The bad turning we made

The problem with those who’d like to see economic growth sweep over the whole world and bring every country up to the standard of living of the half-dozen First World countries is that they then cannot plausibly explain just how it could be done.

Considering that there are several hundred thousand professors and graduate economists in academe, government and central banks and that they’ve had six years to think about it since the 2008 Crash then it’s a pretty poor show.

In their text books, economists can easily show just what happened in 1780 when immense profits were made from factory spinning cotton bolls into thread and then, three decade later into factory woven cloth for all countries — especially the warm and humid ones south of our latitudes — even down to scattered groups of hitherto naked hunter-gatherer groups who became ashamed when visited by white merchants.

All this yielded further vast investments for further technologies in iron and steel that rounded off the total unique experiment in the whole of human history — the astonishing phenomenon that we call the industrial revolution, 1780 to 1980.

The industrial revolution ended in 1980 in effect when the ordinary consumer in the originating countries in the no longer continued to save hard in order to buy the next desirable status object by increasingly relied on the credit card and the increasingly undisciplined habit of banks in issuing credit

Japan and  China had carried out excellent copy jobs of the English industrial revolution in 1880 and 1980 respectively but they were — and still are — also relatively poor in creating new technologies of thei own  and are content to coast along on what Germany, France, the Netherlands, England have developed America had already developed.

And there is also another huge phenomenon that also took place during the 1780-1980 industrial revolution. Just as the production of goods expanded a thousand-fold or more during that period so also the geology of the earth was also accidentally able to supply the necessary energy inputs.

From whale oil and wood to coal mining — and then vast new acreages of hitherto unexpected deep-mined coal — to oil production in the Middle East and finally to immense quantities of natural gas that had previously gone to waste.

Without all this commensurate supply of vast quantities of energy rising in leaps from year to year, the industrial revolution would have played itself out by about 1820 or 1830 at the most.  Modest amounts of cotton would have continued to be imported but more than adequately taken up by hand-spinners and hand-weavers in cottages all over he country.  Nothing by way of industrialisation would have been needed — nor any sort of progression to deep-mined coal, iron and steel production or the railways.

It is was the unique relationship between the rapidly expanding supply of cotton products in England and the availability if energy at every stage it was needed that was the coincidence that could, in theory, have occurred many times before in Persian, Indian, Chinese, Islamic, etc Empires.

All these had sufficient technology behind them — the Bronze Age and the Iron Age as well as spinning and weaving many products.  But why did they not catch on to automated production in factories?  It was the lack of the coincidence mentioned above and which became concentrated in Liverpool Port and surrounding towns.

For the 6 billion people who don’t have the standard of living of the dozen or so advanced countries there is no way that any group or region of them can find a product that is unique enough to sell widely across the world nor can they lay their hands on a vast new energy source that they would also need.

The long and the short of it all is that we made a bad turning from hunter-gathering to agriculture — and that must be rectified over the next two or three hundred years before the huge disparities between the rich and the poor can be rectified.

One thought on “The bad turning we made

  1. Disparities between the rich and the poor is just a special instance of what appears to be the general rule of nature — that inequalities magnify with time. At the beginning, the was little variety in the universe, around the Big Bang. Then things began to get more interesting. When the earth was formed, there was nothing like the variety that came into being as the earth cooled. Then life began. You had simple undifferentiated kinds of living organisms. Now we have a huge variety — big, small, complex, simple. Humans too became diverse. From the start in Africa, now we have a variety.

    People around the world were nearly all equally poor about 10K years ago. With human progress, we have had increases in inequality. Inequality is not a bug in the system, it’s a feature. It makes the world — indeed the universe — go round. Bemoaning inequality and wishing it to go away is a futile exercise. Life is change and change is always towards increasing inequality.

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