Douglas W. Rae, teaching Yale's Capitalism: Success, Crisis and Reform, opens with two centuries of rising life expectancy and income per capita, using graphs that show life expectancy gains often arriving before income gains. He walks through Malthus's iron law of wages and the logic of diminishing returns, then asks why the industrial revolution took off in England when it did. The lecture's core is the world demographic transition model: countries move from high birth and death rates, through falling death rates with births still high, to falling birth rates catching up with deaths, and finally to low rates on both sides, each phase tied to different levels of capital and labor. Rae notes that countries pass through these phases at different times, letting world trade function as a kind of arbitrage between demographic stages, and brings in Gregory Clark's research to test Malthus's pessimism against the actual historical record.