"A fascinating journey that offers a glimpse into the flow of global wealth." _[Publisher's Weekly]

“The fate of rich and poor countries
It was decided a long time ago!”

Where did today's economic growth and social prosperity come from?

William Bernstein, author of "A Global History of Wealth," turns back the clock to explore the origins of today's wealth, how it came to be, and why, to solve these conundrums that have plagued economists and historians for 450 years.
Well known to Korean readers as the author of the best-selling historical book, “The Crowd’s Delusion,” in this book, he fully demonstrates his talents as an economic historian by analyzing vast amounts of historical data within the framework of econometrics.


The author explores the history of the development of human civilization from an economic and social perspective, analyzing it through four frameworks: property rights, scientific rationalism, capital markets, and the development of transportation and communication. This includes the story of how the spark of wealth that began in the Netherlands and England in the 18th century spread to the United States today, the reason why France and Spain failed to take the lead in the world despite having many colonies, the reasons why Asian countries such as Korea, Japan, Hong Kong, and Singapore achieved rapid economic and social growth, and the reason why Latin American, African, and Middle Eastern countries still have not grown.

How long will America's economic and military hegemony last? Is the future truly rosy for the oil-rich Islamic countries, where deserts are transformed into skyscrapers by the day? Can South Korea maintain sustained growth? How can the gap between rich and poor and social inequality be resolved?

Understanding the four elements of economic growth and social prosperity presented by the author will provide powerful insights into where and how humanity and Korea should go in the future.

Why did global economic growth and the technological progress that underpinned it suddenly explode at such a specific time? Why didn't the Florentines invent the airplane and steam engine envisioned by da Vinci? Why didn't the Romans, with their metallurgical expertise, discover electricity or invent the telegraph? Why didn't the Greeks, with their mathematical expertise, explain the laws of probability essential to the functioning of modern capital markets? Relatedly, why did the Athenians, despite possessing the general conditions for economic growth—democracy, property rights, and a liberal middle class—continue to suffer extreme poverty for two centuries after defeating the Persians until their siege by Alexander the Great? Why did Hobbes, who so perfectly captured the lives of most people until the 19th century, describe the state of nature as "solitary, poor, ugly, brutish, and short," disappear from Western Europe within two centuries? My task is to uncover the cultural and historical factors that fueled the enormous economic growth of the early 19th century.
If we can solve this problem, readers will be able to glimpse into the Earth and our future.
---From "Introduction - What is the difference between a prosperous region and a poor region"

The best way to measure the impact of intellectual and scientific progress is to look at the footprints it leaves on earth.
How much has the per capita economic output of Italy, France, the Netherlands, and the United Kingdom increased over the centuries? How much has life expectancy increased? How much has education improved? Thanks to the efforts of economic historians over the past few decades, a quantitative portrait of human progress has gradually emerged.
Numbers tell an amazing story.
Until about 1820, the world's per capita economic growth rate, the best single indicator of human material progress, remained virtually zero.
In the centuries following the fall of Rome, Europe's wealth actually declined as several important technologies were lost.
Cement, the most important of these, was not rediscovered until the 13th century.
---From "Introductory Note - The Moment the Hands of Wealth Moved"

The rapid economic growth of industrial society has fascinated generations of economists.
They argued that it was clear that the key to economic development was industrialization itself.
Simply building factories and modern infrastructure and training workers should automatically lead to a proud economic leap forward.
But as the unfortunate modern history of Soviet industrialization and the massive infrastructure projects built with foreign aid in the Third World show, prosperity requires more than factories, dams, and railways.
A nation reaches the stage of industrialization not simply as a result of industrialization itself, but because it possesses the crucial institutions and practices that underpin industrialization: property rights, scientific inquiry, and capital markets.
Once a country succeeds in industrialization, it breaks the chains of poverty.
So to speak, economic growth has become the code inherent in that culture.
Industrialized nations, even when they suffer large-scale external economic devastation, as did the Axis powers in World War II, recover quickly and surpass their previous prosperity.
---From "01 Hypothesis of Wealth"

In most parts of the modern world, the protection of property rights separates the rich from the poor, the winners from the losers in the competition for national prosperity.
There is a limit to the available land.
That was why the Greek city-states and the Roman Empire became unstable.
As land became scarce and expensive, fewer and fewer people were able to own it.
This has reduced the base of landowner citizens who have a stake in the welfare of society.
For a nation to prosper, a significant number of its citizens need to have a personal interest in the nation's political processes by owning property.
This is the stakeholder effect.
In the pre-modern world, a nation whose land was depleted and its stakeholder base weakened was a nation that was not far from its end.
---From "02 Property Rights"

Economically, until a few hundred years ago, most religions functioned as monopolies and engaged in typical monopolistic practices: extracting gold, property, and status from their followers in exchange for earthly praise and afterlife salvation.
Modern economists call this "rent-seeking behavior."
In the ancient and medieval West and the Middle East, organized religions hardened into static belief systems that suppressed questioning and dissent.
However beneficial this belief system may have been to our spiritual life on earth, it has impoverished the material aspects of existence.
What fueled this explosion of innovation was a revolution in the very way Westerners observed and attempted to understand the natural world.
It is no exaggeration to say that Westerners and Western culture itself are defined by the birth of this scientific rationalism.
This revolution demanded that science, or natural philosophy as it was then known, be severed from its roots in the Church. It did not flourish until Galileo's creed was accepted: "Humanity must separate the spiritual from the secular, and the Holy Spirit's intention is to show us the way to heaven, not how the heavens work."
---From "03 Scientific Rationalism"

