The decline and (possible) rise of the West

China already makes almost every product that the modern consumer wants, or is likely to want, given the normal pattern of everyday life in the largely locked-up urbanized social structure of America or Western Europe. China’s industrial rise has occurred after only 30 years of its resumption of international trading since Deng Xiaoping and the employment of only one third of its population so far. Approaching one billion more Chinese have yet to leave agriculture and enter the factories, warehouses, offices, shops and internet activities that are necessary. If they were to do so over the next 30 years, and if automation continues to proceed apace, then China would easily be able to make all conceivable consumer products for every person in the world, given the urbanized structure to which even the developing countries are fast heading.
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Maybe it takes a madman to end a madness (300)

When Ben Bernanke, the chairman of the US Fed, said a few weeks ago to a Congressional committee that he ‘didn’t understand’ the gold market he was being disingenuous to the Nth degree. He and US Treasury Secretary Geithner and all the top people in US banking, the IMF and the Western central banks know of the damage that Nixon’s decision did in 1971, when he cut the tie of the American dollar with gold and unleashed inflation on America and the world.
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Who will mourn for Lonesome George? (400)

Poor old Lonesome George. He’s a Galapagos turtle and the last of his kind. When he dies a whole species disappears. Have sympathy also for the Yangtze Giant Softshell turtle. There are five of those, now residing at China’s Suzhou Zoo, and their sex lives are being observed, titivated and applauded (when the occasional events occur!) by a platoon of vets, biologists and zoo-keepers in the hope of saving the species.
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To nation-state politicians and trade unionists (950)

No nation can be truly independent unless it satisfies three criteria. Firstly, its government must be able to try and prevent itself being attacked by force. That ideal was one of those laid down in the Treaty of Westphalia in 1648 but, starting with the advent of mobile heavy artillery, has been in the breach ever since. Today, with nuclear bombs able to be carried in briefcases or financial systems able to be cyber-attacked, even a small nation with sufficiently specialized skills could destroy the economy of a large nation.
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Creative destruction for a while longer (350)

The most recent uprising in North Africa has caused Mary Ann Sieghart to write of “The dawning of Arab democracy” in The Independent today. It isn’t. It’s the dawning of Arab frustration in not being able to buy the consumer goods that Western people are able to enjoy. But the latter were only able to buy these goods, one by one, as they invented and made them themselves over the last 300 years or so of the Industrial Revolution.
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The perceptive friends on my Short List (250)

Today’s nugget of information is owed to Emma Simon in today’s Daily Telegraph where she writes:

“The relative price of gold and oil has remained almost constant over the past 50 years. So although the price of both (in either pounds or dollars) has risen during this period, if you were buying a barrel of oil with bullion you would hand over roughly the same weight of gold as you would have done in 1950.
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Frustrated young Egyptians taking to the boats? (300)

Two successive headline stories in today’s New York Times confirms my fears of this week that the Egyptian Army Council generals are out-manoeuvring the ‘democracy-first’ youthful protesters of Tahrir Square. Firstly, a score (or more) of them were arrested before and during the protest, some have been tortured and have reappeared, others have disappeared. Secondly, the Army Council (and favoured officers) directly manage (and probably own) between 10% and 30% of the Egyptian economy and closely control the rest.
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The Middle East can then usefully use their sunshine (850)

America is the only advanced country in which democracy occurred before economic growth. It is an exceptional case because it was founded by immigrants who were already highly articulate in the political aspirations of a new meritocratic middle-class already beginning to take shape in Europe in trying to shake off the power of a landed aristocracy (having long since shaken off the power of the Church).
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Egypt’s army generals and their refrigerator factories (700)

The prospects for Egypt—particularly the highly aspirational, educated, but jobless, middle-class youth who led the demonstrations last week—don’t look good. They are being out-manoeuvred by the Army Council. Although it met with some representatives of the demonstrators on Sunday and will meet with them again today, the Army Council has already pre-empted matters by declaring a State of Emergency and are now appointing a panel of ‘legal experts’ to amend the Constitution.
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Being kind to our eldest (500)

The old man pointed to a cave high on the cliffside. “I will be going there soon,” he said with a smile to the anthropologist. And this is the way one hunter-gatherer group dealt with old folk who had become too much of a burden to feed and care for any longer. The old man would be carried up a rope ladder by, probably, one of his grandsons, deposited there on soft leaves with a little food and water and then left there, the ladder withdrawn.
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Welcome to a new Mubarak (200)

The recent demonstration initiated by the young middle-class in Cairo was not really about ‘democracy’. That was a fig leaf (though devoutedly held, no doubt). It was about the lack of jobs and the wish to buy the consumer goods that Western tourists carry around with them and what they see on television in Western homes. Meanwhile, what will the Army Council be doing, apart from promising elections in six months? Continue reading

Discovering another eccentric this morning (700)

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.
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For the lack of a horseshoe the battle was lost (950)

For the lack of voice-recognition software in their mobile phones, the revolution was lost. In the last 17 days the middle-class students and intelligentsia of Tahrir Square in Cairo were unable to present specific proposals beyond “Mubarak must go”; Muburak and his army council were unable to present the specific steps by which some sort of acceptable reform could be carried out. We don’t yet know what the outcome will be—which side will ‘win’—but it’s almost certainly going to be a disaster either way.
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Morning thoughts prompted by the Yanomamo (1150)

The photographs that have appeared in most newspapers in the last few days were those taken of an uncontactable tribe in the Yanomamo region of the Amazonian rainforest bordering Peru. Looking upwards from a forest clearing at the airplane slowly flying a mile above them and then around them, they must have wondered just what the object was. Was it a God? Was it a strange new bird? Was it a messenger from people who live above the clouds?
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The fall and (possible) rise of the West (1050)

There is only one way that the Western advanced countries—or some of them—are going to survive in the coming three or four decades. This is by making, and exporting, those production goods and specialized equipment that China, India, Brazil and one or two others still need as they proceed to become fully industrialized and supply us fully with all the consumer goods that we need or have time and space to use. There is already a name for this trend. It is so dreadful that it is only whispered by some economists and politicians at present. It is called “jobless growth”.
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We need tithings (850)

Leo Tolstoy’s view of history was that events produce the leaders as opposed to the then current idea that exceptional leaders initiate events—as usually conveyed in the history books. And this, of course, is the theme of what is probably the greatest novel ever written, War and Peace (although, interestingly, Tolstoy himself did not regard it as a novel but as a statement about humankind).
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Egypt’s hourglass problem (450)

As I write, the crowd is gathering in Tahrir Square in Cairo hoping to finally wrench power from Hosni Mubarak, Egypt’s President. My guess is that the people will get an offer of something—such as negotiations—and, towards the end of today, they will disperse, having apparently achieved what they want. Tomorrow, they’ll go back to work—or their unemployment—and normal life will resume. They’ve got to. Even the man-in-the-street realizes that the banks have got to re-open, the stock market has to resume, and imports and exports, particularly of food, have got to flow again. The Egyptian economy is now so fragile that it could collapse completely into total breakdown if the demonstrations were to continue for much longer.
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