The window of opportunity is closing

Keith Hudson

There was nothing extraordinary about the economic growth that took off in England in 1780 and lasting lustily until 1980 when it largely petered out world-wide due to the dearth of any more uniquely new consumer goods. . .   By 1900, the three European countries that had adopted English industrial methods — France, Netherlands and Germany — with the addition of the English offshoot, America, dominated world trade.  They and they alone had also got onto the scientific revolution bandwagon which started showing through unambiguously — in Germany particularly — before the end of the 19th century.

It was this scientific awakening that allowed the original five countries involved to continue their trade dominance despite four of them being seriously delayed by two world wars (while that of America was accelerated due to its imposition of the dollar-gold standard on the rest of the world at the Bretton woods Conference in  1942).

In England’s case, the industrial revolution came upon it unawares in 1780 by reason of no particular virtue of the English people.  There was nothing special about our personal characteristics that the French, the Dutch, the Germans and the Americans did not also possess.  The industrial revolution came about because of a mixture of circumstances and the only advantage — albeit a big one — that England had, and why it took off here and nowhere else, is that we had a good scattering of banks all over the country which the other countries, because they were war- and revolution-torn all through the 18th and 19th centuries, didn’t have.

This four-country dominance of world trade would have continued unperturbed if it hadn’t been for two extraordinary cultures — traditionally both respecting scholarship above all other qualities — and reacting with great incisiveness and strength at particular junctures in their history.  These are, of course, the Confucian and the Jewish cultures.  The first was responsible for the amazingly disciplined rise, in order from 1880, of Japan, Hong Kong, Singapore, South Korea and China.  The second to the scientific fecundity of Israel since its formation in 1947.

In terms of fundamental scientific research, America, Germany and England dominate the scene so far, having won something like 95% of all Nobel prizes in scientific subjects over the past century.  Proportionate to the populations of the other industrial nations, only Israel comes near them — if it is not already exceeding — the trio.

The ‘Confucian Five’ are, however, also lumbered with highly authoritarian education styles involving large quantities of rote-learning and this greatly reduces the ability of young graduates to think laterally and flexibility.  This is absolutely required for any chance of scientific breakthroughs and the development of consequent innovations.  However, Japanese and Chinese post-grads who spend several years in America — where their original authoritarian conditioning has a chance to rub off — are now beginning to show through in terms of a few Nobel prizes and papers in the weightier scientific journals.

The advanced countries are now sated with consumer goods and the continuing cornucopia of scientific discoveries in the research labs of the three main countries will now be deflected almost completely into innovations of production goods, infrastructure (particularly in the use of superior carbon-based materials replacing metals-based ones) and advanced personal services, particularly in education and health care.  This is all high-value trade which will join what is now a virtual monopoly of high value consumer goods produced by China mainly.

There is no chance for most countries to break into high value trade — the only route by which the average standard of living can be raised.  There can only be a fairly brief window of opportunity from now onwards. To be fair, India, Brazil and Russia all have some scientific propensity and might possibly be able break into high value trade in the next ten years or so.  But it will have to be soon because China is foreclosing all the gaps that still might exist in exports.  Otherwise the window of opportunity is now largely closed.  Their only long term economic strategy depends on getting their populations down as quickly as possible and, for the lucky ones, with the right climate, geology and rich natural environment, to develop tourism for the advanced countries’ holiday makers, scientists and young people looking for a spell of adventure.

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