What Western governments can’t get into their heads is that the world market for consumer goods is largely satiated for the time being. The advanced countries have been largely so for the last 30 years or so, and the more . . . prosperous parts of the populations of the Third World in the last two years — after their giddy attempt at economic growth since the 2008 credit-crunch.
In the main, it’s only a replacement market from now onwards. While the world’s economic system as a whole has as much energy as it needs for production and the maintenance of infrastructure, the replacement market that we now have gives enough consumer motivation for the on-going distribution of profits between the different classes and between the advanced countries and those of the Third World — but no great advancement in terms of personal physical goods.
This is the reason why China has had to slow down its own rate of exports-dominated economic growth from about 10% a year for the last 30 years to 7% — or probably to 4% or 5% if the truth were known — now and in the years immediately ahead. It hasn’t done so for the other fancy reasons that some economists have proffered — that it is now having to deflect its investments into pollution control or the development of more state services such as health and old age pensions. China is certainly having to do these things, but it would have been all the more easily if it could have retained its 10% economic growth and not been forced down by force majeure.
China is in a huge mess as far as its financial system is concerned — particularly that caused by huge credit creation since 2008 — but then so are those of most of the advanced countries with most governments, many corporations and parts of populations in debt — a consequence of credit creation over a period of 30 years until 2008 — with no likelihood of alleviation unless ‘respectable’ economic growth is resumed.
Sooner or later, and in one way or another, the true state of the accounts books of both China and the advanced countries will be revealed. When that happens — hopefully with the inauguration of a new stable world trading currency — the true economic condition of the world will be revealed.
This is that although scientific research will continue to deliver amazing discoveries the practical products of thessse will be going into more efficient methods of production and of its distribution (infrastructure). It won’t alter the fact that there are no new consumer products to motivate any great surge in industrial output such as England and a few other countries experienced in the 1780 to 1980 period. Production of existing consumer products will increase only modestly and steadily as the Third World countries reduce their populations and thus share out their national incomes among fewer people.