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The Birth of Plenty: How the Prosperity of the Modern World Was Created [NOOK Book]

Overview

"...a tour de force...prepare to be amazed."



--John C. Bogle, Founder and Former CEO, The Vanguard Group



A bold new look at the continuing era of prosperity--how we got here, and where we could be ...

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The Birth of Plenty: How the Prosperity of the Modern World Was Created

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Overview

"...a tour de force...prepare to be amazed."



--John C. Bogle, Founder and Former CEO, The Vanguard Group



A bold new look at the continuing era of prosperity--how we got here, and where we could be headed



Why didn't the Florentines invent the steam engines and flying machines that Da Vinci sketched? What kept the master metallurgists of ancient Rome from discovering electricity? The Birth of Plenty takes a fascinating new look at the key conditions that had to be in place before world economic growth--and the technological progress underlying it--could occur, why those pathways are still absent in many parts of today's world, and what must be done before true, universal prosperity can become a reality.





"Not long after 1820, prosperity began flowing in an ever increasing torrent; with each successive generation, the life of the son became observably more comfortable, informed, and predictable than that of the father. This book will examine the nature, causes, and consequences of this transformation..."



--From the Introduction



The Birth of Plenty doesn't mean to suggest that nothing of note existed before 1820. What The Birth of Plenty suggests--and supports with irrefutable fact and groundbreaking analysis--is that, from the dawn of recorded history through 1820, the "mass of man" experienced essentially zero growth, either in economic standing or living standards. It was only in the third decade of the nineteenth century that the much of the world's standard of living began to inexorably and irreversibly improve, and the modern world was born.



But what changed, and why then? Noted financial expert and neurologist William Bernstein isolates the four conditions which, when occurring simultaneously, constitute an all-inclusive formula for human progress:



  • Property rights--Creators must have proper incentives to create


  • Scientific rationalism--Innovators must be allowed to innovate without fear of retribution


  • Capital markets--Entrepreneurs must be given access to capital to pursue their visions


  • Transportation/communication--Society must provide mechanisms for effective communication of ideas and transport of finished products




Beyond just shining a light on how quickly progress occurs once the building blocks are in place, however, The Birth of Plenty examines how their absence constitutes nothing less than a prescription for continued human struggle and pain. Why do so many parts of the world remain behind, while others learn to adapt, adopt, and move forward? What must long-troubled nations do to pull themselves from the never-ending spiral of defeatism? The Birth of Plenty addresses these timely and vital questions head-on, empirically and without apology, and provides answers that are both thought-provoking and troubling.



The Birth of Plenty frames the modern world's prosperity--or, in far too many cases, continuing lack of prosperity--in terms that are ingenious yet simple, complex yet easily understood. Entertaining and provocative, it will forever change the way you view the human pursuit of happiness, and bring the conflicts of both the world's superpowers and developing nations into a fascinating and informative new light.

