World economic history in two diagrams

Gregory Clark opens A Farewell to Alms with a strong claim:

The basic outline of world economic history is surprisingly simple. Indeed it can be summarized in one diagram: figure 1.1.

Clark (2007) Figure 1.1

I like Clark’s claim, but I’m now convinced that we need a second. From Michael Kremer’s Population Growth and Technological Change: One Million B.C. to 1990:

Figure I plots the growth rate of population against its level from prehistoric times to the present.

Kremer (1993) population growth

Even though there was negligible per person income growth through the Malthusian era, technological change was accelerating. As more people leads to more ideas (as there are more people to come up with them), a larger population leads to faster technological progress. Technological progress in turn allows for further population growth. The resulting pattern is faster than exponential growth in technology and population – a dynamic that does not show up in Clark’s chart.

If I were to stretch it to a third diagram I would want something that captures the dynamism of the Malthusian era – population bottlenecks, different rates of growth across different populations and the like – but I’m not sure what that chart would look like yet.

5 thoughts on “World economic history in two diagrams

  1. Forget about a char to capture such level of complexity in an intuitive presentation. You need something like a video…

  2. Historically people have used income as a measure of progress but as economists we know that people are utility maximisers not profit maximisers and what constitutes progress is not necessarily wealth or income (but this is old news). I like these charts but they could be misleading in terms of trends and capturing economic history in this regard and how it might move forward (not at all suggesting this is your point).

    Going forward, with the use of techniques like hedonic prices, preference relevlation techniques, and WTP/ WTA, we will be able to more accurately quantify utils. Social media and technology improvements that are happening now will catapult the use of these studies (I think they already have) and help redefine policy and societal organisation. Utility rather than income will become the primary focus. Food for thought and comments welcome :)

    1. Sorry, to follow on I think that the increased knowledge of values and costs combined with technology might be a game changer. I think smart people (rather than population per-say – though I see the connection) drives technology and therefore progress towards greater utility. As people become more aware the policy might change – think reverse baby bonus with a selection criteria etc. As unpalatable as some of these ideas might seem, if it happens it might change the evolutionary constitution of the population gong forward… Maybe… Don’t know enough about evolution to be entitled to comment so this is just a thought. What do you think from an evolutionary perspective?

      1. I’m with you on this. My new working paper (coming out any day now) combines Kremer’s population model with the evolution of “innovative potential” – which encompasses intelligence etc.

        Tools such as a tailored baby bonus (is this really what Abbott’s maternity leave scheme is?) are a bit slow. I think the “new eugenics” might deliver some quicker ways to increase those smarts.

    2. Maybe we should measure fitness (genetic contribution to the next generation), although that’s a bit zero-sum. We’re also not programmed for that ultimate goal, but rather proximate objectives that achieve it – so there’s the question of which level objective we should measure.

      I think I’d stick with the first chart regardless of how well could measure utility (whatever your preferred unit), as it’s only because of that big spike at the end we can even think about it. Maybe you can have the fourth chart?

      I’m relatively skeptical about measuring those things particularly well, whatever our techniques. A lot of those tools require us to state choices or to have our choices observed, but I’m not sure that we’re very good at choosing what will maximise whatever it is we want to maximise. And then there is the time dimension. Would we maximise experienced or remembered utility?

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