your own time to do other things. Most innovators have some form of a support system in place that allows them to do what they want whether it's a grant, living under their parents roof, etc. 

  4. Property Rights and Collateralized debt.

    I am not going to finish my comment because it just don't matter what anyone says or thinks. I don't sit at the world leaders table and my Oxycontin is starting to work.

  5. The $3 vs. $130 comparison is also worthless due to the fact that prices have inflated to match it. There hasn't been much of a gain in the actual value of currency, if anything, it's slipped. sips $6 Starbucks coffee

  6. fucking idiot. this woman is a professor? the reason for the increase is the industrial revolution i.e. the utilisation of fossil fuel in machineries.

    none of this BS about invention and social honour. fuck off you dumb bitch

  7. Bad title. It should have read, "What the rich want to take you back to." Now I know, $3 a day is their goal for us in the bottom 99%.

  8. "There has always been exploitation in history and it didn't cause economic growth."  False.

    "So it cannot be exploitation." False. Even if the first sentence was true, this is still not a valid statement. Is Prof. McCloskey a bit out of sync with logic? And why does she sound like Darth Vader?

  9. Libertarians: usefully idiots of the worldwide exploitation of the people by the money.

    Excuse my poor english, i am a fucking french.

  10. Nonsense….for example a cup of capuchino did not cost $3 back the 1800s. And yes that drink was around in some places.  Libertarians tend  to eschew math.  They cannot understand it.  When I got my PhD in economics, Libertarians were  the ones who could not do math and so they took on a view, that required no math. In the beginning of the nation, after the Constitution, there were only 4 million Americans. Now there are 330 million and this we are more affected b other's actions. Libertarians and true Marxists belong together – both whack jobs. Most of those profs work at public universities and you can bet they want every penny they can get.

  11. Is Hiroshima humanism?

    CIA install Pinochet and many others dictators.

    Milton Friedman ideas destroy Welfare state in south, central America and Africa
    … and France is on the list.

    With brillant gestion of the Republicans throu history, USA made
    16000 Mds of debt, great result.

  12. this woman is very intelligent and i assume an excellent professor- but could they get someone else to do a voice over for the video? she could have wrote it but for the purpose of spreading the information its sort of hard to hear her.

  13. Really really bad explaination. There a lot of other factors which has to to be considered and are more  important then this. And justifing explotatioin and inequality is in absolutly not reasonable.

  14. I don't know where the speaker gets the $3 a day nonsense from. So since forever up to  c.1800 ordinary people everywhere could barely afford a cup of coffee and nothing more per day? There are so many things wrong with that, it's hard to know where to start. First of all: it's true a cup of coffee in England in 1600, say, would have been an exotic, luxury beverage and so in all likelihood very expensive, and the great majority of people would not have been able to afford a coffee which today costs just $3. In that extremely superficial and limited sense the speaker is right. But obviously what is true of one product is not necessarily true of another. A sandwich today costs about the same as a coffee – actually, quite a bit more (at least at my college cafeteria, which I think is fairly typical). But I'd be very surprised if the same were significantly more expensive in England 400 years ago (supposing sandwiches were sold then, which is in fact not the case – but the point stands, in principle). Similarly for bread, corn, fruit, vegetables, milk, and so on. Now, taken together, these items would cost considerably more than $3 today. But then, if the speaker is right, we would expect to find that these things were completely beyond the reach of ordinary people everywhere before around 1800. Indeed, we would expect to find all but a tiny minority of people starving, all the time. But of course that's ridiculous. It doesn't even remotely agree with historical records and accounts of the lives of ordinary people. To be sure, there has been periodic famine throughout history and all over the world (as there is now). But this $3 a day perpetual starvation nonsense is just that – ahistorical nonsense. Also: it should already be clear from the foregoing that what $3 a day (or exchange-value in general) actually means is not always clear when one is comparing between hugely differing sets of circumstances, let alone all history everywhere before a certain date. It should also be clear that the phrase 'earning $3 a day' is highly uncertain as applied to very different pre-capitalist societies and cultures where there were relatively few if any salaried 'jobholders' such as we have today.

    (I don't think I need to address the question of the rise of modern capitalism and the industrial revolution and the causes and mechanisms of economic transformation and exploitation, since even the basic premise of the argument was wildly inaccurate.)

  15. In the words of the inimitable Slim Pickens:
    What in the Wide World of Sports is a-going on here? "1% of History"? What exactly does that mean? Please elucidate.

  16. Throughout history the average person was extremely poor: subsisting on the modern equivalent of $3 per day. This was true until ……  BUT, dont worry, w the Perverse New World Order we'll be back to being Dirt Poor & Starving soon enough!!  There, that should make all the Leftist feel warm & fuzzy

  17. I started thinking about the freedom of a capitalist society. That two consenting adults can engage in a mutually beneficial agreement. Could prostitution then be considered mutually beneficial to the woman providing services and the man paying for them. If we think about the idea of choice one must consider one's position.

