If we were to make a list of subjects ranked by the gap between the civilizational importance of the topic and the lack of serious literature devoted to it, historical acceleration of economic growth would be very near the top of the list. I wrote an article on the subject way back on January 29, 2006 (version 1.0), but now it is time for a much more substantial treatise.
To whet your appetite, read the article "Are You Acceleration Aware?", which is the critical piece of any attempt at Futurism.
In the modern age, we take for granted that the US will grow at 3.5% a year, and that the world economy grows at 4% to 4.5% a year. However, these are numbers that were unheard of in the 19th century, during which World GDP grew under 2% a year. Prior to the 19th century, annual World GDP growth was so little that changes from one generation to the next were virtually zero. Brad Delong has some data on World GDP from prehistoric times until 2000 AD.
If I put historical per-capita GDP through 2000 in a logarithmic timescale, we see the following :
The theme of acceleration readily presents itself here, and even disruptive events like the Greagt Depression still do not cause more than a temporary deviation from the long-term trendline. A different representation of the data would be to notice the shrinking intervals that it takes for per-capita World GDP to double.
10000 BC to 1500 : 11500 years without doubling
1500 to 1830 : 330 years
1830 to 1880 : 50 years
1880 to 1915 : 35 years
1915 to 1951 : 36 years (Great Depression and World Wars in this period)
1951 to 1975 : 24 years (recovery to trendline)
1975 to 2003 : 28 years
2003 to 2024-2027? : 21-24 years (on current trends)
This not only further reveals acceleration, but also indicates that massively disruptive world events still result in merely temporary deviations from the long-term trendline.
Additionally, we can take the more granular IMF data of recent World GDP growth, and plot a trendline on it. Both nominal and PPP growth rates are available, and are diverging due to the increasing size and growth rates of India and China. Unfortunately, the IMF data only goes back to 1980, and 28 years are not enough to plot an ideal trendline, but nonetheless, the upward slope is distinct, and recessions (which still do not push World GDP growth into negative territory) are invariably followed by steep recoveries.
It is also important to note that the standard deviation of the IMF data for World GDP growth rates is about 1% a year, for both the nominal and PPP series (1.07% and 1.14% respectively, to be exact). The rules of standard deviations dictate that 68% of the time, a data point will be within one standard deviation of the mean, 95% will be between two standard deviations, and 99.7% will be within three.
Thus, in a simple example, if the World GDP growth trendline is currently at 4% a year, there is a 68% chance that the next year will be between 3% and 5%, and there is only a 0.3% chance that the next year will be below 1% or above 7% growth. This means that a worldwide recession with a year of negative growth is extremely improbable, just as improbable as a year with stupendous 8% growth. There is not a single year in the 1980-2007 IMF data with negative GDP growth, and virtually none under 1% growth.
Pessimists like to say that "the Great Depression will happen again", but not only was the Great Depression at a time when the trendline was at a lower annual growth rate than today, but the Great Depression comprised of 6 years of GDP falling below the trendline, simply because it followed a period of many years where GDP was substantially above the trendline. Furthermore, this was for US GDP. World GDP's deviations may have been even less severe, as some nations, such as France, Japan, and China, were left relatively unscathed by the Great Depression.
Now, what happens if we project these trendlines through the 21st century? The dotted red line represents the median trend assuming that nominal and PPP growth rates converge at some intermediate level.
I can apply this trendline for World GDP growth, make assumptions of total world population to arrive at per capita World GDP growth, and add it back to the first graph. The assumed growth rates, by decade, in per capita income are :
2007-2020 : 3.5%
2020-2030 : 3.5-4.0%
2030-2040 : 4.0-5.0%
2040-2050 : 5.0-6.0%
This leads to estimates for per-capita GDP at PPP, in 2007 dollars, to be :
2007 : $10,000
2020 : $15,155
2030 : $22,400
2040 : $32,600 - $36,000
2050 : $53,200 - $64,500
Which, when plotted, provides the following :
Or, when a longer view is taken, in terms of logarithmic periods going back from the year 2050, we see :
Needless to say, this degree of acceleration in economic growth affects nearly every possible facet of the world in the 21st century. From a continually rising stock market to the proliferation of millionaires to the rapid upliftment of all metrics of human development, massive abundance is a certainty. The inevitable derivatives of wealth, such as the spread of democracy, the upliftment in the sophistication of human psychology, and thus a corresponding drop in warfare, will soon follow. Resolving current problems, such as reducing poverty in developing regions, to funding sophisticated healthcare technologies, to increasing literacy, to funding ambitious space exploration, are merely just a matter of time.
Inevitably, even the average citizen in the mid-21st century will have access to many material and psychological opportunities that even the wealthiest of today do not have. Turn that frown upside down, for you are in for an exciting time as you ride the tsunami of prosperity that is about to immerse you.
This article is the inaugural entry into a new category here at The Futurist titled "Core Articles". These are the articles which are designed to form the cornerstone of a comprehensive understanding of the future, and are suggested reading for anyone interested in the subject. Additional articles will be upgraded to "Core" status as augmentations to them accumulate.