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The road to riches

Extended timeline

50,000 BC - 1000 BC: The beginnings

800 BC - 500 AD: Coins and Conquest

650 AD - 1200 AD: The East Ascendant

1000 AD - 1500 AD: Europe Stirs Again

1500 AD - 1800 AD: Europe Powers Ahead

1850 AD - 1914 AD: The rise and rise of the Great Powers

1914 AD - 1945 AD: War and Ruin

Post 1945 AD

50,000/ 40,000 BC Emergence of "modern humans".

10,000 - 6000 BC Semi-settlement and experimental domestication of plants and animals in the Near East.

7,000 - 5,000 BC Emergence of complex villages or small towns such as Catal Huyuk in Turkey. The precious volcanic glass obsidian was found in pits under the houses: was it hoarded? Used as a bank to be dipped into? Archaeologists aren't sure, but they can trace the obsidian to the volcano at Hasan Dag, where obsidian was being processed in workshops for export all over the region. Farming begins to spread to Europe and Asia.

4,000 - 2,500 BC Settlement of the flood plains between the Tigris and Euphrates. The fertile soil produces more food than had ever been seen before. Once humans learn to control the floodwaters they produce enough food to support huge communities. Uruk, the world's first big city emerges. By the middle of the 4th millennium BC it is home to between 20 and 50,000 people.

3,200 BC Emergence of the first economic documents in Mesopotamia: texts in clay tablets. They appear to be methods of keeping track of hundreds of tonnes of food- taxes or receipts. It was to be another 500 years before people used writing to express more complex thoughts.

2,500 - 1,600 BC The high point of Sumerian culture. Spectacular wealth is accumulated by society's elite, who buildhuge public monuments and are able to send out traders to all corners of the region to bring back precious materials.

1,600 - 700 BC Complex civilisations (with rulers and priests in control of a taxed peasant society) emerge, interconnected by trade, from Babylon to India to China.

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800 BC - 500 AD: Coins and Conquest

650 BC First coins are invented in Lydia, a small kingdom in modern day Turkey. They are made from a naturally occurring alloy of silver and gold called electrum. Coins also appear in China within a hundred years of this date.

800 - 500 BC City states develop in Greece and on the coast of modern day Turkey. For the first time since Sumer, a vibrant urban society emerges, often self-governed by the whole citizen body or a selection of citizens. The city states are independent and often rivals, but nevertheless linked by trade and a common culture and language.

550 - 500 BC Greek cities start to mint coins on a grand scale: coins are identified with nationhood for the first time. About the same time, coins are invented in China, being used by city-based civilisations. Unlike the weighed bits of silver which had been in use prior to the invention of coinage, coins in the Greek world find their way into everyone's pockets and are not just the tool of the wealthy trader. In 4th century Athens, even the most lowly citizen is paid 3 obols (low denomination coins) by the state to participate in juries and other civic duties.

546 BC First Athenian owl minted: this coin becomes famous and extremely long-lived. It is been welcomed across the Greek world as a reliable form of money, much like the US dollar is in many parts of the modern world.

490 BC Athenians discover big new silver ore seam at the mines near Lavrion.

336 - 323 BC Alexander the Great conquers Persia and Asia Minor. Coinage spreads even further a field as a result.

200 BC - 200 AD Rise and rise of the Mediterranean's biggest economic power to date. Rome's riches come from the sword first. Booty and slaves from conquest are followed with stiff taxation on the subject provinces. The Roman Empire forms the biggest single economic area of its day, linked by a common currency and common legal systems to protect traders and producers. At its heart is coinage, gold, silver and bronze. The key to spreading the coinage over the whole empire is taxation. Taxes are paid in Roman silver, which ensuring Roman coins circulate widely.

54 AD The Emperor Nero debases the coinage slightly by mixing other metals into the silver to make it go further. As the costs of defence go up against enemies first at home and then outside the empire's frontiers the coinage is further debased.

270 AD By this time the most common silver coin is only about 4% silver. Surviving papyrus documents suggest that inflation starts to get a strong hold on prices from this date.

295 AD The Emperor Diocletian reforms the coinage: restoring the gold and silver content of both sets of coins. But inflation seems to get worse.

301 AD Diocletian issues the Price Edict, setting maximum prices for a range of goods and services. It is inscribed in market places across the empire, (an example can still be seen at Aphrodisias in modern day Turkey). Exceeding the published prices is punishable by death but historians believe that prices kept rising anyway.

476 AD Fall of the Roman Empire. In parts of northern Europe, including Britain, there is a massive contraction of trade. In Britain, even coins stop circulating for 200 years or so. The brilliance of the classical world is preserved elsewhere: in the Islamic world, east of the Mediterranean.

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650 - 1200s: The East Ascendant

570 AD Birth of the prophet Mohammed, who favoured both trade and learning.

The Islamic world and China dominate much of the globe economically. Trade and learning flourishes. Every market has a money-changer. Business is carried out through an elaborate system of banks, cheques, letters of credit, which is so developed that it was possible to draw a cheque in Baghdad and cash it in Morocco. The Islamic expansion of trade is assisted by improvements in navigation and extensive use of Arabic numerals which are more efficient than the cumbersome Roman numerals.

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1000 - 1500 AD: Europe Stirs Again

Agricultural breakthroughs help feed a larger population. In parts of England, the low countries and northern France, the fertility of the soil is unlocked through a number of new techniques, including the adoption of heavy wheeled plough, capable of turning the heavy soils of northern Europe much more efficiently than the lighter scratch plough had done.

600 - 800 Population in Europe halves. In England it declines by 80 per cent.

755 Silver pennies become the standard currency of northern Europe.

800 - 1300 Towns in Europe begin to grow and flourish. There is a growth of banking facilities in towns and risk taking businesses, many of them using the financing techniques that were already common in the Muslim world.

1200 - 1340 approx Italy: with the emergence of competing city states a new breed of entrepreneur arrives: the first capitalists. Banks: Peruzzi and Bardi grow big, until the crash of the 1340s, triggered by overlending to King Edward III. All businesses are helped by accounting techniques such as double entry bookkeeping.

1348 - 50 The Black Death affects the whole of Europe. The population of Britain falls by 50% by 1425, as a result of this and subsequent plagues. The plagues seem to provide an economic stimulus: wages rise in rural areas and the restrictions of the feudal system are broken.

1420s Age of Discoveries: Western Europe breaks loose: Portugal begins the process, with improved ships and navigational techniques, and opens up the routes round Africa to the East, later to South America.

1492 Columbus' first voyage to the "West Indies" on behalf of the Spanish monarchy-results in 30 years of looting of Aztec and Inca gold and silver, which flows into Spain. The looting is followed by minting of silver in Mexico and Peru.

1500 Decline of Islamic grip on spice trade, focus of energy moves to Atlantic seaboard.

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1500 - 1800: Europe Powers Ahead

Spain and Portugal both reap the benefits of New World plunder. The economic initiative later shifts to the Protestant north, initially to the New Dutch Republic. Amsterdam becomes a major port and the Dutch lead Europe into economic activity which looks recognisably modern:

1453 - 1600 Ottomans take Constantinople

1435 Portuguese develop the three-masted square rigger, armed with cannon. Columbus used it and it led to four centuries of European maritime mastery.

1393 Henry the Navigator born (d 1460).

1484 John II of Portugal commissioned his astronomers to calculate how to fix latitude south of the equator (ie without the North Pole).

1488 Bartholomew Dias round the Cape of Good Hope

1492 Defeat of the Moors and expulsion of Jews from Spain. King Ferdinand and Queen Isabella celebrate by backing Columbus

1494 Pacioli's 'Summa de Mathematica' a guide to double-entry book-keeping.

1494 Pope divides the globe between Spain and Portugal. Brazil and most of the East Indies went to Portugal and the rest of North and South America and the Pacific went to Spain.

1498 Vasco de Gama reaches Calicut in India on 21 May

1519-1521 Hernan Cortes conquers Aztec empire in Mexico

1530s Francisco Pissaro conquers the Incas in Peru

1530 Amsterdam: First stock exchange, with 339 listed commodities by 1585

1598 Amsterdam founds its Chamber of Insurance.

1602 Formation of Dutch East India Company or V O C . By 1670 the company is paying dividends of 40%, employs 50,000 people, 30,000 troops and 200 ships.

1624 Dutch West Indies Company is founded. But the Dutch soon discover they have an economic rival, England, who begins a process of economic change that is to end eventually with industrialisation.

1607 Virginia, USA. First English North American colony - followed by others, which, over the next century, provide a source of raw materials, and a market for British manufacturers. Sugar becomes widely available as a result of slave plantations in the West Indies. Slave produced cotton becomes a reliable, increasingly cheap supply of raw material to English cotton mills.

1620 Bank of England established

1650s England enjoys a run of good harvests: allowing the urban population to grow and for a surplus to be exported. Gradually domestic consumers provide an incentive over the next 150 years for inventions and a shift from artisan-scale production to industrial-scale production.

1724 Daniel Defoe's 'A Tour through the whole island of Great Britain'

1733 John Kay invents the flying shuttle

1764 James Hargreaves invents the spinning jenny

1773 The cast iron bridge at Coalbrookdale is built

1774 Samuel Crompton invents the spinning mule

1776 Adam Smith's 'Inquiry into the Nature and CAuses of the Wealth of Nations' published.

1769 Thomas Arkwright invents the water powered spinning machine.

1769 First mass production of ceramics at the Etruria factory owned by Josiah Wedgwood.

1776 American Revolution takes place

1784 James Watt's rotary steam engine which no longer needs a constant water supply assists the move away from rural areas.

1793 Eli Whitney invents the cotton gin

1798 Malthus' 'Essay on Population' is published

1814 Stephenson's first steam locomotive.

1825 First railway: Darlington to Stockton

1830 First passenger railway line between Liverpool and Manchester opens

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1850 - 1914: The rise of the Great Powers

1827 First railroad built in the US

1850 - 1914 Billions are invested by Britain in the US launching it on a path of rapid industrialisation.

1865 - 1890Period of massive railroad construction in the US. Barings Bank finances much of the expansion through the sale of bonds in London, providing an investment outlet from the profits of industrialisation.

1871 After German Unification Otto von Bismarck, Germany's leader, launches the country on a course of industrialisation, acquiring an overseas empire and creating a complex system of international alliances. Germany issues a new currency based on gold, other countries follow. By the end of the century almost every major country in the world changes to a gold standard.

1875 Andrew Carnegie opens his first steel plant, the Edgar Thomas Steel Works in Braddock, Pennsylvania.

1892 - 1954 12 million immigrants pass through Ellis Island to become citizens of the United States.

1896 German steel production exceeds Britain's for the first time.

1900 - 1912 Britain and Germany engage in expensive rivalry to build the largest and most lethal navy.

1901 Andrew Carnegie sells his steel empire to J. P Morgan for $480m. He retires as the richest man in the world. His funds are used for philanthropic causes - right into the 21st century.

1905 Britain builds the first Dreadnought, a revolutionary warship which is more heavily gunned and armoured than any of its predecessors. Germany responds by building the Ostfriesland, and the world's first arms race becomes increasingly expensive.

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1914 - 45: War and Ruin

1914 - 1918 First World War Leaves many countries severely indebted and the German economy in ruins.

1917 Russian Revolution: the first major departure from capitalism. Initially no great economic progress is registered as large private farms are handed over to the peasantry. Essentially this is a mixed form of capitalism; private ownership in business or farming co-exists with state enterprise.

1921 Germany ordered to pay war reparations of 132 billion gold marks

1922 - 23 Worst period of German hyperinflation, when wages were being paid twice a day to give people a chance to spend them before they lost value.

1920 - 21 British economy enters recession.

1925 Churchill puts sterling back onto the Gold Standard

1926 General Strike.

1927 Russia. Joseph Stalin begins to implement a managed, or 'command' economy governed by Five Year Plans. Resources are allocated and targets set entirely by the government rather than the market.

1928 Hitler writes a second book after "Mein Kampf", not published until decades later (under the title 'Hitler's Secret Book'). In it he expounds his ideas of economic success through territorial acquisition.

1929 The Wall Street Crash followed by a slump in the US economy.

1929-30 The Great Depression in the US. Widespread bank failures cause a huge contraction in lending, which in turn leads to mass bankruptcies.

1932 The end of the first Five Year Plan in the Soviet Union. It had risen in industrial output from fifth to second place in the world. Its share of total global industrial output had risen from 1.5% in 1921 to 10% in 1939. For the next 40 years the Soviet system is perceived around the world to be delivering high growth and rapid industrialisation. There is a shift away from agriculture as the mainstay of the economy and a growth in military spending.

1933 Hitler becomes German Chancellor, his party is buoyed by the disaffection from Germany's recent history: military humiliation; hyperinflation; and mass unemployment.

1936 Hitler launches large scale rearmament programme, designed to bring the country to state of war readiness by 1940.

1939 - 1945 Second World War. War dead estimated at 35 million, plus 10 million in Nazi concentration camps.

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Post 1945

1944 Bretton Woods currency system (named after the New Hampshire village where it was devised) is set up. Major currencies are fixed in value against the dollar, which in turn is fixed against gold at $35 per ounce. The World Bank and the International Monetary Fund (IMF) are also established.

1945 In Britain, the Labour party under Clement Attlee wins a landslide victory, and begins to build the welfare state - see 1948 below.

1947 General George Marshall appointed US Secretary of State, begins Marshall Plan for European economic recovery after the devastation of war. Congress approves the plan the following year, which involves $17 billion in aid.

1948 The modern welfare state is born in Britain, with the creation of the National Health Service and a comprehensive system of social security, including unemployment benefits and pensions.

Berlin Airlift. Russia begins blockade of road and rail transport between Berlin and the West, and so the airlift begins.

1949 Chinese Revolution. A Peoples' Republic is declared in China, as Communists led by Mao Tse-tung defeat Chiang Kai-shek's Nationalists, who retreat to Formosa (Taiwan). The following year land is redistributed from landlords to peasants.

Britain devalues sterling from $4.03 to $2.80, and many European countries follow suit.

1953 China starts its first Soviet-style Five Year Plan, emphasising the creation of heavy industry.

1957 Signing of the Treaty of Rome, creating the European Common Market, with the aim was of preserving peace by encouraging economic integration. The six founder members were Belgium, France, Germany, Italy, Luxembourg and the Netherlands.

1958 China's 'Great Leap Forward'. Farming co-operatives become People's Communes. In rural areas this involves communal living and an unsuccessful attempt at rural steel smelting.

1960 OPEC - the Organisation of Petroleum Exporting Countries - is established.

1964 Tanzania formed, through a union of Zanzibar (which had just expelled its sultan) and Tanganyika. Tanzania remains one of the poorest countries in the world.

1966 The Cultural Revolution takes place in China. The Red Guard movement travels around China looking to denounce those whom they deem to be failing the revolution.

1967 PM Harold Wilson devalues pound from $2.80 to $2.40.

1970 Conservatives win power, and chancellor Anthony Barber presides over an economic boom which leads to soaring inflation - the 'Barber boom'.

1972 Edward Heath decides to float the pound. This precipitates the collapse of the Bretton Woods system, set up in 1944, under which the value of major currencies had been fixed against each other. Britain, Ireland and Denmark agree to join the EEC (Common Market), and do so the following year.

1973 - 4 The first oil shock. Following the Yom Kippur war between Egypt and Israel, middle eastern oil producers impose huge price increases. In early 1973 crude oil costs $2.59 per barrel, by early 1974 it is $11.65. This exacerbates world-wide inflation, and economic growth grinds virtually to a halt in many industrialised countries.

Meanwhile in Britain industrial unrest and the second miners' strike in two years leads to the imposition of a three-day working week. The Conservative government goes to the country saying "back us or sack us" - and loses the election.

1973 - 4 The Soviet Union becomes one of the world's major oil exporters, and the influx of hard currency postpones the growing crisis at the heart of its economy: falling living standards and the gross inefficiency of state enterprises.

