Lecture on Economic History

I listened to my economic history lecture while riding my bike. I learned that most nations in the 1500-1700s believed in mercantilism, basically the theory that wealth in the world was fixed and the only way to make a nation wealthy was to export more than it imported. Adam Smith disagreed (rightly) and theorized that labor * labor efficiency was what created wealth. One interesting thought I had based on this was that labor is not just human energy… But all forms of energy. The reason we today are so much wealthier than those before us is that we harness non-animal energy like oil, gas, coal, nuclear, wind, solar, etc. For us to increase wealth further, we need to increase labor and energy efficiency while also increasing our energy sources. Shutting down nuclear is very concerning as that is our best source of non-co2 energy. Reducing coal and oil use while dictatorships (Russia and China) increase their use of it is risky as power goes to those scary states. One other interesting thing is the massive power amassed by a relatively small nation, the Netherlands, in this period by being the only country to use free trade. Free trade greatly increased Dutch wealth by exponentially increasing labor efficiency… Basically, people were motivated to work harder than just subsistence level as they could keep their earnings.

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Joel Gross

Joel Gross is the CEO of Coalition Technologies.