The History of Global Economic Development and Prosperity
The state of human prosperity is a reflection of the global economy’s ability to support the human population. The history of global economic development is marked by periods of significant growth, driven by a variety of factors.
During the Age of Discovery, the Silk Road (Han dynasty, 202 BCE – 220 CE) facilitated an increase in economic, cultural, political, and religious interactions between the Eastern and Western worlds. Thanks to the newly developed trade routes economies grew and Europeans were introduced to Chinese tea and other exotic products. Economies grew and human prosperity increased as a result.
The Industrial Revolution of the 18th-19th centuries transformed largely agricultural economies into economies based on large-scale industry, mechanized manufacturing, and the factory system. New machines, new power sources, and new ways of organizing work made existing industries more productive and efficient. Economies grew and human prosperity increased as a result.
The post-WWII Golden Age of Capitalism (1945-1973) was a period of worldwide economic expansion driven by a significant increase in industrial production, low interest rates, and cheap oil. Economies grew and human prosperity increased as a result.
Most recently, the Age of Globalization has been a period in which technological advancements in communication and transportation facilitated increased international trade and investment, further integrating global economies. Economies grew and human prosperity increased as a result.
Acceleration of Economic Growth and Global Prosperity
In order for prosperity to increase, the underlying economy needs to grow at a rate faster than that at which the population is growing. This has certainly been the case for most of recorded history, but the pace of growth has increased significantly since the beginning of the 20th century. It took almost 7,000 years for the human population to reach 1.6 billion in 1900. Since then, the human population has grown to 8.2 billion (413% increase). Conversely, the estimated per capita GDP in 1900 was approximately $2,700. Since then, it has grown to $17,527 (549% increase). The current level of global economic prosperity reflects the fact that economic growth has outpaced population growth.
But there are challenges…
Although global economic prosperity is at an all-time high and growing quickly, one would be wrong to assume that the fruits of that prosperity are equitably distributed, or that this prosperity has not come at a high price to our environment and many aspects of our wellbeing. Rapid change, even when the change is net positive, often creates imbalances that present new challenges.
The rapid pace of economic growth that has underwritten global prosperity for the last 50 years is no exception. Although overall global prosperity has increased, it has come at the expense of our environment, and created imbalances within nations and across nations that have fueled economic and political instability, geopolitical tensions resulting in trade fragmentation, supply chain disruptions, inflation, etc… Societies need to better understand how the byproducts of uneven economic development contribute to bigger problems that can undermine the very prosperity they are striving for.
A more prosperous future will depend on better policy making
Future global economic prosperity will require more thoughtful policy solutions that address these increasingly complex challenges. Policy makers will need to take a multidisciplinary approach when studying these challenges in order to better understand their nature and draft more thoughtful and effective policies to address them. Effective policymaking will therefore require input from experts from a wide range of disciplines – economists, political scientists, historians, diplomats, lawyers, and public/global health experts, just to name a few.
The Ong Initiative for the Study of Global Economic Prosperity
The academic architecture of the Yale Jackson School of Global Affairs is purposely designed to facilitate a multi-disciplinary approach to solving the world’s most pressing and complex challenges. The Ong Initiative for the Study of Global Economic Prosperity will leverage the resources of the Jackson School to advance research and teaching around issues related to global economic development and prosperity.