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- [Don] 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
of 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 1 in 200.
Due to better nutrition, we grow to be four inches taller
than we were just 250 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 lived in 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 filth 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 of the things they consumed.
They made a lot of their own clothing,
grew most of their own food, and built their own dwellings.
Fast forward to today and believe it or not,
none of us has a hint of 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.
The 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 a 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 of 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 we look around, and 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.
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