Bushfire at Devils Peak, Cape Town, South Africa: Photo 9087876 © Ludwig Kriegl | Dreamstime.com
A giant bushfire burning out of control near Cape Town, South Africa in 2009.

Unit 1 Prosperity, inequality, and planetary limits

How capitalism revolutionized the way we live, and how economics attempts to understand this and other economic systems

1.1 Ibn Battuta’s fourteenth-century travels in a flat world

In the fourteenth century, the Moroccan scholar Ibn Battuta visited the Indian subcontinent. He described the region of Bengal as ‘A country of great extent, and one in which rice is extremely abundant. Indeed, I have seen no region of the earth in which provisions are so plentiful.’

Ibn Battuta
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Ibn Battuta (1304–1368) travelled across north and west Africa, Europe, the Middle East, south and central Asia and China journeying a total of 117,000 km, almost five times the distance covered by the more famous (also fourteenth-century) traveller Marco Polo.

And he had seen much of the world, having travelled to China, west Africa, the Middle East, and Europe. Three centuries later, the same sentiment was expressed by the seventeenth-century French diamond merchant, Jean Baptiste Tavernier, who wrote of the country:

Even in the smallest villages, rice, flour, butter, milk, beans and other vegetables, sugar and sweetmeats, dry and liquid, can be procured in abundance.1

At the time of Ibn Battuta’s visit to Bengal, Europe was reeling under the impact of the bubonic plague, which took the lives of a quarter or more of the population in many cities. India was not richer than the other parts of the world. But India was not much poorer, either.

Looking at standards of living around the world, an observer at the time would have noticed that on average people were better off in Italy than in Britain, India, and Japan. But the vast differences between the rich and the poor in any given country were much more striking than these differences across regions. Rich and poor would often have different titles: in some places they would be feudal lords and serfs, in others royalty and their subjects, enslaved people and their owners, or merchants and the sailors who transported their goods. Then—as now—your prospects depended on where your parents were on the economic ladder and whether you were male or female. The difference in the fourteenth century, compared with today, was that back then the part of the world in which you were born mattered much less. Economically speaking the world was flat in Ibn Battuta’s day.

Fast forward to today. In many respects, the people of India are better off than they were seven centuries ago—for example in their access to better diets, sanitation, and control of infectious diseases as reflected in greater life expectancy (the number of years a newborn child may expect to live)—but by world standards today, most are poor.

In Ibn Batutta’s day, people learned about conditions around the world from the impressions of a few explorers. The data in Figure 1.1, which you will see in the next section, as well as the other figures in this unit, draw on the studies of hundreds of statisticians, historians, computer scientists, and economists. Economics is a fact-based field of study, which uses data to help us understand how the modern world works (and how to make it work better for all).

In our video, the economists Thomas Piketty and James Heckman explain how collecting data has been fundamental to their work on inequality and the policies to reduce it.

  1. Jean Baptiste Tavernier. 1676. Travels in India