Most academic economics rely on concepts laid down at the beginning of the 20th century by the British economist Alfred Marshall. The central bias of this tool kit is that we should trust the market to solve the problems we set it. A technological leap that raises the wages of the skilled and educated will induce others to become skilled and educated, restoring balance so that inequality does not grow too much. Marshall's economics has had a marvelous run, and has helped economists make sense of the world. Yet there is a sense that progress and understanding will require something new―an economics of virtuous circles in which small changes have very large effects. Perhaps this has always been so. By the standards of centuries ago, we live in a world of unbelievable wealth. Yet three centuries ago there was also technological progress, from the mechanical clock and the water mill. But these innovations served only to increase the human population, not raise median standards of living. Today, if we divided up equally what we produce worldwide, would it give us a standard of living 10 times that of our preindustrial ancestors? Twenty times? Does the question even have meaning? David Landes likes to tell the story of Nathan Meyer Rothschild, the richest man in the world in the 19th century, dead in his 50s of an infected abscess. If you gave him the choice of the life he led as the finance-prince of Europe or a life today low-down in the income distribution but with 30 extra years , which would he choose? No doubt, we live today in an extraordinarily unequal world. There are families today near Xian, with two-acre dry wheat farms and a single goat. There are other families that could buy that wheat farm with one day's wages. Marshall's economics is of almost no help in accounting for this. Why did median standards of living stagnate for so long? And why is today's world so unequal that it is hard to find any measures of global distribution? Economists Robert Solow pointed out that the real sources of growth are not to be found in supplies and demands and the allocation of scarce resources, but in technological and organizational change. Before the Industrial Revolution, differences in median standards of living in Eurasia were relatively small. By the end of the 19th century, median living standards in Britain and other countries to which the Industrial Revolution had spread were, for the first time in recorded history, light-years above any benchmark of subsistence. The early industrial-era economic accomplishments occurred despite the loss of a substantial national income to support a profligate aristocracy. They occurred despite a tripling of the population, which put extraordinary Malthusian pressure on the economy and despite the mobilization of an unprecedented proportion of national income for an intensive war against France with three times Britain's population. How did these accomplishments occur? Economists are now awakening to the realization that the most interesting questions they face were beyond the reach of Marshall.