Product Description: FROM THE BESTSELLING AUTHOR OF THE INTELLIGENT ASSET ALLOCATOR
A daring look at the development of human prosperity--how it was created, and where it's headed
In the breakthrough spirit of Against the Gods, William Bernstein's The Birth of Plenty has the topical uniqueness and storytelling panache to literally create its own category and reader. Based upon the premise that mankind experienced virtually zero economic growth from the dawn of time until 1820, this provocative, bigpicture book identifies the four conditions necessary for sustained economic progress--property rights, scientific rationalism, capital markets, and communications and transportation technology-- and then analyzes their gradual appearance and impact throughout every corner of the globe. Filled with bestselling author William Bernstein's trademark meticulous research and page-turning writing style, The Birth of Plenty explores:
Where the world economy could be headed next
Implications of the book's thesis for today's society
How the absence of one or more of the conditions continues to threaten beleaguered regions
Rare is the book that proposes an entirely new premise, validates that premise with inarguable research and analysis, and then explains beyond question both the relevance and the implications of its premise to the reader and the world at large. The Birth of Plenty is just such a book. From its unique, topical subject matter to its tremendous review potential, this insightful book will be one of the most talked-about volumes of the publishing season.
Essential Economic History for Any Discipline Everyone who yearns for a better time in our past should read this book (and some others) to gain an appreciation how much wealthier and better off we are then 99% of our recorded history. This books not only describes our road to wealth, but gives the fundamental reasons why we all live so much longer, healthier, and better then anytime in the past. Essential.
This book is a Must Read. This is a must read book.
The gist of his message was very positive and gave me great hope. Strong economies and economic trade bring peace. As a business person it is always gratifying to know that you might be doing the world some good. More than just providing jobs but actually helping world peace. Commerce is the start of all peace in the world.
Throughout the book, he talks about four prerequisites for economic growth:
- Secure property rights, not only for physical property, but also for intellectual property and one's own person - civil liberties, safety. This speaks poorly for trade barriers and isolationism. This speaks poorly for countries with high corruption. Milton Freidman said, "You cannot have a free society without private property".
- A systematic procedure for examining and interpreting the world - the scientific method. The book gives many cases where parts of the worlds lose ground due to the banning of technology.
- A widely available and open source of funding for the development and production of new inventions - the modern capital marketplace.
- The ability to rapidly communicate vital information and transport people and goods. SYNNEX is a distribution company so we certainly contribute to this one.
One scary statistic was the earth's population. At the birth of Christ, there were was slightly more than 250 million people by 1600 there were half a billion. In about 1800 there was a billion and by 1960 it was 3 billion and there is currently about 6 billion people. Population is a world problem.
There was an interesting section on natural resources and the wealth from those and how they actually hurt economies (as a Canadian with natural resources, this is somewhat worrisome). The example they used were countries such as Nigeria who have abundant natural resources but lack wealth and have weak economies and countries like Singapore, Holland, Switzerland, and Japan have been economic powerhouses with few natural resources.
The author also pointed out that the lower the wealth of the country, the greater the economic growth. This means over time everything equalizes.
Near the end of the book, it pointed out the problem of wealth concentration. As a CEO, I have been a beneficiary of wealth concentration but have seen how it can be very damaging. Certainly it has been very damaging for the reputation of business people. I worry this will be a challenge we need to address (and I speak against my own self interest here).
This book is a must read. Read it!
Essential reading for citizens of the modern world It has been alleged that one of the great embarrassments of the economics profession is its inability to explain why some countries get rich and some do not. Foreign Policy editor Moisés Naím, a former Venezuelan minister of industry, once compared the gap in knowledge to physicists not being able to explain how gravity works. With respect, if Naim truly thinks that it is a mystery why some countries get rich and some do not, it can only be that he has not read Bernstein's masterpiece of popular economic history.
Most of humanity has been desperately poor for most of history. Why have some countries successfully stepped onto the up-escalator of economic growth, while others have remained trapped in poverty? Bernstein presents a compelling and logical answer.
