Summary of William J. Bernstein'sThe Birth of Plenty

By IRB Media

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#1 There are four institutions that are prerequisite for economic growth: secure property rights, a scientific method, a capital marketplace, and rapid communication.

#2 The world has gotten better in the past fifty years, not worse. The proportion of the world’s population subjected to totalitarianism, genocide, starvation, war, and pestilence has been decreasing over the past two centuries.

#3 The modern world seems to stagger under the load of ever-increasing population, with each year adding scores of millions of new mouths to feed. Overcrowding on our planet is a recent phenomenon, an artifact of the world’s newfound prosperity.

#4 The Malthusian trap is the idea that as a nation’s population grows, its food supply does not, and thus the standard of living is inversely proportional to the number of mouths to feed. If population increases, there won’t be enough food to go around, and prices will rise while wages fall.

• Language: English
• Publisher: IRB Media
• Release date: May 21, 2022
• ISBN: 9781669394884

IRB Media

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Insights on William J. Bernstein's The Birth of Plenty

Contents

Insights from Chapter 1

Insights from Chapter 2

Insights from Chapter 3

Insights from Chapter 1

#1

There are four institutions that are prerequisite for economic growth: secure property rights, a scientific method, a capital marketplace, and rapid communication.

#2

The world has gotten better in the past fifty years, not worse. The proportion of the world’s population subjected to totalitarianism, genocide, starvation, war, and pestilence has been decreasing over the past two centuries.

#3

The modern world seems to stagger under the load of ever-increasing population, with each year adding scores of millions of new mouths to feed. Overcrowding on our planet is a recent phenomenon, an artifact of the world’s newfound prosperity.

#4

The Malthusian trap is the idea that as a nation’s population grows, its food supply does not, and thus the standard of living is inversely proportional to the number of mouths to feed. If population increases, there won’t be enough food to go around, and prices will rise while wages fall.

#5

In pre-industrial England, population rose as product per head fell. The escape from the trap was made possible not by an increased birth rate but by a 40 percent decline in the death rate, which was the result of rapidly improving living standards.

#6

The growth in the British economy was initially extensive, caused by the increase in population alone, without any real improvement in the wealth or material comfort of the average citizen. By the nineteenth century, however, growth had become intensive, outpacing even the human urge to reproduce.

#7

The Industrial Revolution, which took place around 1820, was fueled by new technology. Four things were needed to develop this technology: property rights, scientific rationalism, capital markets, and the assurance that a person can keep most of his just reward.

#8

The four factors that make a nation prosperous are property rights, scientific rationalism, effective capital markets, and efficient transport and communication. These four factors first coalesced in sixteenth century Holland, but were not securely in place in the English-speaking world until about 1820.

#9

The heroes of this quantitative story are the economic historians who have spent their lives uncovering the outlines and contours of human well-being over the centuries. Chief among them is Angus Maddison, who studied under Dharma Kumar.

#10

The global economy took off around 1820, and has been growing ever since. The average person’s well-being did not change at all during the first millennium after the birth of Christ. From the perspective of the Romance language expert or the art historian, the Renaissance was the pivotal point of the second millennium.

#11

Economic historians have found it easy to criticize Maddison’s estimates of income and production in centuries past. How can he be certain that the annual per capita GDP of Japan in the birth of Christ was $400 in current dollars, rather than $200 or $800.

#12

The urbanization ratio is a measurement of the proportion of the population that lives in cities larger than 10,000. In the Middle Ages, only a small percentage of the populace lived in cities of more than 10,000. By 1500, the largest city in Europe was Naples, with 150,000 inhabitants.

#13

The post-Roman world was characterized by small per capita growth rates. The beauty of examining very long historical sweeps is that this washes out even large uncertainties about growth. If, over a period of a thousand years, we overestimated the beginning or ending per capita GDP by a factor of two, this would entail an error of just 0. 07 percent per year in the annual growth rate.

#14

The growth of real per capita GDP in sixteen nations over the twentieth century is shown in Table 1-1. The most spectacular example of the resiliency of Western economies is the recovery of per capita GDP in postwar Germany and Japan.

#15

The Western growth machine, in contrast, reduces the catastrophe of conquest to a mere historical hiccup. By 1990, Japan’s relative per capita GDP had grown to the point where it approached that of the U. S.

#16

The beginning of the nineteenth century did not