Here is the second: colonialism is over. Now, in the economic sense, too.
One of the driving factors supporting the development of capitalism centuries – long before industrial revolution in fact – has been the disparity between some communities with open access to market and some with none, limited or disfavoured access.
Take it as fact, ethical undertones aside; for example:
- prosperity of cities was built (also) leveraging relative strength of in-city consumers and value-added producers compared to out-of-the-walls agricultural producers
- prosperity of countries was built (also) leveraging a similar relation with other countries – colonies first, then competing countries having lost short- and long-term supremacy wars. The latter has included top economic and political global players, notably China, India, then Russia and a bunch of Eastern and Western Europe countries.
- prosperity of global economic organizations, including financial systems and enterprises, has been built also leveraging the disparity in economic strength across economies. This for example has – reasonably – driven savings from many economies to few more productive, stable and most importantly hosting efficient markets.
This is now over, for two complementary and related reasons:
- The last and most important economies that were prepared or forced to accept a subordinate economic role are now able or forced to challenge that balance. Think BRIC, or oil producers. Or, the colonies are over.
- The huge effectiveness advantage Western financial markets had sported has been challenged, possibly for good, by their (our) failure to assess credit risk in their (our) own economies. Or, the Western market supremacy is doubtful.
What will happen? We’ll see. Some obvious trends:
- cost of food is rising. The share of personal income to be devoted to feeding has decreased for centuries in the global market. This is likely over now that the last and largest food “colonies” are changing status. See a recent comment on The Economist.
- cost of defence is rising again. The number of top-rank countries (or nations, or other communities) that can afford defending themselves and consider challenging others is increasing from an amazing low (one or two or three) in the last few decades.
- cost of keeping social order is rising. Many generations have implicitly defined affluence or at least social comfort and peace as individual access to cheaper and cheaper food, then more and more goods and services beyond that. Many of those who now see that receding will – reasonably – look for a different social order or strive to preserve the existing one. Violence becomes a much more appealing option, at many levels. Authoritarian, xenophobic regimes are just one level.
Amazingly, each of these developments can – or rather may, with the greatest of luck – drive great improvements in the current status of things. For instance:
- cost of food – think water – rising again may nudge us towards a sustainable business and social model that keeps us alive within existing physical and biological limits of our ecosystem. The sooner the better.
- cost of defence rising again – think 9/11 and new economies reaching leadership in critical military technology plus economic clout to grow their weapon stocks – may nudge us towards reviewing and strengthening political mechanisms for conflict management. As complex in today’s world compared to the Cold War as the many-body celestial dynamics problem is compared to the two-bodies.
So, colonialism is over. At last.
Originally posted on http://gmindshare.spaces.live.com.