Why is the world today so much richer than it used to be any time in the past — whether a few years or a few centuries ago? There are many factors that contributed to the wealth of the world. However if forced to answer in one word, I’d say “trade” or “exchange.”
We trade all the time. We trade our labor for stuff. We earn income by giving up some our leisure time to produce stuff and then exchange the income for stuff we wish to consume. Meaning our production is the means we use for the end goal of consumption. All of this is just common sense and not quantum mechanics.
Trade is a superpower that only we humans possess. In his 1776 masterwork “The Wealth of Nations,” Adam Smith wrote that it was “division of labour” that created the “general opulence” we enjoy. But he stressed that this specialization and division of labor is not because humans figured it out through their wisdom but because of “a certain propensity in human nature . . . : the propensity to truck, barter, and exchange one thing for another.” Continue reading “Trade”
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