August 9th, 2009

time is money!

A million years of logic

Imagine compressing the last million years of human history into just one year. Three thousand years would pass each day or two years each minute. On this compressed time-scale, our ancestors first used fire sometime in the spring. Despite this early breakthrough, new ideas were slow to arrive on the scene. Until late October our ancestors were still wielding the most basic stone tools; humans biologically like ourselves, homo sapiens, appeared about mid-November. About December 19, the beginnings of civilization were visible: cave paintings and burial sites. It wasn't until December 27 that there was much evidence of sewing needles, spear throwers, or the bow and arrow. We don't know much about our economic prehistory, but we do know that it was a story with all the action packed into the final scene.

But economic growth didn't actually gear once we entered recorded history. Zoom in on those last few days and you'll see that the rate of innovation and growth continued to speed up. The world economy was ten times larger at the end of December 30 than twenty-four hours earlier, a time span bridged by the epic rule of the Egyptian pharaohs.Imperial China lasted for almost all of 31 December, during which time the Roman Empire rose and fell, and Europe then moved through the Midle Ages. Meanwhile, the size of the world economy increased in size another ten times between the start of New Year's Eve and 7:30 pm, the time Columbus discovered the Americas. Growth then bacame faster still, and the world economy grew tenfold again between 7:30 and 11:20 pm, when the First World War began.

That growth was astonishing by historical standards, but puny by the standards of the twentieth century, because in the last fourty minutes - the rest of the twentieth century - the world economy expanded yet again. If current growth rates are sustained, the next tenfold increase will be completed by about twenty-five past midnight.

(c) Tim Harford. The Logic of Life.