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Editorial Reviews

Publishers Weekly
Rather than dry academic analysis, Bernstein, in his second book (after Four Pillars of Investing), has created a vital, living text-a cogent, timely journey through the economic history of the modern world. He identifies institutions ("the framework within which human beings think, interact and carry on business") as the engines of prosperity. Boiled down to four (property rights, the scientific method, capital markets and communications), these institutions come from ideas and practices that bubbled forth over the course of hundreds of years. Bernstein is clear in explaining that the civilizations that develop and implement these systems thrive, and that those that do not, perish. The Spanish empire, for example, had most of these but lacked effective capital markets. When the gold from the New World dried up, the empire essentially went broke. By 1840 the British had all of these institutions in place, economic growth exploded and the lot of the common man was immensely improved. Today, the U.S. faces the challenge of sustaining prosperity in the face of rapid technological change. Though fairly Eurocentric in focus, Bernstein's narrative tracks the development of these essential ingredients to prosperity over a global landscape-the great dynasties of China get plenty of attention here, as do the Japanese. Solid writing and poignant assessments of the economic players throughout time give texture and flavor to Bernstein's argument: he describes the medieval relationship between the various European kingdoms and the Vatican as "a holy shakedown racket." Packed with information and ideas, Bernstein's book is an authoritative economic history, accessible and thoroughly entertaining. (May) Copyright 2004 Reed Business Information.
Library Journal
Bernstein's (The Four Pillars of Investing) premise here is that prosperity will flow "once a society acquires the four crucial factors-property rights, scientific rationalism, capital markets, and modern transportation and communication." In the first of three sections, the author covers the sources of growth. He chronicles the history of property ownership, technological invention and its impact on prosperity, the roots of the capital markets, and the benefits of machines to production. Then he profiles countries that have been historically considered economically successful, such as Holland and Japan, and he theorizes about why some areas, such as Africa and Latin America, have been left behind. Bernstein then applies the concepts discussed to modern-day life. He discusses such issues as the way in which prosperity contributes to a country's well-being and what inequalities can result from economic growth. This fascinating, well-written look at how the concept of prosperity has evolved over centuries is recommended for all collections.-Stacey Marien, American Univ., Washington, DC Copyright 2004 Reed Business Information.
Soundview Executive Book Summaries
How the Modern World's Prosperity Was Created
In an effort to uncover the cultural and historical factors that converged during the early 1800s and ignited the great economic boom of the modern world, historian and author William Bernstein has written The Birth of Plenty. Bernstein rises to the occasion of explaining how the world and its economy reached its present state while keeping readers absorbed - providing them with a framework that explains why any nation is rich or poor, democratic or totalitarian, weak or powerful, and whether or not citizens are satisfied with their lives.

Bernstein divides The Birth of Plenty into three parts: why, how and whither. First, he defines economic growth's ultimate sources; then he describes how these factors played out in various nations. He then focuses on the sociological, political and military consequences of the modern world's explosive economic growth.

Great Questions
By exploring the sources of economic growth, he provides insights into many of the questions that people seek about themselves, including:

  • What is happening to the overall well-being and satisfaction of the average person in a world that is becoming not only more wealthy but also more complex, fast-paced and stressful?
  • What is the relationship between wealth and democratic development?
  • What does economic progress, and the growing inequality of wealth among nations, hold in store for the world's political future?
  • What are the prospects for successfully exporting democracy to countries like Iraq and Afghanistan?
  • How has the evolution of modern prosperity affected the current balance of power in the world?
  • Is the military ascendency of the United States a historical accident, and can it be expected to continue?
  • How effectively can non-Westerners, particularly in the Moslem world, wield political and military power?


While digging into the story of world economic growth, Bernstein ventures into the fields of law, history, philosophy, celestial mechanics, theology, public policy, sociology and economics. By bringing together these disparate fields into a single story that tackles some of the largest questions people can ask, the author paints a vivid picture of the past that gives readers deeper insight into the future to which they are headed. Bernstein synthesizes numerous issues into specific and understandable theories about why world economic growth - and the technological progress that fueled it - suddenly exploded when it did. At the root of his question is why life in the 18th century, described by one author as "solitary, poor, nasty, brutish, and short," changed so drastically in less than two centuries.

Instantaneous Communication
To describe how technological progress has actually been slowing since 1850, not accelerating, Bernstein writes that the average inhabitant of the Western world alive in 1950 would have no trouble grasping the technology of the year 2000, but "a citizen from 1800 would have been completely disoriented by everyday life 50 years later." As an example, the author points out that in 1801, nothing moved faster than the speed of a horse. But, he writes, the invention of the telegraph and instantaneous communication in 1837 "abruptly altered the face of economic, military, and political affairs in ways that dwarf the changes wrought in this century by the airplane and the computer."

According to Bernstein, there are four factors that are essential ingredients for igniting and sustaining economic growth and human progress: property rights, scientific rationalism, capital markets, and improvements in transport and communication. Bernstein first examines the nature, causes and consequences of the transformation in human well-being that began to unfold shortly after 1820, and identifies the points in both time and space where economic growth bloomed after thousands of years of dormancy.

Next, Bernstein describes how and when those four factors came into play, from Holland and England, to the rest of Europe and East Asia. The Birth of Plenty describes the sociological, political, economic and military consequences of the discrepancies in personal and national wealth that have risen from this birth of plenty, and their present and future implications.

