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D. Examples of nations that have become prosperous by producing more goods and services

Throughout history, countries that have moved from poverty to prosperity have learned how to produce more and more goods and services. Soon they found that they were no longer producing products and services for their own nation only, but also valuable products and services that they could export and sell to people in other countries.

History shows that every nation that is prosperous today has doubled and then redoubled its GDP many times over in past years. Although each nation chose a somewhat different path, they all increased GDP through increasing productivity.

Britain: cotton manufacturing and the Industrial Revolution

The primary example of the creation of more goods per person is Britain, the birthplace of the Industrial Revolution (about 1770-1870). British inventors gradually discovered how to make machines that would spin raw cotton into thread and other machines that would weave cotton threads into cotton fabric many times faster and more cheaply than could be done by hand workers, either in Britain or in India.[1]

In cotton, the British found a product for which there was seemingly unlimited demand throughout the world. Prior to the easy availability of cotton cloth, people often wore wool undergarments, which were hard to clean and hardly comfortable, or linen, which was expensive, or no undergarments at all, which was not hygienic. Cotton clothing of all kinds was cooler to wear in warm climates, but even in cooler climates people wanted cotton undergarments as soon as they became available.

Economic historian David S. Landes says:

The principal product of the new technology that we know as the Industrial Revolution was cheap, washable cotton, and along with it mass-produced soap made of vegetable oils. For the first time, the common man could afford underwear, once known as body linen because that was the washable fabric that the well-to-do wore next to their skin. . . . Personal hygiene changed drastically, so that commoners of the late nineteenth and early twentieth century often lived cleaner than the kings and queens of a century earlier.[2]

By producing immense amounts of cotton and then other desirable products (such as high-quality steel and machinery), England became the world’s wealthiest nation. Income per person in England doubled between 1780 and 1860, and then between 1860 and 1990 it multiplied another six times![3]

  • [1] David S. Landes, The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor (New York:W. W. Norton, 1999), 154, 190-94. Landes says cotton was “a commodity of such broad and elasticdemand that it could drive an industrial revolution” (154).
  • [2] Ibid., xviii.
  • [3] Ibid., 194.
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