Professor Rae shows how countries over the last two centuries have experienced improved life expectancies and increased incomes per capita. Dynamic graphical representation of this trend reveals how improved life expectancies tend to predate increases in wealth. Malthus' "iron law of wages" and diminishing returns are explained. Questions about why the industrial revolution occurred in England at the time that it did are then posed. Professor Rae then shows the importance of the "world demographic transition" to economic history and contemporary economics. All countries tend to follow similar demographic patterns over the course of their economic development. Countries tend to have high birth and death rates in Phase I, falling death rate and high birth rate in Phase II, falling birth rate to meet the death rate in Phase III, and low birth and death rates in Phase IV. These demographic patterns are associated with different levels of capital and labor. While all countries follow this demographic transition, they do so at different times, and world trade is a way of "arbitraging" between different stages in the world demographic transition.