From the time of the birth of Jesus until 1776 economists estimate that the world’s economy doubled in size. In 1776 a Scottish philosopher economist named Adam Smith published a book titled “The Wealth of Nations” that described the basic principles of a new philosophy called Capitalism. It was a brutal system of competitive individualism that transformed the world. These days the world’s economy doubles about every 40 years, which is why we live modern lifestyles instead of sitting around campfires at night trying to stay warm and hoping to have enough food to eat.
One of the theories of capitalism is each nation concentrates on producing the goods and services where it has a comparative advantage and trades to other nations for the goods and services the other nation has a comparative advantage in. Take coffee for instance which can’t be grown in the United State due to our climate. Every bean is imported and the medium traded for it is the dollar bill. The recipient nation takes that dollar and imports items that it needs.
In this economic competition, just like in sports, there are winners and losers and over the last 200 years the United States has generally been a winner. However, this means that certain sectors such as small farms that used to support millions of citizens now support very few, but the massive corporate farms actually produce more products. This is just an example that has been repeated over and over in the last 250 years.
The last time we refused to compete and withdrew into isolation was almost 100 years ago and we know the result of that experiment. Just like a winning sports champion that rests on its laurels instead of continuing its rigorous practices, an empire can soon fall apart.