He identifies four ingredients to economic growth. They are: (1) property rights - giving entrepreneurs the incentive to create wealth knowing that it will not be confiscated; (2) Scientific rationalism -technological advance requires honest intellectual enquiry; (3) Capital markets - the large-scale production of new goods and services requires vast amounts of money from others. Even if property and the ability to innovate are secure, capital is still required to develop schemes and ideas; (4) Fast and efficient communications and transportation. Products need to be advertised and distributed to buyers hundreds or thousands of miles away. Even if entrepreneurs possess secure property rights, the proper intellectual tools, and adequate capital, their innovations will languish unless they can quickly and cheaply put their products into the hands of consumers.
There is a crucial lesson from Bernstein's analysis, essential to both policy-makers and citizens. It is this: institutions are more important than physical infrastructure. Of Bernstein's four factors, only the fourth requires significant physical investment. The other factors are abstract concepts - or "cultural infrastructure" - that economically successful societies utilize and failed states do not.
Reading this book also gives the Western reader some essential perspective on how much better our lives are today compared to life in centuries past. It is also a profoundly (and legitimately) hopeful work, since its prescription is both sensible and practical.
Many good ideas, sloppy analysis This book contains many ideas about the causes of economic growth that are approximately right, but rarely backs them up with good arguments. He starts by saying four institutions are needed to escape from a Malthusian trap: property rights (rule of law), reason (scientific methods), capital markets, and fast transportation/communication. But later when discussing why some countries were slow to develop, he adds ad hoc explanations (e.g. "excessive military expenditure" "reliably derails great nations"). The biggest shortcoming of the book is that it ignores evidence that China provides a counter-example to his main claims. He doesn't acknowledge expert claims that parts of China around 1800 had a degree of property rights and rule of law that was comparable to England at that time, nor does he discuss the recent dramatic Chinese takeoff that happened with a mediocre degree of property rights and rule of law. He gives many hints about why those four institutions are helpful, but provides little evidence that any one is essential. About the closest he comes to providing rigorous evidence is a graph indicating how much of economic growth appears to be explained by a Rule-of-Law indicator. He follows that with a similar graph of how government spending levels explain economic growth, and claims the negative effect of government spending would be invisible without the computed trend line, but the rule-of-law trend is more impressive. I see those graphs differently. The most obvious trend is that government spending over about 15 to 18% (of GDP?) reduces growth, with no obvious pattern for lower spending levels. The most obvious trend in the rule-of-law graph is that low values on the rule-of-law indicator are associated with larger variations in economic growth, which is somewhat contrary to his claim that such values reliably prevent growth. The section I found most valuable was the one describing reasons for thinking that 16th century Holland created the beginnings of the industrial revolution. There are enough misleading or false statements in the book to convince me not to trust him. For example, he refers to eclipse prediction around 1700 as a spectacular change to what was previously a mystery. He appears unaware that eclipses had been predicted more than a millennium earlier. He often digresses into anecdotes that have no apparent relevance. For example, he claims "a healthy market for government debt is, in fact, essential for funding business". After giving two implausible theoretical reasons for that claim, he says it was "vividly demonstrated in the U.S." in 1862, but then gives a description of how government bonds were sold, without mentioning anything about the effect on business. His discussion of the possible trade-offs between inflation and unemployment makes a claim that increased unemployment caused more unhappiness than "an identical rise in inflation". But inflation is measured in different units that unemployment. If we happened to measure inflation in percent per presidential election, the naive comparison would work much differently. (He is subtly misinterpreting a serious paper that is hard to fully explain to laymen). His advice to undeveloped nations includes "before a nation builds roads ... it must first train lawyers", which makes me doubt his understanding of what causes the rule of law.
Nice read Bernstein book is reasonably well researched and has cogent writing style to prove his hypothesis that there are 4 necessary and sufficient conditions for nations to achieve long lasting prosperity. Those 4 conditions are (1) support structure for property rights, i.e. customers must have proper incentive to create (2) Scientific rationalism - innovators must posses the proper intellectual tools in order to innovate (3) Capital markets for availability for funds for innovators and (4) transportation and communications infrastructure.
Bernstein, founder of efficientfrontier.com, builds a strong case in this book for the above hypothesis.
Anything Goes Trivia
Megaton Man
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