Hudson’s Theory of Economics

Keith had instructed me to post this after he was gone. The following is a highly compressed version of what he considered “the most authentic picture yet of the world economy” as he saw it.

Thanks. Atanu


Many economists see the Industrial Revolution (IR) as a model for further lesser expansions of world manufacturing and trade country by country.  The model was — and still is — aspired to by many countries but the first full burgeoning of the IR with its consequences of large profits, subsequent large re-investments and a moving on from one industry to another was confined only to  six countries with England only sightly in the lead.

Although England turned out to be the necessary instigator of it all, the other countries followed rapidly within a few years — all between the years 1780 and 1980. These are (northrn) France, Belgium, Netherland, Germany and America.  A few more European neighbours such as Switzerland and the Nordic countries also started industrialing some of their manufacturing but in unsystenic way.  They are not to be compared with the powerful government assisted copying of products and systems of the IR which Japan, Korea and China undertook before the end of the 19th century and Singapore halfway through the 20th.

Although the Asian Four now export consumer and producer goods quite up to the standard of those made in the Western Six they don’t necessarily make the most technically sophisticated components of those products, nor the scientific discoveries that gave rise to them. Those are still due to leading edge research into all the current areas of scientific curiosity and discovery.  Ninety per cent of all Nobel Prizes in the science fields (excluding economics) are won every year by scientists from one the Western Six.

The same decrepancy may apply as concerning the characteristic mode of production in the new era as we gradually leave the high heat intensity, ‘metal bashing’ era behind and develop carbon-based compounds and software using DNA-type algorithms

There are also a few other countries which already give a high value to scientific research and may well come up with highly creative industries in the future — he three Nordic countries, the three western Baltic countries, Denmark, Switzerland, Austria, Russia, India and the least populous, but possibly the most precocious, Israel.

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Keith Hudson Has Passed Away

Dear All,

With a heavy heart it is my sad duty to inform you that I learned from Sue Walker just now that her dad, and our treasured friend, Keith Hudson passed away today morning. We cherish his memory and celebrate his contributions. He enriched the lives of everyone he touched across the world. May his good karma (the consequences of an individual’s actions) continue to echo through time and space.


Sincerely yours,

Coffee has risen well above tea in the social sipping order in the last 200 years. This is rather in the same way that cigarettes overtook snuff since it used to sit in the great coat pockets of Napoleon Bonaparte and the Duke of Wellington as they faced each other in battle.

Modern Chinese biologists, after three years’ intensive analysis, have discovered a great many more subtle flavours in tea leaves.  Tea DNA is far more sophisticated and surprisingful than the two bog standard version of coffee — arabica and robusta.

There may be no more uniquely new status goods on the shelves but there are certainly delicious refinements of old ones to come, especially when freshly plucked tea leaves are composted with truffles for a year or two, enhancing its social status well beyond that of even the best arabica.

The crucial numbers

There are too many ambitious males — with slightly excessive testosterone in their bodies when born.  This, if anything, is the most egregious fault that affects us today. Nature hadn’t made a mistake during the six million years of living in small groups in the African Savannah, the North American Prairie or the Asian Steppes because no group was viable if growing to more than 80 to 100 individuals at all ages.

This involved no more than a dozen mature males with, on average every seventh or eighth more than usually ambitious.  This meant that as a group leader started making mistakes in old age — that being 40 or even less in those times — then there was always a natural successor to take over.

It is the fifth, sixth or seventh position in the pecking order of a group that is the most crucial.  Those furthest away from the existing leader, can be easily tempted to withdraw their loyalties and throw in their lot with a potential new leader taking shape among them.  This has occurred thousands of times in history once man forsook hunter-gatherer groups for larger bodies.  One epic story will exemplify*.

In 1917 Prime Minister Lloyd George, with a Cabinet of Ministers approaching 20 in number, was losing the war against Germany because he was unable to overrule the Royal Navy in coping with Germany’s U-boat attacks.  He reduced the number to five and changed the strategy totally.  Within weeks, masses of U-boats were sunk and sufficient food and armaments were able to be landed on our shores, turning the trend of the war around within weeks.

Today, however, with too many overlarge organizations in business and government, we have far too many unnecessarily ambitious males who are virtually foot-loose — building up their own departments for want of anything else to do —  until we begin to understand the importance of organization structures.  We’re not far along that path yet.

[*The Standing Committee of the Politburo — that, the Chinese Government — has been reduced from nine members to six in the last two or three years.  This will make the position of the President, Xi Jinping virtually unassailable until the end of his present term, 2020 and probably helps him to persuade the Politburo to extend his term of office further.]