I would like to add this question as a Comment because I am still waiting to
get signed up as a Researcher. But I hope you can credit my response as a paid
Answer in the near future. I will reply once I'm approved as a researcher with
an "Answer" (identical to this comment) that you can give credit to.
Proposition 1 is True for the following simple economic reasons:
1) Increasing and Compounded Expansion of the Working Population
2) Technological Growth
Economically, you can reference the Cobb-Douglas production function (which you
can find in any decent Microeconomics text) which tells us that:
Production = f(L, K)
Meaning: production is a function of Labor and Capital, both of which are
enhanced by Technology.
Now to my answers:
1) Compound and Increasing Population Growth -
If technology and productivity are constant, you will always produce more as
you have more people. The world's population has increased over time because
mortality rates have declined. Even in the middle ages, people still lived to
work longer and produce more things than they did in 10,000BC. This translates
into both more absolute wealth and more per-capita wealth.
This growth rate has also increased like compound interest. Consider the Adam &
Eve scenario where two people produce two children. Their children produce two
children, whose children produce two children in turn. As mortality rates also
decline, population grows at an increasing rate. In historical reality, the
effect is much stronger. In the Middle Ages, a family might produce 10 children
of whom just 3 will live on average. Prior to the advent of birth control,
population shot up as the average family began to produce 10 children and have
6 who live.
The labor force has also expanded in other ways. Economic growth has
skyrocketed in the last two centuries due to technology and the the
incorporation of new groups into the labor force: women, blacks,
Technology enhances the productivity of Labor and Capital. Examples include
Labor: paper, writing utensils, books, printing press, typewriter, word
processor, personal computer printers. For Capital: interchangable parts, new
processes, sea shipping (cheaper inputs), railroads, just-in-time inventory,
efficient and liquid modern financial markets, etc.
Education is also a critical technology. Exploration, the discovery of Chinese
knowledge, importation of Arabic knowledge into Europe, etc. are all examples
of education and cultural interchange. Clearly today we have mass
communication, the Internet, etc. These make people more productive -- no need
to always "reinvent the wheel"
As a simple example, consider the additional economic production which has been
created by you asking this question on Google. It might cost you $20 to find an
answer to this question but perhaps it would have taken you 3 hours to find it
on your own. So you elect to pay me and you save 2 hours which you can put
towards other productive purposes (and earn $40). But never could have if it
wasn't for the Google Answers technology.
Adam Smith and the classical economists rightly saw trading as the basis of the
wealth of nations. You should be able to cite Smith and other's discusssions of
trading goods and services, utilities and preferences.
This leads to an increasing rate of economic growth as markets become more
efficient. Less time is wasted as you can travel by railroad, raise financing
for a great business idea on the capital markets, find skilled employees by
calling up an executive recruiter, etc. Ideas of these sorts of innovations can
be found for most times: the impact of the horse in the Americas, the
importance of the llama in Incan Peru, etc.
Let me know if you have any questions. My background is that I have studied
these issues of history and economics at Cornell University.