For much of human history, most people lived in the world of poverty and hard labor described by that most dismal of early economists, Thomas Malthus. In brief, Malthus reasoned that any increase in food supply would be quickly outpaced by increased population, thus forever depressing living standards to bare subsistence.
So when did we fortunate ones who live in prosperous countries escape this “Malthusian trap?” UC Berkeley economist Brad DeLong says it was roughly in the year 1870, when British and American engineers “invented invention.”
DeLong tells the fascinating story in lecture 4 of his new course, The Economic History of the Twentieth Century (website, audio files). DeLong uses the career of prolific inventor and prototype mad scientist Nikola Tesla to illustrate how venture capital first began to fuel a steady stream of innovation which bankrolled geniuses like Tesla.
Now at last, productivity increases began to outpace population increases, and the modern world of prosperity was born.
When I first tuned in to this course, I was a bit afraid it might be mostly a rerun of DeLong’s excellent Economic History of the United States. But not to worry — while DeLong inevitably recycles some material, there is also lots that’s new.
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