Economic Growth :: Economy Economics Governmental Essays

Economic growth is the most important study in economics today. The first book on economics was by Adam Smith The Wealth of Nations the full title was the Inquire Into The Nature And Sources Of The Wealth Of Nations. â€Å"Economic growth determines a countries future, and economic growth in the past determines a countries present as far as it’s material values are concerned.† (Buechner Recording) So every material value of the modern world is a result economic growth in the past, or your standard of living is the result of economic growth in the past. Economic growth in the future will determine whether or not there is rising or falling economic wealth, and coordinated with that whether or not the standard of living in the future continues to rise or fall. For example: In 1870 England was the leading industrial power of the globe, and as a consequence it also was the leading political power of the globe. According to M. Northrup Buechner the real wage rate in England is estimated to have been about 50% higher than the real wage rate in other European countries at that time. (Recording) It was about 1870 because of the rise of statist policies and ideologies that rate of growth in England started to lag behind that of the other European Countries. It didn’t lag a lot Buechner states the statistical estimate was less than one percent a year, however for a period of 10 or 20 years that’ll make a difference hardly anybody would notice. Yes maybe so, but if you compound that interest rate over 100 years what you get is what you see today. England is essentially a third rate economic power, and the real wage rate in England today is estimated to be â€Å"about 33% less than the real wage rate in other European countries.à ¢â‚¬  (Buechner Recording) In 1870 the United States in 1870 was an economically backward, internationally insignificant, and unimportant country in the world with respect to matters regarding foreign affairs. According to Buechner it was about 1870 when the United States embarked on a growth rate of over 5% percent a year, which was sustained for a period of over 40 years. (Recording) No country in the history of the world matched that record. At the end of that period about the time of World War I the United States took Britain’s place as the leading industrial power of the globe.