Economic History: Why Wages Stalled for Millennia
From the Malthusian trap to oil shocks and debt crises, a tour of the turning points that made some nations rich and left others behind.
Try 3 questions
1. In the Malthusian model of pre-industrial economies, what happens after a new farming technology raises food output?
- Population grows until incomes fall back
- Incomes rise permanently for everyone
- Population falls as work becomes easier
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Answer: Population grows until incomes fall back
Extra food lets more children survive; the larger population then shares the same land, pushing income per person back toward subsistence.
2. After the Black Death killed perhaps a third of Europe's population in the 1300s, what happened to surviving laborers' real wages?
- They fell as the economy collapsed
- They stayed fixed by long custom
- They rose sharply as labor grew scarce
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Answer: They rose sharply as labor grew scarce
With far fewer workers for the same land, labor became scarce, and real wages in places like England roughly doubled over the following century.
3. For most of human history before about 1800, how did average income per person compare with today?
- Close to a modern middle-income level
- Similar to the poorest countries today
- Rising steadily by about 1% a year
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Answer: Similar to the poorest countries today
Income per person barely changed for millennia, hovering near subsistence; sustained growth is a recent exception that began with industrialization.
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