Why We Like This Book
Bernstein's rich examination of the effects of economic growth are made even more relevant by his additional insight into the role this growth has played in various peoples' lives. By seeking to learn more about how our world prospered when and where it did, Bernstein provides us with a better idea of where we are all heading. Copyright © 2004 Soundview Executive Book Summaries

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Product Details

  • ISBN-13: 9780071442916
  • Publisher: McGraw-Hill Education
  • Publication date: 6/1/2004
  • Sold by: Barnes & Noble
  • Format: eBook
  • Edition number: 1
  • Pages: 434
  • Sales rank: 1,146,107
  • File size: 3 MB

Meet the Author

William Bernstein, Ph.D., M.D. (North Bend, OR) founded the popular website efficientfrontier.com. A practicing neurologist and the author of The Intelligent Asset Allocator and The Four Pillars of Investing, Dr. Bernstein has an intensely loyal following of readers as well as an extensive network of media contacts. He is often quoted in The Wall Street Journal and is a frequent guest columnist for Morningstar.

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Read an Excerpt

THE BIRTH OF PLENTY

How the Prosperity of the Modern World Was Created


By WILLIAM J. BERNSTEIN

The McGraw-Hill Companies, Inc.

Copyright © 2004The McGraw-Hill Companies, Inc.
All rights reserved.
ISBN: 978-0-07-174704-2


Excerpt

CHAPTER 1

A Hypothesis of Wealth


The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together.

—Karl Marx, Manifesto of the Communist Party

It's all too tempting to lament the state of the world, particularly when you focus on the melodramas of mankind—violent conflicts, large-scale malfeasance and failure, and the latest installments in the age-old racial and religious hatreds that permeate the human story.

A paragon of such fashionable pessimism has been journalist Anthony Lewis, who, at the end of a long and distinguished career, was asked whether the world had gotten to be a better place since he had begun covering it a half century earlier:

I have lost my faith in the ideal of progress. I mean that in the sense that it was used at the beginning of the twentieth century, that mankind is getting wiser and better and all—how, how can you think that after Rwanda and Bosnia and a dozen other places where these horrors have occurred?


Mr. Lewis' problem is that his subjective criterion—that mankind has not achieved moral perfection as defined in Ivy League universities and the editorial suites of the New York Times—sets the bar too high. Mr. Lewis seems unaware that we can measure the welfare of mankind; in fact, we can do it superbly. Contrary to his gloomy impressions, the second half of the twentieth century was far less murderous than the first. Further, the proportion of the world's population subjected to totalitarianism, genocide, starvation, war, and pestilence has been steadily decreasing over the past two centuries, with most of the improvement coming in the half century that so depressed Mr. Lewis.

Consider that from 1950 to 1999, average life expectancy in the developed world increased from 66 years to 78 years; in the developing world, it increased from 44 years to 64 years. The nearly universal Western outcome of living to old age, rather than resulting from the rare stroke of luck, may be the greatest accomplishment of the past fifty years. Or consider that over the same period, the world's real per capita gross domestic product (GDP)—the amount of goods and services produced by the average person, adjusted for inflation—nearly tripled. Or that by the year 2000, real per capita GDP in Mexico was significantly greater than that of the world leader in 1900, Great Britain. And if you're not impressed with mankind's material progress in the last fifty years, as measured in dollars and cents, you should at least note that almost any measure of social progress you wish to examine—infant mortality, literacy and mortality rates, or educational levels—has dramatically improved in all but a few still-benighted corners of the planet.


ESCAPING THE TRAP

The modern world seems to stagger under the load of ever-increasing population, with each year adding scores of millions of new mouths to feed. At the birth of Christ, Earth supported slightly more than 250 million people, by 1600, about a half billion. Sometime around 1800, the one billion mark was reached, the second billion was added by 1920, and the third attained in 1960. Presently, there are in excess of six billion souls on our planet. The increasing congestion of urban life, particularly in the third world, gives the impression that the world's population is growing far faster than the 1.85% annual rate of the past half-century.

Overcrowding on our planet is a recent phenomenon, an artifact of the world's newfound prosperity. Before the modern era, famine, disease, and war more often than not overwhelmed the human inclination to procreate. Over the first two million years of human history, population growth did not greatly exceed 0.001% per year. After the advent of agriculture 10,000 years ago, the rate of population growth increased to approximately 0.036% per year, and in the first century A.D., to 0.056% per year. After 1750 the growth rate climbed to 0.5% per year, passing 1% only in the early twentieth century.

