Phew. Both the US and the eurozone seem, for now, to be between crises. Investors should use this breathing space to study the bigger picture. The problems in the two largest developed economies are only a part of a wider global rebalancing, tectonic shifts which are reshaping everything from British corporate profits to Chinese capital spending programmes.
The great transition is well under way. As a percentage of rich nations’ gross domestic product, emerging nations’ output (measured in spending power) has risen from parity to almost 145 per cent in the past six years, International Monetary Fund data show.
JACK'S COMMENT BELOW
The technological capacity itself is there for the less wealthy countries to develop skyscrapers, higher-yielding agricultural techniques, or anything else that the developed world knows how to do. Without considering the financial part of it at all we would still have to conclude that the continually increasing developed country technology and capacity makes it feasible for country "a" to develop, as long as that country gets the technology. Any country that receives the technology could do it, unless they are located in the middle of a swamp or a desert, but even then they could probably just draw on some techniques that some expert has already developed in some part of the capitalist world. The capacity is there but we are just arguing about the means to develop that capacity through finance --- the actual technology exists. To put it into practice, you just need to move that technology to another piece of land (country).
You could take the same crew of one thousand persons with their cranes and materials and so forth and move it to a new country every year and in ten years you'd have ten countries with their own hooked-up starter system.
The argument is about the financing. It is about financing such a project, and that seems to me a different argument from whether the material possibility exists. That is the thesis of this post. The capacity is there. The question is of whether it shall happen, or perhaps whether it should happen. Not that anyone has that kind of moral control.
In a capitalistic world, businessmen always seem to be out there, willing to do stuff. Developing countries are therefore able to obtain that technology, at long last, and, as we said, if they can get the technology over to their piece of the world's geographical surface, they can develop.
Now to a few philosophical considerations (as if there were anything else) and then I'll cease this. Whether all those countries will do it intelligently and sustainably is another subject. It is not the world of the 19th century that we are applying this technology to but a different situation, both in terms of the multiplicity or sheer number of newly developing countries and in terms of the differences between the kind of global experience we are experiencing today and existed then.
Certainly, the notion of "growth," as the concept is currently employed, ought to be questioned. I would say that the less-developed countries could grow a little bit, if it helps them. I'll give them that. But the "overblown" economies need to put a cap on it. They can grow a little less, they are not a run-on sentence and I really doubt that there is an unlimited capacity for growth, unless, that is to say, we look at which kind of "growth" we really mean here. So, guess what I conclude?
Well, I think that the entire notion of growth should be internationalized. It's global growth these hotshots should be talking about not single-country growth. What exactly do we mean by "growth" anyways? I know it is their main word, but we aren't talking about growth of arboreal forests, for example. I'm happy for them that they found a nice word they can agree about. "Growth:" it sounds nice to them. But "growth" is a different word in English, than it is in the economist lingo. Ultimately it does not I would think make any more sense than any other economics jargon. Nor does it save the economists' project, their "study" of economics.
I know that businesses do need growth. It means, I believe, that they need to make a profit. (Hence the overarching concept of "economic growth," right? It just means profit, right?) But I favor "growth" in intelligence. How about growth in sustainability so you don't just kill everybody? That would be a nice application for the word "growth," too.
Or: How about "dismal," that's a word. "Dismal science".
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