Knowledge is wealth

The British economist Angus Maddison is known for drafting OECD statistics on Europe’s per capita income. Impressively, data show that people’s living standards remained practically stagnant for 17 centuries, with income rising from $300 (current purchasing power) around the time Jesus was born to just $500 in 1700. The inhabitants of the old continent were subjected to a long period of poverty, particularly in view of the fact that their per capita income was actually lower, given that feudal lords and the church acquired more than half the wealth generated. Wealth first skyrocketed between 1700 and 1800 as a result of the industrial revolution that began in Britain with the invention of the steam engine and mechanical innovations in textile manufacturing after 1700, before spreading to other European countries. In 1820, according to Maddison’s statistics, per capita income soared to $1,000 before rising to $2,000 in 1913 with the second industrial revolution, whose origins lay in the development of railroad and telegraph networks as well as chemicals. The end of WWI saw rapid technological progress while more recently the third industrial revolution led by innovations in computers, telecommunications and biotechnology has changed the face of Europe, sending per capita income to $7,000 in 2001. The wealth produced in Europe during the years of the 20th century was seven times that produced over the previous 19 centuries. Maddison’s conclusion is that wealth is produced by knowledge and its use in the private economy. In Greece there has been a lot of talk about the knowledge economy. However, the national economy has yet to escape the bottom of EU tables on R&D spending (a meager 0.6 percent of GDP) while the education system remains firmly cut off from the needs of the market.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.