The one Western country that will continue to do well in the next few years as China, India and others catch up, is Germany. It has proportionately more businesses at the leading edge of engineering than, say, the UK, US or Japan. For a few years at least, Germany will still be able to produce those specialized engineering goods which will be imported by China in exchange for its consumer goods. After then, China will undoubtedly start to make its own producer goods.
But what will happen then? My own view is that, in the coming years, the energy technology that will steadily take over from fossil fuels as they decline in quantity and go up in price is the production of hydrogen from synthetic bacteria, probably hybridized from existing natural bacteria. This immensely complex research is being led by the iconoclastic Carl Venter and the Nobel Laureate, Hamilton O. Smith, The principal technology will move from engineering (metal-based or electronics-based) to biology.
What effect will that have on the present growing divide between an elite class and the majority of the population? Or the present unequal divide between countries? Of course, this question begs the other question of whether the masses will survive at all. In future years, governments might not be able to pay welfare benefits to most of their populations. Besides, of their own volition, the masses might follow the present trend of Western parents in not replacing themselves with sufficient numbers of children.
But whether it’s the masses-plus-elites or the elites alone that will survive in the further future, it is the nature of the productive process itself that has the major effect on the structure of governments and their relative military powers. Karl Marx first said this—and it’s been about the only thing he got right. However, the new H-bacterium technology will have radically different effects from now because its inputs are far more equally dispersed over the face of the earth than fossil fuels are at present. The necessary ingredients, carbon dioxide, nitrogen and solar energy are freely available from the air and water is abundant. (There will probably be two major variants—H-bacteria fed by freshwater and that fed by seawater.)
Thus a great equalization is likely to occur between the economies of different populations. Our present metropolises are likely to disperse into the countryside and along sea coasts. The sizes of production units—and the habitations of those serving them—are likely to be smaller. Due to the nature of the infinite complexity of DNA, the present trend to even more scientific specialization is likely to continue. Trading will continue but, instead of freight, will increasingly likely to be that of manufacturing licences from one community to another as teams of scientists compete to devise more efficient methods (both of energy but also, in the further future, of things.)
My own view of the future has faint echoes of Joseph Schumpeter’s thesis of creative destruction. But, so far, I had come across no other economist who was advancing similar ideas to my own eccentric ones. (Mind you, Schumpeter was eccentric enough! He sometimes gave his university lectures hot from the chase and still dressed in full hunting kit.) However, to my delight, I came across another eccentric this morning. He is a young Indian economist, Parag Khanna. He also foresees a world in which there will be a great deal of equalization—a neo-Medievalism, not dissimilar to my own idea of much smaller-scale communities.
I know little more about his ideas in detail. The elite do, however. They have already read his book, How to Run the World: Charting a Course to the Next Renaissance, and invited him to the World Economic Forum at Davos in January this year where, no doubt, he gave a talk or two. I must wait a few days until Amazon delivers the book.
(Postscript: I shall be also be interested to see how Parag Khanna’s views square with [or clash with!] those of another Indian economist, Atanu Dey, who has been much responsible for keeping this Short List alive and bringing my blogsite, Allisstatus, into being [without necessarily agreeing with everything I write!].)