By Jim Lindsay
Not depressed yet by all the bad economic news coming out this week? Check out the chart to the right on the change in the relative share of the world economy generated by emerging countries compared to developed countries.
What was the song that Bob Dylan sang? “A Change Is Gonna Come.”
We talk a lot about how globalization is remaking the world.
Is Washington prepared to adapt to a new world? Or will we just rail against it?
Source: The Economist.
Demographically it makes sense that the emerging countries will dominate. China and India together make up one third of the world's population and they are wealthy in aggregate, but poor per capita conmpared to the advanced economies. This will change,! Thanks to favourable conditions, they will catch up and outshine the West.
American public do not want to see folks from other countries to outshine them, let alone their countries are our lenders. So they would do everything to motivate their politicians to lobby for laws and policies to create obstacles to every frontiers, trade, military, political, that we interact with these countries.
Good idea, good luck!
That is why america is so keen on embargos. Embargos keep back the country impelementing it. It suffers silently, Many embargos hurt the implementing country than the one selected to be punished. In this way, america can hold back the second row of cyclists until they catch up...which they will never, for america and its allies are on the way down at a terrific speed. Instead of looking after their citizens, they wanted to show power and imperialism.
I believe we need to study and learn from the history of what brought down former great Democracies (Roman, Greek,Egyptian and Maya) to see that we currently have all the signs of the death of our nation. The main causes for these great democracy demises was moral corruption together with a depletion of the Federal treasuries due to endless, nonsensical wars of conquest.
and thinking that all other civilizations were barbaric.
We have all the historical signs of a failing empire - overextended financially and militarily, destruction of our middle class, failure to supplant the depletion of our primary energy source and a dysfunctional federal govt.
To understand the root causes of our failure look at median purchasing power which has been falling for four decades - ever since we lowered tariffs well below 10%, depleted our domestic oil production and allowed automation fueled by the computer revolution eliminate many more jobs than it created.
What we need now, if we are to have any hope of climbing out of this, is higher tariffs, shorter work weeks and a crash program to convert to natural gas and renewables. If we fail to take action our economy will collapse taking with it the world economy and set the stage for the rise of demagogues and the end of democracy.
Every country, even the poorest, has a basket of resources. If half of the resources are used for wars and homeland security because you damaged someone elses property or country and have to look over your shoulder all the time, and spend a lot of time to avoid reprisals, then the only remaining part of the basket may be too little for infrastructure, fiscal/monetary policies and taking care of the people. It is simple arithmetic that you learned in grade 3
"What was the song that Bob Dylan sang? 'A Change Is Gonna Come.'"
Actually, the momentous song about racism was written and performed by Sam Cooke. Not to be confused with Dylan's "The Times They Are A-Changin'", which portended all sorts of political changes taking shape at the time.
This is not the first time that this has been predicted and it will not be the last. Even if it comes true, it will be more of a function of greater numbers than greater development. Most of the richest countries (by absolute GDP) will still be in the developed world, and GDP per capita of the developed world will still be far greater.
Another reason this chart is deceptive is that as developing countries develop, they become developed countries and are no longer in the bottom part of the chart, and their gains instantly become part of those on the top of the chart, which could ensure that developed countries stay on top forever.
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