Why are we so Rich?
Our wealth is nothing short of The Greatest Story Ever Told (<---greatest
lecture ever told). We take for granted the wealth that our great-grandparents
considered unimaginable luxury. But where did the wealth come from? How? Why?
It is easy to say "technology," but the Greeks had an
amazing grasp on mathematics, technology and material production. In fact:
"Hero also invented a device called an aeolipile...the
aeolipile was, before anyone knew what to do with such a thing, a steam
engine."
You read that right, the Greeks invented a steam engine (38:00),
and that’s just the start.
The discovery of the antikathera mechanism, a mechanical calendar, demonstrated
that the Greeks not only had an intense theoretical understanding of
mathmatics, but the ability to create a device that "shows a technological
sophistication that was not seen again until clockwork mechanisms were introduced
in the 14th century."
If the Greeks could produce machines that were approximately 1,500
years more advanced than historians previously thought possible, why didn’t
they invent cars, steam ships, or rockets to the moon? Why didn’t they have an Industrial Revolution?
The answer is that "Alexandria wasn’t just a city of
scientists and philosophers. It was a city of engineers" and while
engineers, scientists, and philosophers might be able to produce amazing
things, technology does not instantly convert itself into wealth for the
ordinary person.
So, if it wasn’t technology, why are we so rich?
Historically, the Chinese had the ability to produce far more than
all of Europe.
Even as late as the 1800's the Chinese had such superior
production capabilities that they "saw
themselves as the Middle Kingdom and all other peoples as inferior barbarians."
In fact, when the British Empire first made contact with the Chinese, "Any goods brought as gifts [mechanical clocks, cannons, etc] to the Chinese court were interpreted as tribute."
So, it’s obvious that the Chinese could produce goods at an
unparalleled rate for most of human history, but this production did not lead
to either an industrial revolution or the levels of wealth we see today.
Similarly fantastic stories could be told about the Romans, the
Arabs, and Native Americans, among many others. Amazing technology,
Mathematics, and production are nothing new in human history, but none of it
explains the Industrial Revolution.
Wealth was created by accident.
The English monarchs often battled their barons for control and
power. To a modern audience, it could seem a little like a TV drama:
"The existence of urban centers…was first and foremost the product
of political weakness and the fact that kings found it useful to protect the
independence of cities as a means of undercutting the great territorial lords
who were their rivals...Thus sheltered, the cities evolved as independent communes
that, through growing trade, developed their own resources independent of the
manorial economy." -Francis Fukuyama,
That’s right; wealth was allowed to grow because political power was too weak to stop it. Monarchs offered peasants freedom and rights in order to reduce the power that competing aristocrats could wield. The king didn’t know that freedom would create wealth, much less the Industrial Revolution, but this political decision was the first step in the process that would only become evident hundreds of years later when Adam Smith wrote The Wealth of Nations.
However, many societies have had weak governments, but few ended up creating wealth. So, why are we so rich?
That’s right; wealth was allowed to grow because political power was too weak to stop it. Monarchs offered peasants freedom and rights in order to reduce the power that competing aristocrats could wield. The king didn’t know that freedom would create wealth, much less the Industrial Revolution, but this political decision was the first step in the process that would only become evident hundreds of years later when Adam Smith wrote The Wealth of Nations.
However, many societies have had weak governments, but few ended up creating wealth. So, why are we so rich?
Deirdre Mcclosky argues that Western Europeans were one of the first cultures that finally saw "profit" as a respectable endeavor. In Greek, Roman, and Christian times, profits were seen as illegitimate and merchants were often demonized.
"A Swiss traveler wrote about the same
time that “in England commerce is not looked down upon as being derogatory, as
it is in France and Germany. Here men of good family and even of rank may
become merchants without losing caste.” He meant it literally: in France
and Spain a nobleman caught engaging in commerce could be stripped of his rank."
“In Thebes,” wrote Aristotle with evident
approval, “there used to be a law that one who had not abstained from the
market for ten years could not share in office.”
Just about every society in history has diverted its resources to
warriors, priests, rulers or philosophers. These occupations received a
striking amount of attention because they were highly respected "And so the best minds
went into war or politics or religion or bureaucracy or poetry. Some still do." It wasn’t until people had
both freedom and respect for merchants that society had the
motivation, and ability, to seek profits and reinvest capital.
Why are we so rich?
"The Tide Came from a
New Dignity and a New Liberty for the Ordinary Bourgeoisie and Its Innovations"
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