Janet Yellen and her committee at America’s central bank (the Fed) are about to raise the basic interest rate. Too fearful of raising it any higher it — and stalling or bankrupting too many businesses — it will only be by 0.25%. It is going to be interesting to see what effect it will have. There are more than one or more reasons why it will make hardly any differences at all to America’s economy. The first of these — though not in any order of importance — is:
1. There being no more uniquely new status goods, those who have full-time jobs and can afford the existing kit — house, car, furnishings, clothing, personal ornaments, leisure travel — will only be buying replacements or embellishments from now inwards. Two growing needs in all countries for better education and health care will require increasing numbers of highly educated professionals — ideally and ultimately on a one-for-one basis for longer or shorter periods of customers’ time — and will therefore take up an increasing proportion of normal incomes, thus unaffordable by most, except by fellow professionals.
Unless there is a transformation in the experience of all children from birth giving optimal emotional, socialisation and informational environments and thus the fullest possible development of individual genetic inheritance, then society of all countries is likely to continue to divide into two parts. One part is a highly professional elite and the other is an inadequately, even blunted, educated majority.
In the First World (so-called developed) countries the proportion of the elite in the proximate decades will remain roughly 15% as now. In the Third World (so-called developing) countries the elite is likely to remain at about 1%. In the ‘Second World’ countries (so-called fast emergent e.g. India, Russia, Brazil and some southern and eastern European countries), the percentage of the elite can be somewhere in between.
If indeed the above reason is the critical one then the future of mankind will depend on the relative birth rates between the elite and the masses.
The remaining four possible critical reasons follow in the next two Parts.