Thursday, November 01, 2012

Inclusive growth is not possible.

Centuries ago the world had a feudal system wherein powerful barons claimed large areas of land and the right to tax peasants living on and farming that land. However, there was a limit to how much peasants could pay and drought, flood or epidemics caused large scale deaths reducing numbers paying taxes. The only way was to conquer more land. Europe, which is poor in natural resources and is covered in snow for part of the year, saw regular wars between states which induced a demand led improvement in arms, body armour and armed ships. Europeans conquered large areas of the world. Large areas of South America speak Spanish, Brazil and Angola speak Portuguese,  north African countries speak French and vast areas speak English following trends left by the conquerors. Germany had colonies in Africa and Indonesia was under the Dutch. The industrial revolution allowed European countries to loot resources and sell finished products to their colonies making them enormously rich. However, riches went to a few while the vast majority lived in poverty. In the US the whites grabbed all the land restricting native Americans to reservations, owned large farms and developed natural resources which is abundant there. However, farms required back breaking manual labor while mines and industries were often dangerous. Thus they needed cheap and disposable labor in the form of slaves. American ships raided west Africa and transported people in chains to work as slaves, while the British used " indentured labor " to build railroads and to work on sugarcane farms. Sadly for them, you cannot enslave people for ever so they started fighting again resulting in the First World War. This was followed by the great depression of 1929 leading to the Second World War. This also coincided with nations fighting for independence. Realising that colonialism was going to end they perpetuated their power by grabbing all the international institutions such as the IMF, the World Bank and the UN Security Council. With this power they set about supporting dictators in various countries so as to continue to loot resources. The US concentrated on South America and the Europeans looked Africa and Asia. This allowed them to become rich and, for the first time in world history, to set up a social welfare system to look after the sick, the elderly and the unemployed. China followed a similar path by grabbing land for development, forcing a one-child policy and buying up mines in other countries. Commodity prices have boomed as nations have realised the value of their resources. Now the US and European economies are in serious trouble and China has 1000 protests everyday. So, when the Congress talks about " inclusive growth " it means extortionate taxes on us to give handouts to the poor to keep them poor forever. Growth without exploitation can only come with fall in population reducing pressure on land and resources. Anything else is a lie.

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