Incalculable investing in the new era

About 30 years ago it suddenly became politically incorrect to use First, Second and Third World without somehow demeaning all those countries who were not Firsters.  Instead, we had “developed” and “developing”.  I’m sure others besides myself become confused sometimes.  Perhaps they ought to be typeset as “developed” and “developing“.

As a reminder, First World countries are the Seven which first set the industrial revolution going in the early decades of the 19th century — Britain, France, Belgium,  The Netherlands, Denmark, Germany and the United States.  Between them they presently monopolize fundamental research across every scientific faculty that has yet been set up.

The Seven were joined in later decades by another seven — Japan, Switzerland, Singapore, Israel, Sweden and Russia — which rapidly caught up by copying Western technology.  Between them all fourteen produce, and trade, high value goods and services almost exclusively with one another and have reached the highest levels of cultural pursuits.

Two World countries are those which might, in due course, break through into the fourteen above.  They are Brazil, China, India, Saudi Arabia, Iran, Australia, Canada, New Zealand and about twelve former communist countries of eastern Europe.  These have yet to show that they are capable of developing scientific research of the relevant depth and width to be able to innovate the new goods and services of tomorrow’s economy and thus get to share the First World’s standard of living.

This still leaves about 170 countries which have registered as nations with the United Nations Organization.  These can only be regarded as Third World countries because they have little to offer besides food and other low value resources for exports to mainly First World countries .  They have no education system worth speaking of — never mind scientific research.  They have little by way of adequate government and most will be suffering one way or another under dictators.

There will be some, though, with superb ecologies that make them attractive to both scientists and holiday makers. Taking care in developing these for sophisticated tourism and saving their wild life  at the same time will probably become highly profitable to some countries and their people in decades to some. But their one and only master strategy is, of course, to get their populations down — to approaching the sizes they were about 250 years ago.

This is a totally different scenario from the one that most orthodox economists were assuming — if not promoting — in the years before the 2008 Crisis.  This is that the world economy could keep on growing for centuries to come.  But this will be impossible because it would need a parallel growth in the use of high intensive energy.  The world economy has to stabilize at some stage, and it may be that we are not far off that now.

And we are also entering a world of advanced service occupations in which heavy investments — in education and training — will have to be made.  The rub is that, unlike now, when reasonable calculations can be made of what the returns might be, this will not be possible in tomorrow’s world.

One thought on “Incalculable investing in the new era

  1. First, Second and Third worlds refer to political — and only incidentally to economic — groupings. India, for instance, is in the Third World because it is (supposedly) not aligned with the US (a First World country), and not aligned with the USSR (then part of the Second World, now not part of the world). It also just so happens that India is a very poor country, impoverished by the greatest of set of clueless leaders the world has ever seen so far — MK Gandhi and his protege Nehru. Together they ensured that India is not just a Third World country, it made it into a third rate country.

    I think the 1st, 2nd, and 3rd World grouping no longer makes sense. Instead there should be a more honest 1st, 2nd and 3rd Rate groups. India would be in the last group, China is the 2nd, and the US would be in the 1st. UK would be in the 1st going into the 2nd, and so would France.

    Regarding economic growth: I believe that the prospects of economic growth is open-ended and limitless. All thinking that says growth cannot be sustained is based on the mistaken idea that resources are limited. To begin with, the earth itself is huge. The universe is huger still by several tens of orders of magnitude. There are no limits to the energy and matter that can be used for any sentient beings.

    We are not likely to run out of energy until the universe itself dies a heat death sometime after 10^^35 years. As long as we are here, there will be ideas. Ideas convert matter into natural resources and harness energy. Since there are no limits to ideas, limits to resources is a figment of a limited imagination.

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