In modern times, the dismal economics of increasing population is virtually synonymous with Thomas Malthus. Born of local gentry in 1766, he graduated from Cambridge with honors in 1788. Like many bright young university men of the time in England and Scotland, he fell under the sway of Adam Smith's new science of "political economy" and devoted his life to the quantitative study of humankind.

The England of the aspiring economist's formative years seemed as Hobbesian as Smithian—a time of worsening food shortages and not a little famine, particularly in neighboring Ireland. In 1795–96 and 1799–1801, war and poor harvests combined to cause food riots in England. The root cause of the shortage was obvious to Malthus: "The power of population is infinitely greater than the power of the earth to produce subsistence for men." Humans can reproduce rapidly, whereas agriculture is subject to the law of diminishing returns. The natural tendency, then, is for humanity to outrun its food supply. (The common conception of Malthus's thesis is that population increases geometrically, while the food supply increases arithmetically.)

Malthus's infamous "positive checks" were not limited to the classic fama, pestis, et bellum (famine, plague, and war), but also included a host of lesser evils: unhealthy working conditions, backbreaking labor, overcrowded and unsanitary housing, and poor child rearing. If, for a brief moment, food became plentiful, population would rise rapidly. Soon enough, though, the increased supply of workers would drive down wages. This would make food less affordable and, discouraging marriage, would slow population growth. Low wages would then induce farmers to hire more workers, which would, in turn, bring more land into production, starting the whole process again at a slightly higher level of population and food production—the notorious "Malthusian Cycle."

In Malthus's harsh world, a nation's food supply—and its population—grew slowly, if at all, so the standard of living was inversely proportional to the number of mouths to feed. Were population to increase, there would not be food enough to go around. Prices would rise, while wages, and the standard of living in general, would fall. If, on the other hand, the population were suddenly to plunge, as happened during the Black Death of the mid-fourteenth century, the survivors' food supply, wages, and standard of living would rise dramatically.

Malthus had observed firsthand the late-eighteenth century famines, which burned this sequence of events into his consciousness. Figure 1–1 plots the per capita GDP of England from 1265 to 1595 versus population size. The thin, crescent-shaped distribution of the data points depicts the "Malthusian Trap." Historian Phyllis Deane neatly summarizes the concept:

When population rose in pre-industrial England, product per head fell: and, if for some reason (a new technique of production or the discovery of a new resource, for example, or the opening up of a new market), output rose, population was not slow in following and eventually leveling out the original gain in incomes per head.


In this eternal cycle, agricultural production might rise, but population followed in lockstep, dooming mankind to a near-subsistence-level existence.

Paradoxically, soon after Malthus immortalized this grim state of affairs in 1798 with his Essay on the Principle of Population, it abruptly came to an end in Western Europe. Figure 1–2 shows that a bulge developed in the cr
(Continues...)


Excerpted from THE BIRTH OF PLENTY by WILLIAM J. BERNSTEIN. Copyright © 2004 by The McGraw-Hill Companies, Inc.. Excerpted by permission of The McGraw-Hill Companies, Inc..
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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Table of Contents

Preface
Introduction 1
Sect. I The sources of growth
Ch. 1 A hypothesis of wealth 9
Ch. 2 Property 51
Ch. 3 Reason 91
Ch. 4 Capital 125
Ch. 5 Power, speed, and light 161
Ch. 6 Synthesis of growth 189
Sect. II Nations
Ch. 7 The winners - Holland and England 195
Ch. 8 Runners-ups 233
Ch. 9 The last 273
Sect. III Consequences
Ch. 10 God, culture, mammon, and the hedonic treadmill 297
Ch. 11 The great trade-off 335
Ch. 12 Mammon and Mars : the winner's curse 349
Ch. 13 The end of growth? 373
Ch. 14 When, where, and whither 379
Notes 387
Index 403
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Customer Reviews

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Sort by: Showing all of 5 Customer Reviews
  • Anonymous

    Posted February 18, 2005

    SKIP THIS ONE TRY EMPIRE OF WEALTH

    Birth of Plenty is a bad book. It is too superflous and staccato. The prose is crip but curt at places and the picture it paints not worth the canvas. I saw some reviews here and most agree with this perspective, except they then go on and give a positive rating anyway. I do not. John Steele Gordon's Empire of Wealth rocks. I think it is sold on BN.com as well. Very competent history very well told.

