16.

16. Deirdre McCloskey has a wonderful new book on economic history. (I’ll tell you the title in a couple days. The title gives her answer to the most important question in economic history). She says: “The heart of the matter is sixteen.” Real income per head in the countries that have experienced modern economic growth is greater than the income per head in 1700 or 1800 by a factor of at least 16. She takes 16 as the minimum number and then points out that when improvements in quality are taken into account (think longer lives), the improvement is much greater than 16. If you graph real income per capita in England from the year 1200 to the present, the curve forms almost a right angle. The line is basically a flat horizontal until a point in the late 1700’s when it begins to go almost straight up. I described the curve in this post about an essay by the Nobel prize winner Robert Solow. This curve summarizes how the lives of the ordinary person have changed from poverty to affluence. How did it happen? Why did it happen? Why didn’t it happen sooner?