Most all of our ancestors lived in poverty and often faced starvation, incurable diseases, infant mortality, and short life expectancies, even of adults. Today, even the poorest American families enjoy a roof over their heads, a solid floor under their feet, running water, a flush toilet, and electricity. Those were all unimaginable luxuries, far beyond the dreams of our ancestors, only a few generations ago.
Don Boudreaux of MRUniversity (an online educational service not affiliated with any traditional college or university) explores the question economists have been asking since the era of Adam Smith: what creates wealth? On a timeline of human history, the recent rise in standards of living resembles a hockey stick, flatlining for all of human history and then skyrocketing in just the last few centuries.
Without specialization and trade, our ancient ancestors only consumed what they could make themselves. Today, the majority of us are employed at producing just one or a very few products or services and then we all share the benefits of today’s economy.
You can view Don Boudreaux’s video at http://youtu.be/t9FSnvtcEbg or in the video player below: