In developed countries, agricultural productivity has greatly impro- ved. For example, in the US, the productivity in corn and wheat have grown massively since the 1930s, while the work needed to produce it has dropped by over 90%.

This extraordinary improvement has been achieved by advances in scientific knowledge, farming equipment, and farming techniques, none of which could have developed without the investment of money and labor through successive generations.

Today, poorer countries face difficulties in achieving growth. Growth comes in many ways, but the two most important drivers are techno- logical advance and accumulating capital (in the sense of useful assets such as roads, factories, and machinery). Both of these drivers require investment, and poor countries have trouble in diverting resources from producing essentials, such as food and clothing, into projects that will create long-term growth.

TYPES OF ECONOMIC SYSTEM

In practice, most countries have a "mixed" economic system, where there is both government involvement and a degree of freedom in the markets. In their pure form, there are two extreme possibilities: the command economy and the laissez-faire economy.

The command economy is controlled by a central government that owns state enterprises, and sets production targets, prices, and incomes. In recent years, command economies have not done well ­ the economies of the former USSR and Eastern Europe have collapsed and undertaken a painful transition to a market economy with varying degrees of success.

While countries such as Poland have been recording real growth since 1992, others, such as Albania and Romania, have not enjoyed much foreign investment and remain in dire straits. China has undertaken a series of reforms that have freed its markets dramat- ically ­ some cities in China, such as Shanghai, are capitalist boom towns ­ while retaining a large degree of government involvement.