Derek Thompson's "The Economic History of the Last 2000 Years" is an interesting bird's-eye view of economic history. I've seen similar accounts in Gregory Clark's A Farewell to Alms. He accounts for the rise in productivity of the West in terms of Enlightenment, Industrial Revolution and capitalism, but Derek Thompson explains how prior that, population alone accounts for productivity. Perhaps that's obvious, but to me it is a great explanatory insight and I've not seen it elsewhere.

"The Economic History of the Last 2000 Years" is actually a series of three articles. I will try to boil them down to essential data and observations.

In The Economic History of the Last 2,000 Years in 1 Little Graph Thompson provided the following chart showing the major powers' share of world GDP:



Why do India and China account for more than 50% of the world's GDP prior to 1500? Well, they accounted for 1/3 and 1/4 of the world's population. Thompson explains: "Before the Industrial Revolution, there wasn't really any such thing as lasting income growth from productivity. In the thousands of years before the Industrial Revolution, civilization was stuck in the Malthusian Trap. If lots of people died, incomes tended to go up, as fewer workers benefited from a stable supply of crops. If lots of people were born, however, incomes would fall, which often led to more deaths. That explains the "trap," and it also explains why populations so closely approximated GDP around the world."

He summarizes: "Everything to the left of 1800 is an approximation of population distribution around the world and everything to the right of 1800 is a demonstration of productivity divergences around the world.


In The Economic History of the Last 2000 Years: Part II he points out that's not exactly right because incomes had started rising in the West around the 1500s.

The chart belows captures the Malthusean Trap up until "between 1000 and 1500 wages in Western Europe started to inch up thanks to moderate technologies and agrarian organization, such as three-field rotation and horse harnesses."



If you broaden the view a bit to 1800, the GDP/capita data show even better the divergence between the West and the rest of the world:



And if we shift focus a bit more, we see how massive the divergence was:



Thompson explains: "There are enough theories about why the Industrial Revolution happened in northern Europe between 1700 and 1800 to fill a million blog posts. Two well-known recent additions are Guns, Germs and Steel, which focuses on the peculiar and advantageous geography of norther Europe and its natural resources, and A Farewell to Alms, which provides the quirky but often persuasive explanation that the Malthusian Trap ironically populated England with workers whose upper-class values made them biologically better adapted to invent and use modern technology."

The final chart puts it all together and extends it to more recent tidmes where others begin to catch up:




In The Economic History of the Last 2000 Years: Part III, Thompson takes another look at the "economic history of the world since Jesus." The gap between 1 and 1000 is because no data exists, but it still provides a good picture.



Then he returns to populations and charts them for comparison. Thompson explains: "This graph, from the same historical data set, shows the distribution of people across regions for the last 2000 years. As you'll see, it's a much more static picture than GDP. China, India, and south-east Asia are still among the densest places on earth, just as they were 2000 years ago. Western Europe is still highly livable. Africa's share of the world's population has rarely deviated from 7% - 13% band. Two millennia ago, Japan had 1.3% of the world's people. Today it has about 2%."



He looks at that closer accounting for it. He concludes: "In one fascinating passage of Clark's book, he produces a table of laborers' wages measured in pounds of wheat, starting in Ancient Babylonia and taking us through 1780's England. This statistic is so important because it measures what ancient workers wages could actually buy. In the last 200 years, food has gone from 80 percent of our budget to about 10 percent. That's a great indication that we've gotten richer and that our wages are stronger relative to the stuff we want."