The Economic History of the Last 2,000 Years in 1 Little Graph

More

Update: Read Part II and Part III

That headline is a big promise. But here it is: The economic history of the world going back to Year 1 showing the major powers' share of world GDP, from a research letter written by Michael Cembalest, chairman of market and investment strategy at JP Morgan. 

Screen Shot 2012-06-20 at 9.37.55 AM.png
I'm guessing that your first question, if you started scanning from the left, is: Wait, India was by far the biggest economy at the dawn of AD? Yup, India.

In Year 1, India and China were home to one-third and one-quarter of the world's population, respectively. It's hardly surprising, then, that they also commanded one-third and one-quarter of the world's economy, respectively.

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.

The industrial revolution(s) changed all that. Today, the U.S. accounts for 5% of the world population and 21% of its GDP. Asia (minus Japan) accounts for 60% of the world's population and 30% of its GDP.

So, one way to read the graph, very broadly speaking, is that 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 -- the mastering of means of manufacturing, production and supply chains by steam, electricity, and ultimately software that concentrated, first in the West, and then spread to Japan, Russia, China, India, Brazil, and beyond.

(via Paul Kedrosky)



Jump to comments
Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

Get Today's Top Stories in Your Inbox (preview)

Adventures in Legal Weed

Colorado is now well into its first year as the first state to legalize recreational marijuana. How's it going? James Hamblin visits Aspen.


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

Adventures in Legal Weed

Colorado is now well into its first year as the first state to legalize recreational marijuana. How's it going? James Hamblin visits Aspen.

Video

What Makes a Story Great?

The storytellers behind House of CardsandThis American Life reflect on the creative process.

Video

Tracing Sriracha's Origin to Thailand

Ever wonder how the wildly popular hot sauce got its name? It all started in Si Racha.

Video

Where Confiscated Wildlife Ends Up

A government facility outside of Denver houses more than a million products of the illegal wildlife trade, from tigers and bears to bald eagles.

Video

Is Wine Healthy?

James Hamblin prepares to impress his date with knowledge about the health benefits of wine.

Video

The World's Largest Balloon Festival

Nine days, more than 700 balloons, and a whole lot of hot air

Writers

Up
Down

More in Business

Just In