In industrial societies, the delay between capital expenditure and profit realization is typically long, and the amount of capital required is much larger.
In modern Western economies, a significant portion of income comes from inventions that did not exist in previous generations, and virtually all profits come from inventions that did not exist a century ago.
Bringing a product like this to market requires a huge amount of capital.
Consider the period between 1900 and 1950.
The automobile, aircraft, and appliance industries that dominated the economy in 1950 didn't even exist in 1900.
In 1900, there were inventors and entrepreneurs who dreamed of bringing these creations to the common man.
It is a humble truth that the most important part of the prosperity of Western society has always come from the minds of a tiny minority of geniuses, perhaps one in a million.
Transforming their ideas into economic reality requires massive amounts of capital that only a robust financial system with investor confidence can provide.
---From "04 Capital Market"

What triggered the revolutionary changes of the early 19th century and the steady, uninterrupted growth of wealth that followed for the next two centuries? I believe the Western economy until 1800 resembled a dam, a reservoir of ever-increasing potential.
In this reservoir lay the common law of England, beginning with the Magna Carta, expanded by the brilliance of Edward Coke and his successors, and supplemented by statutes and case law governing monopolies and patents.
There were also the dazzling intellectual advances of the Age of Scientific Enlightenment and the sequential improvements in capital markets made by the Italians, the Dutch, and the British.
While these achievements have indeed improved individual well-being, the pace has been glacial.
What was lacking was the physical power needed to run the factory and transport the goods, and the speed of communication needed to coordinate the entire process.
The invention of the steam engine and the telegraph, so to speak, blew a hole in the dam, releasing a torrent of unprecedented economic growth.
The dam can never be rebuilt, and the West's growth will not stop for the foreseeable future.
---From "05 Development of Transportation and Communication"

By far the richest British colony was America.
If the colonial hypothesis were valid, Britain should have been devastated by American independence.
In fact, the opposite happened - Britain's defeat equalized trade relations, leading to explosive economic growth in both countries.
Even at the height of the British Empire, Britain's colonies absorbed less than a quarter of Britain's output.
Exports to unprotected markets such as Europe and the United States accounted for the majority of Britain's export trade.
In a world where imperialism really matters, the countries that have largely been free from Western rule, like Bhutan, Mongolia, Ethiopia, and Russia, should be the richest on the planet, and the countries that have been colonized the longest, like Hong Kong and Singapore, should be the poorest.
Imperialism, then, is not the cause of the enormous disparity in wealth and military power, but its ultimate consequence.
It is not nature's bounty or freedom from imperialist domination, but institutions and practices that separate the winners and losers in the global economy.
Above all, the level of respect for the rules of the game – the rule of law, equality under the law, respect for civil liberties – determines the wealth of a nation.
---From "09 Backward Countries - The Islamic World and Latin America"

It is no exaggeration to say that the economy is a matter of life and death for a nation.
Understanding economic development provides deep insights into the history of important power politics and explains aspects of the modern world.
In the modern world, the relationship between wealth and power is simple.
Modern warfare is essentially an industrial war, and the most productive nation generally gains the upper hand.
The story of military productivity is as old as history.
The ancient Greek hoplite tactics and equipment gave them an insurmountable advantage over their Persian enemies.
At the start of the Hundred Years' War, the longbow, with its lethal accuracy at 200 yards and a rate of fire of up to 12 rounds per minute, decimated the elite French armies at the battles of Crécy and Agincourt.
Afterwards, technology turned the tide of fortunes, with siege catapults giving the French the margin of victory.
As in all industrial competition, productivity is the decisive factor.
The products may be different, but the essence of competition is all too similar.
The person who can create the most lethal equipment at the lowest cost wins.
---From "The Curse of the 12 Winners"

In the 250 years since Adam Smith first identified peace, light taxes, and proper administration of justice as necessary conditions for prosperity, economists have continued to refine his simple recipe.
In modern times, it has become clear that technological advancement is the ultimate source of growth.
By tracing the process of innovation through concept formation, development, production, and ultimate consumption, we can arrive at a practical model for understanding economic growth, and if we can understand growth, we can also glimpse the vague outlines of a nation's destiny.
The book's most important message is that what determines a nation's long-term prosperity and future is not its natural resources or cultural assets, nor its sense of power, nor its economic and political sacrifice, nor even its military might, but its institutions and practices.
The path to prosperity passes through four institutions and practices.
The lack of each institution or practice has, so to speak, become a gateway or barrier to human progress.
When all four institutions and practices of a nation were in place, the barriers to human genius, creativity, and ambition were broken down, leading to vibrant innovation and national prosperity.

---From "14 When, Where, and Wherever"