This seems so obvious and rude, frankly, but I don’t understand how I am able to sit in my apartment with my own food to make and job to go to when some men, women, and children are living in extreme poverty with no clean drinking water. How did this start and how did it continue to cycle to where we are now?
In: Economics
Your question is the fundamental question in a whole subfield of economics known, appropriately, as Development Economics. This alone should tell you that it doesn’t have a simple answer, and very smart people can have lots of disagreements about how to answer it.
Other answers in this thread have given a lot of the historical perspective, which is important, but one thing we know for certain now is that even if economic development happened slowly initially, it now has the potential to happen very very fast. The explosive economic growth of South Korea (in the *post* Colonial era) is a great example. This is good because it doesn’t mean that poor countries are just victims of a bad history and are forever doomed to lag hundreds of years behind rich countries. However, we’re still not sure entirely why some countries have developed so quickly while others have stagnated, and outside efforts to spark development have a tendency to fail or even backfire.
The theory that I am partial to is that *institutions* matter a lot. People won’t make the necessary investments (in buildings and machinery, but especially in themselves) for a developed economy if they have no guarantee that the government will help them protect those resources. If there’s a significant threat that others can strong-arm you out of the fruits of your labor because they have more economic/political/military power, it doesn’t pay to build anything. I like this explanation because it simultaneously explains why some societies have a much easier time of industrializing and why it can be so hard (especially for outsiders) to induce development in certain environments.
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