The central task for the global economy since Adam Smith’s times has been to provide for an exploding population. Life expectancy has doubled; the global headcount has risen more than ten-fold; yet economic output has increased far faster – growing by 16,700%.
At the time of Smith’s death in 1790, there were one billion people on earth. There are now eight billion, an increase mainly driven by improvements in healthcare and sanitation. Bacterial diseases that were major killers, including cholera and tuberculosis, have been almost eradicated, and there are many fewer deaths during childbirth. By 2100, the world’s population could reach 11 billion, with much of the growth in Africa and South Asia. The populations of East Asia, Europe and Latin America are likely to level off and then shrink.
Life expectancy has more than doubled from around 35 in Smith’s day to 72 today. But a larger population living longer is a burden on essential resources such as energy, water and food. Today, over 700 million people live in poverty. For them, life expectancy remains much lower than elsewhere: someone born in the UK today is expected to reach the age of 82; in Burundi, the figure is just 63.
In 1700, total GDP was around $2 trillion. By 2022, this had grown to $100 trillion. Launching this explosion in economic activity were the agricultural and industrial revolutions. Man and beast were replaced by new technology, as threshing machines and seed drills drove up crop yields, and steam engines and spinning jennies fuelled a boom in industrial output. But slavery also played a big role in driving growth. Slavery was only abolished in the UK in 1833, and in the United States in 1865, 75 years after Smith’s death.
The factories that Smith knew often used clean forms of energy: water wheels that drove milling machinery left little in the way of pollution. But growth since has relied on energy from fossil fuels. As the frontrunners of the industrial revolution, Europe and the United States have been the world’s greatest polluters. Today, China, India and other emerging economies are catching up. In 2022 alone, China emitted an estimated 12 gigatonnes of carbon, over 25% of the global total.
Smith wrote extensively about industry, and he would have been fascinated by the exponential rise in computing speed over recent decades. Over the past 60 years, computers have gone from machines the size of warehouses to the advanced portable systems we carry in our smartphones. The speed of this increase, known as Moore’s Law, shows little sign of abating. Today, you can store a pdf of The Wealth of Nations on your phone and use YouTube to stream a video on the invisible hand, all before joining an online economics lecture remotely from almost anywhere on earth.
In the mid-1800s, the average person in the UK worked for 60-70 hours a week. The weekend was Saturday lunchtime only. A big change came in 1847, when Parliament capped hours and regulated working conditions. Today, the average working week is 36 hours, and many firms are trialling four-day weeks.
The workforce has also grown as a share of the population: in 1800, around 20% of the workforce were women; that figure now is 47%. The UK’s political franchise has expanded too. In 1770, just 3% of the population could vote, and they were only men. Today, every citizen over 18 can cast their ballot.