    Slavery had occurred one party had the power to dominate and the other did not have the power to resist. This can be considered the defense of slavery. Those that are meant to be slaves do not have the power to resist their masters and those that are free did.

    We talk about free markets as if they are a perfect system that bring about efficiency if left to its own devices. But markets are made up of people who by their very nature, are unpredictable in response to scarcity. We assume that if enterprise competes for the best employees then they will have to pay market rates. But that is assuming that these firms will compete for talent what if they worked together to keep costs low. Forcing down the price of labor creating a market value that is favorable to the business owner at the expense of the worker. Considering that there are there maybe only a few players in the industry you decide to work in. It wouldn't be hard for them to work together in a mutually beneficial transaction.

    Most would say that prostitution is immoral but then what else would have women do instead. Do prostitutes freely choose this occupation because there is a lack of a better alternative. That most people make decisions that are in their own best interest. Circumstances often dictate the choices that people are capable of making. There is a saying that there is always a choice. The people that were slaves did not have to be slaves they could have fought for their freedom. They are right that prostitutes choose what they do in the context of a world that does not provide more desirable work. Sometimes people have to choice between two equally bad options. Most modern scholars wouldn't consider this a choice at all.

    I do not have the answer to all the questions regarding which system of rationing works. It is human nature to want more than the next person has. To somehow feel entitled to it, either by divine right, work ethic, racial superiority, seniority, etc. This very nature drives capitalism. To work harder and be rewarded by being more efficient. But like gravity the concentration of wealth in the country does the exact opposite. Those that control the wealth can make sure that future generations are unable to advance regardless of talent. While I believe that capitalism is purely predatory in nature I do not see an alternative that rationing system.

  18. I don't understand why people always look at the poor of 1900 to the rich of 1900. Yes the jobs were horrible and exploitative, but guess what? Jobs in the 1900s were 100% better than jobs from 1700s-1800s, and 1900s jobs in America were 100% better than in poor European and Asian countries, hence why so many people immigrated to America and KEEP on immigrating there. There have always been the "old rich" but what people hate admitting is that in the 20th and 21st century we have created the "impossible" so many new rich all from personal hard-work, innovation and liberty. Also the question of who would pick the cotton if there weren't slaves: the poor and people who lack freedom (prisons, people serving in lifetime servitude etc), and machines now (and migrant or illegal workers)

  19. She makes good points, but fails to understand the relationship of investment and technology, and  the importance of capital accumulation.

  20. The reason the curve went up in 1800's was from the introduction of the steam engine and eventually fossil fuels. Technological productivity, so simple. 

  21. Inventors like Archimedes were honored weren't they? And honored for all time since, to some degree. When the Romans besieged Syracuse, the express orders were that he was to be found and protected. So, I think we have to go deeper. Its the type of inventions that made the west so prosperous I think, inventions that say, the emperors of Rome would have suppressed for fear of making the delicate unemployment situation worse. That situations was made politically. Political freedom first then? The belief in individual dignity? Why are you allowed to be disruptive now, at least more so than then?

  22. the abrupt raise in standard of living is due to leverage of fossil fuel and man stumbling on it….  …. honor of profession has nothing to do with this…its purely fossil fuel driven growth bubble …. India always respected science and its inventors and used to be 25% of global GDP until British thugs arrived with their guns and looted south asia and enjoyed more prosperity than them…. there is no way whole world can live like Europeans did for last 100 +years…. there isnt enough of the black stuff….

  23. There is another way to look at it. In 1800 the currency was based on the limited recourse of gold. In 1800 gold was worth about $19/oz, so at $3 dollars a day you had what was .1579 oz of gold/per day, with gold trading at about 1240/oz today you would be making $195.80/day.
    Or you could say in 1800 one US dollar was gold backed by 24.75 grains of gold. So you would have 74.25 grains of gold per day or .1697 oz, today equaling $210.44/day which isnt even close to the average income of $130 of today. Though it's probably not fair to compare gold backed currencies with today's fiat currency. 

  24. People will accept just about any job if it allows them to survive. I don't see this as voluntary employment given the alternatives. It doesn't have to be this way. The earth is everyone's birthright. If the rents of the land went into a citizens dividend fund, nobody would accept a "sweatshop" job.

  25. There is no moral defense for 85 individuals owning as much wealth as half of humanity (roughly 3.5 billion individuals).

    In strictly utilitarian terms: sitting on vast reserves of money (power) that is being horded in the name of greed, when there are SO MANY people in need, and so many ways that money could be used to improve our species' future, is morally wrong.

