Wednesday, April 3, 2013

Here's a history puzzle -- why did economies
starting growing at compounding rates?
Before about 1700-1750, economies had short
spurts of growth but didn't continuously grow.
As a result, the average person lived about the
same in 1700 as they did in Roman times.
So 2 millenia of flat economes.

But after 1750, economies grew year by year.
Compounded growth at even 1% will result in
huge gains after a century or two.
I'm really perplexed why this happened.
Was it due to:
- development of corporations?
- better transportation? Sea-faring?
- societal views of money and debt?
- coffee houses (that encouraged trade)?
- stock exchanges?
- energy from coal mines?
- all of the above?

I'm stumped but it looks like the origin
of the change began in the Netherlands.
Whatever the reason, it's power caused the
rise in power of Europe then the USA.

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