
The "Great Enrichment": technology, free markets, and a rules-based international order caused a "spectacular rise in global wealth"
The “Great Enrichment,” a term coined by Deirdre McCloskey to describe per capita income growth after 1800, of the past few decades has been spectacular: The world is now much richer and far less prone to extreme poverty....So, what caused the Great Enrichment? How can it be sustained?
First, the rapid acceleration of technology...
Second: markets. China, India and many other countries abandoned the worst excesses of central planning after the late 1970s and, within a few decades, transformed. Markets work. They provide incentives to allocate resources efficiently, accumulate capital and adopt technology...
Third: an international order grounded in the rule of law, free trade and multilateral cooperation. Humans are at their best when they can interact peacefully under clear, stable rules...
Unfortunately, all three forces are under attack. Many intellectuals and much of the public increasingly distrust technology, free markets and the rules-based international order. This distrust is not baseless. The costs of technological change, international trade and immigration have fallen on specific workers and places, while the gains have been diffuse.