    If those 85 individuals were shot and their money given to the poor we could DOUBLE THE WEALTH OF HALF OF HUMANITY. I'd sacrifice my own life if it meant such an event occurring.

    The injustice of stealing their money pales in comparison to the injustice of a situation in which vast swathes of humanity are born into a situation where they are compelled to work, to trade hours of their lives away for pittance, with no hope of ever attaining the wealth horded by their masters: whilst a privileged elite have no need to work, they OWN people's lives (albeit through a complex and abstracted system).

    Many of the uber rich have made their money through terrible moral wrongs: most notably unnecessary war, the merciless exploitation of those who have little choice but to trade their time for money in order to survive and provide for their children, and a total disregard for the environment . Many of the current masters were simply born into that privilege: there's no real justice there, not in the lottery of Babylon.

    Additionally, the "progress" described is specious: we have fancy devices to save us time, and no free time, mental health issues and suicide rates continue to increase, children are raised by technology and the state- whilst their parents have no choice but to spend the bulk of their life working, we have mass incarceration, and an unthinkable environmental catastrophe set in motion for our progeny.

    Check out the TED Talk on how economic inequality harms society, it pretty much ends the debate.

  26. 3 dollars a day through out history was like 300 dollars today before the federal reserve existed and created this fiat currency we use all over the world now days instead of gold and silver etc etcetera. So this spike in wealth is not necessarily a good observation to explain the situation we live in today. 3 dollars would buy you what 300 buys you now a days so nothing has changed. Business as usual. The smart takes advantage of the stupid the strong of the weak the aggressive of the passive the rich of the poor and and on nothing new under the sun.

  27. "There's always been exploitation in history, and it didn't cause economic growth. So it can't be modern exploitation."

    That's diabolically stupid. It's the explosion of institutionalized exploitation that flourishes under Capitalism that has caused this "hockey stick". Another propagandized human drone clamouring for its own exploitation, and that of others.

  28. I wish we could gather all the intellectually honest people together and form another country somewhere (or refurbish a collapsed and abandoned country–hey! a lot of people are fleeing France right now! We could go there!.) This new country would quickly turn into another Hong Kong, which currently has the most economic freedom in the world ( Let all the socialists and anti-market types continue to ruin their own countries, one after another.

  29. Industrial Revolution. Oh look, I just did a better job of answering why wealth exploded after 1800 than this video. Yay me!

  30. This video has not facts at all. No solid statistics. Propanganda basically by the 1% to make you feel like you are lucky to be working for $7 an hour.

  31. The world is 80 times more productive in 2015 than it was in 1890 yet people are still starving to death. Don't let this lady make you believe that this broken crony capitalistic tyrannical government driven society is working.

  32. Anyone able to explain the $3/day from BC-1800 to me.  I'm not sure that one could make enough to eat, much less acquire clothing, shelter, tools, or the occasional…anything (table, goat, weapon, beer) on $3/day…nor do I think that I am able to produce in 12 minutes what a laborer in the 1700's took a day to do, even with all the advantages modern workplaces afford me.

    So, is this $3 of "spending money" on top of what a laborer produces for themselves.  I know most times in history had far more self reliance (so most commoners made their own cloths, grew their own crops, hunted/fished for their family, built their own shelters).  None of that labor earned a wage, so is that all unaccounted for in the $3/day?  

    If in 1700 a community was organized similar to the Amish today, I think their production per person would be far greater than $3/day.

  33. What is the obsession with how much stuff you can buy?  What is the cost of endless devotion to production and money – which is an arbitrary relative, and ultimately abstract concept.  That many people play along with.  And there is coercive reinforcement – sticks (taxation, compulsory open prison i.e. school) – and carrots (shiny stuff, services that you don't need that are presented as necessary or vital or "increasing of happiness" – and that imply unhappiness or unmasculinity or unfemininity, or unatractiveness, or stupidity, or unlovableness – or lack – to not use such services or products)  i.e. advertisements, propaganda, force, and terrorism.

  34. So back in ancient egyptian times the slaves made $3 a day.  And in the days of feudalism the serfs made $3 a day.  Huh, I guess I don't understand slavery and feudalism very well.

  35. That is the best way to say a bunch and not answer the question. That is all wrong. There are only two ways to get rich to make more money than someone or to destroy someone's else opportunity to make make money.

  36. LOL this channel should have its named changed to Learn Indoctrination.

    They never addressed the change in the prices/availability of goods, or how there was little to no regulation back in the old days and now there is TONS, maybe regulation was the reason for the growth in personal income that's an equally logical conclusion based on the information present. They have also only addressed a small period of time following the DARK AGES I would expect people to be barely able to survive at that time. Also consider the Roman Empire or republic your preference, either way that would skew these "results" big time.

  37. Is purchasing power really a good measure of prosperity? We can buy more coffee and burgers but we can't relate to our family or neighbours etc. We can buy more but we can't walk the streets free of fear. We can buy a more but we're stricken with disease all our lives. We can buy more but we have to dig deep into debt to pay for the stuff. The America debt clock says as the 24 August 2015 we are over $18 trillion dollars in debt and rising. So are we really more prosperous?

  38. She is completely right, but she downplayed the importance of investment, especially the invention of the corporation.  Ideas are great, but some of them require a ton of money to make them real.  Without funding from investors they would never have been built.

  39. Please do help us, Philippines still in isolation. Philippines is in protectionist 60/40 foreign ownership policy (40%- foreign) and ultra high corporate tax: 30%. International pressure will do more headache with our government to amend such policy,even our President Aquino Vetoed such amendments from our congress. He's a son of our Oligarchs.
    They say we're performing well economically.The myth about it is that 10% of our population are export labor, and they send money home (remittance) that drives consumerism. People are forced to go out the country for work,since there isn't much in here. It is not an option,but a necessity for us to go abroad. Oligarchs monopolize our businesses here and give out unfair prices, like our power (3rd highest in the world), and a couple of many more unfair practices you can imagine on what monopoly can do. Please do help us educate our citizens as well. Our liberty to opportunity,Services, Business are violated.

    I hope one day there would be mentions of what's wrong about Philippines. Help our cause.

  40. An FYI, I link to this video in the second of my four part series.

  41. Oh, so in the 1600s and 1700s it's the "rise of economic liberty" and "social honor" that made England wealthy, not British Imperialism, the East India Company and it's use of slave labor or drug dealing in China (the so-called Opium Wars). Apparently Gandhi and I had it all wrong! #sarcasm start 16:29 Seriously, what a very myopic point of view coming from a "renowned" prof. Very cool that she's transgender, though!

  42. Seriously! We are spending money we don't have in a system of ever increasing debt! We are using nuclear power for cheap electricity bills THAT ARNT CHEAP knowing full well we can't dispose of the NUCLEAR WASTE it's just storing up an impossible environmental problem for future generations to deal with fuckashima nuclear power plant went boom and is now leaking into the ocean as you read with no sign of a solution!, its currption that keeps the rich rich and the poor dumb and ill informed! you may think 57 varieties of beans is choice but they've all got chemicals in! The air we breath is being polluted by thousands of geo engineering programmes openly discussed in the UN council! Nicola tesla invented created or improved 90% of the modern world that is around us today yet you can Finnish an education and not hear his name? Yet some theoretical physicist that invents nothing of anything around us, backs up totally invisible "uncheckable" science with misleading fancy math that doesn't relate to the real world <what Nicola tesla said about "one stone" sorry EIN STEIN! My money's on tesla! my point is even education has a malevolent nature I see 5 and 6 year old children now getting terrorist attack drills in schools but sure we are all so much more well off? Ps I hope only rich people buy your book as you are only one of the fools fooling the fools!

  43. That would mean people ate a can of tuna and some bread and butter in todays equivalent. Why about the act that most people made their own clothing, grew their own food, raised their own animals, ate eggs from their own chickens, hunted and made fur coats from that. Income wasn't their only source of wealth. Income was just an addition to what they caught or made themselves.

  44. in order to have innovation, you first must have investments. And in order to have investments, you first must have savings

  45. it happened because of finding uses for coal and oil. It was and is practically free energy that our ancestors never had before around 1800.

  46. How about the Scientific Revolution?
    That seems glaringly absent in this video. That was the real source of the innovation referred to here, which was utilized by the inventors, merchants, etc.

  47. 3 dollars in 1800 was real money gold silver and 3 dollars you could buy a bag of flour for five cents, a horse for 10 dollars and a nice saddle for a lifetime 40 dollars. you really cant compared today with then, 130 dollars a day what is that in comparison to 3 dollars a day allowing for inflation? you could buy a pound ofcandy for 3 cents. you could buy land for a couple of hundred dollars and build a house for about the same amount.

  48. She is entirely wrong the transatlantic slave trade made most of the world exceedingly wealthy because of that exploitation created massive amounts of wealth on a large scale then that wealth was used to pave way to innovation and investments.The exploitation of foreign nations resources also helped. The timing was also part of it we became privy to certain knowledge and certain tech at the time. Slavery or "Old Money" was the foundation and establishment of generational wealth for what became and would mostly maintain as the 1-5%.

  49. She forgot to mention the FedReserve & the IMF going to a fiat system and printing money causing inflation and hidden tax. In essence all modern inventions have been devalued to zero

  50. Innovation is made possible by investment: human capital, financial capital, equipment / structures, etc.

  51. what does she mean by when she said the professions were honored? that they got to keep the fruits of their labor? or reputation of the professions?

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