1976 With sterling plummeting in value, the British Prime Minister James Callaghan secures emergency financial aid from the IMF (International Monetary Fund). In his speech to the Labour Party Conference, Callaghan signalled the end of old-style Keynesian approach to economic policy, and a shift towards monetarism.

1978 - 9 In Britain, a wave of strikes across industry and essential services is dubbed the 'Winter of Discontent'. Margaret Thatcher leads the Conservative Party to a decisive general election victory. Her policies mark a radical departure in British politics and include: monetarism (attempting to control inflation by constraining the money supply through higher interest rates); reform of union laws to make striking and picketing harder; and privatisation of state owned industries such as British Telecom, British Steel and British Airways.

China. Deng Xiaoping becomes leader, and begins the gradualist "reform and opening" policy, which allows progressively more economic freedom, while maintaining the old political order. His pragmatic approach is summed up in his catchphrase: "It doesn't matter if the cat is black or white as long as it catches mice". Deng encouraged enterprise in new special economic zones - but privatisation is delayed until the new private enterprises can provide alternative employment. This gradual approach turns out to be much more successful than the USSR's high speed transformation (see 1991 below). From 1978 - 95 the economy grows at an average annual rate of 9.3%.

1980 Poland. Striking shipyard workers in Gdansk form a new independent trade union called Solidarity, led by Lech Walesa, whose demands were both economic and political (freedom of speech). The strike eventually includes 500,000 workers across Poland.

1984Pit Strike. In Britain miners embark on a bitter, year-long strike over planned pit closures, involving violent confrontations between strikers, their supporters and police. Continues until March the following year, when pit closures continue.

1985 Gorbachev becomes leader of the USSR, and embarks on policies of glasnost (openness) which allows greater freedom for the press, and perestroika (restructuring), his gradualist approach to economic and political reform. But in 1986, oil prices collapse, hitting the Soviet economy hard.

1988 In Poland, Solidarity supporters strike, and this leads to direct talks with the Polish government. A new prime minister lifts restrictions on private enterprise and foreign ownership of Polish companies.

1989 Tiananmen Square Massacre. In China, after seven weeks of mass demonstrations by prodemocracy students the government declares martial law and sends in tanks to break up the protests. Thousands are killed, souring China's relations with the West for years to come. In Germany, the Berlin Wall is demolished by demonstrators, the East German Communist government resigns and is replaced by reformists. In Romania, Ceaucescu is overthrown, and democracy comes to Hungary, Poland and Czechoslovakia.

1991 Boris Yeltsin becomes leader of Russia. The Soviet Union breaks up, and he introduces radical economic reforms aimed at moving quickly to a market economy. State price controls are lifted, prompting big price increases, and wholesale privatisation is introduced. But the sale of state assets is undermined by endemic corruption, and leads to 'gangster capitalism' where tycoons and the Mafia are closely intertwined.

1993 Start of the Single European Market - enshrining the free movement of people, goods and capital.

1996 In Russia more than 18,000 industrial enterprises have been privatised in five years, and 70% of GDP is generated in the private sector. Meanwhile, life expectancy among Russian men falls, and many suffer unpaid wages and pensions.

1997 In Britain, Labour wins a landslide election victory. Chancellor Gordon Brown gives the Bank of England independent control over interest rates, and a target of inflation at no more than 2.5%.

1998 Asian financial crisis. A history of highly leveraged and speculative investment in the region combined with corruption and poor regulation to create an unsustainable boom, followed by spectacular bust. As the crisis unfurls, currencies in one country after another collapse: Thailand, Korea, the Philippines, Indonesia all fall victim.

1999 The Single Currency (the Euro) is adopted by Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg and the Netherlands.

A summit of industrialised nations in Cologne agrees to write-off up to 90% of debts owed by the world's poorest countries - amounting to 70 billion.

2000 The long predicted fall in the share prices among internet and other technology based companies hits the world's stock markets. The debate about the value of the internet and how it will change the "Road to Riches" continues

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Behind the scenes