In the previous video, we saw that throughout most of our history,
technological progress was not strong enough to support the ever increasing population that
was about to change with the advent of something we now call the Industrial Revolution.
The Industrial Revolution is what helped the world economies keep the Malthusian trap.
But what was the industrial revolution?
In this revolution was a dramatic acceleration in technological progress which started in Britain in the 18th century.
This wave of new technologies and production methods enabled a transformation of the economy at a speed unseen before this transformation,
reduce the size of the agricultural and crop sectors and boosted the role of industry and commerce in the economy.
How did it happen? As we discussed, the key feature of new technologies is that they improve labour productivity.
That is, they improve our capacity to produce. As a result, we can raise our production per unit of time.
The next revolution, however, did a bit more than that. It raised the speed of technological progress.
So that the rise in and selectivity was much faster than the rise of population.
Now, this is a key change in a key feature of the industrial revolution.
If you were suddenly able to produce much more than before in a unit of time, your income will rise rapidly.
However, your demand for children will not rise as fast as before.
If you increase the number of kids you have from two to three,
while your income rises three or four fold over your lifetime, the average income will rise faster than population growth.
But. You know, this is already a transformative feature of the industrial revolution.
Once the income starts rising faster than population, the average guy no longer lives as poorly as their predecessors.
Their income starts rising and the next generation expects to live better than the previous one.
So to summarise, the capitalist system provides the incentives for novel technologies to be marketed at a speed which was not seen before.
Once the speed of technological progress accelerated, labour productivity increased faster than ever.
The dramatic rise in labour productivity, however, meant that an average person's income was rising faster than the desire to reproduce.
As a result, GDP per capita kept increasing. The takeoff became irreversible.
OK, but why did this take off begin in Britain at the time?