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  • Anonymous

    Posted August 3, 2004

    Highly Recommended!

    Gertrude Stein called Ezra Pound, 'a village explainer,' and said that was fine if one happened to be a village. Author and historian William J. Bernstein is an explainer, so put on your village thinking cap. This sprawling book skips over a broad surface of economic history, theology, sociology, engineering, politics and mechanics, like a flat pebble over a smooth pond. Readers with scant grounding in these disciplines can still have a good time as they gaze slightly slack-jawed at this colorful, fast-moving assemblage of facts, theories and prejudices, all mixed, mingled and as surprising as a carnival parade. Readers who know these subjects, on the other hand, will relish the sweep of Bernstein's saga even if they balk at the inevitable simplifications, exaggerations, contradictions and foggy facts that result from compressing world economic history into 400 pages. Bernstein arranges his history around the four pillars that, he says, support continual economic growth: property rights, the scientific method, capital markets and communications. Given that framework, his presentation is logical and lively. We liked this entertaining read, which is imbued with a history buff's excitement.

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  • Anonymous

    Posted April 6, 2004

    Simply Outstanding

    Normally, I read histories, but not economic books. This one first caught my attention with its title and then its cover. From the very beginning I was seduced by the clarity of the prose and the unique perspective this book offers on our past development and future prospects. Bernstein explains his theories and illustrates them with case studies of Holland, England, Spain, France, and Japan, followed by the Ottoman Empire and an overview of Latin America. Essentially this book explains why we, the United States and other English speaking countries, have wealth and so many other countries do not. Not content to rest there, Bernstein discusses if this wealth makes us happy and its relationship to democracy. While this is much to absorb, the writing style flows smoothly and the historical sweep is dazzling.

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  • Anonymous

    Posted March 31, 2004

    Bad Wine In New Bottle

    I rushed to the local bookstore to pick up a copy of Birth Of Plenty, heralded by publicity of its entirely new premise and potential to create an altogether new category of books. Needless to say after my rating of two stars that I am disappointed by how old and repetitive most of the arguments in the book were. The four reasons for economic progress did not coincide on that date but were put in place slowly over a millenium as human progress could not be held back any longer. Columbus and Vasco De Gama set sail in the sixteenth century not the nineteenth century, and thats the problem with the book's so-called new reasoning. The Tulipomania was over by 1636, about the most sophisticated evidence of property rights one can find to date. First, it is obvious that no economic historian of note has been shown the book, certainly none with independence. For any good economist could tell you that Economic History 101 has always talked about the turning point of 1820-which is not a new premise at all. Angus Madison remains one of the most celebrated economic historians for precisely this finding. So does Charles Kindleberger. They do a better job revealing the acceleration of human progress into the nineteenth century rather than the epochal moment put forth by William Bernstein. Second, and most disappointing were the four reasons why economic progress took off. None were really created around 1820 and the four did not come together for the first time in 1820 either. Certainly all four existed in sufficient amount for the maritime discovery of the world. Is there anything more epochal than those moments? Indeed, property rights were in existence long before the nineteenth century. And most of the reforms in property rights (including bankruptcy reforms and security asset innovation) LAGGED economic progress rather than caused it. A second reason cited is scientific progress. Here is a classic chicken and egg reasoning in a book that purports to resolve that dilemma. A third reason was securities market innovation but the book ignores the fact that virtually all securities innovation came decades after it should have been due. And certainly the stock markets and IPO were innovated in 1602 not 1820. Then the book relies on the transportation revolution. It has to of course because 1820 marks the advent of the Century of Railroads. Here again is a chicken and egg problem. It also does not acknowledge how James Watts' watching his mom's kettle ties into any macro issue it cites. All in all, the book is interesting to someone who has not studied Law 101, Economic History 101, the stories of colonization or the thousands of books on the ascent of Western Civilization. For those who have, this has to be the most repetitive and pretentious book in recent memory.

    0 out of 1 people found this review helpful.

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  • Anonymous

    Posted January 9, 2011

    No text was provided for this review.

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