Convergence on macro scale

- [Instructor] We've talked about things that might drive inequality, things that Thomas Piketty refers to as forces of divergence, but I always think about or at least what some of what he cites is forces of convergence, so forces of convergence or things that might make the world a more equal place, and the primary one that he cites is one that's very close to my heart, and this is the spread of knowledge. Spread of knowledge. And what we have here is a couple of charts that show the spread of knowledge at least on a macro basis, on a regional basis, and show how it has been a driver of starting to equalize global output. As we start in 1700, we see that, it's going from 1700 through the Industrial Revolution, frankly as the West was developing or industrializing, the West, Europe and America, became a larger and larger percentage of global output, and Asia became a smaller and smaller percentage. But then as you go into the second half of the 20th century and into the 21st century, you see the dynamic change. Asia's percentage of world output is increasing more and more, and that's arguably happening because you've had a transfer of knowledge, a diffusion of knowledge from the West to the East from modern manufacturing techniques and design techniques and engineering techniques and whatever else, and that's why as we are in the beginning of the 21st century Asia is turning into a major industrial powerhouse. They've learned from the West and in some dimensions are even improving on some of the knowledge from the West to make themselves more and more productive. So at least on a regional basis, this shows that the world is becoming more equal because of this spread of knowledge. And we could also see it on a per capita basis, so this right over here, they're essentially plotting over time per capita GDP as a percentage of world average, so the world average right over here is obviously 100% of the world average, so that's why it's just a flat line at 100%. And we see as we go through the Industrial Revolution, Europe and America, essentially the West, the West, its per capita GDP becomes a larger and larger percentage of the average per capita GDP for the globe, but that was true until recently, until the last few decades. The last few decades as a percentage, it's gone down. Now that doesn't mean that per capita GDP is going down. It just means that its share as a percentage of world average is going down, and that's really because Asia's per capita GDP has been growing even faster because of, once again, that spread of knowledge. So at least this idea of spread of knowledge, it does seem to be playing out at a regional level. It's bringing, at least right now, it seems like Asia's participating much more than Africa, but it's starting to bring the non-West, the East, more in line with the West in terms of protective capacity and wealth per person and per capita GDP, however you want to look at it. Now an interesting question, that's at a regional level. What about an individual level? And we'll talk about that more in the next video.