Friday, February 13, 2015

Cannot be rich without a fight.

China is now the second richest country in the world after the US and before Japan but if its GDP is divided by its population then it is way down the list of countries of the world. On a list of nominal GDP China comes in at around 84 with $6,800 per capita per year while India is at 148 with $1,500 per capita per year. On a list of Purchasing Power Parity, which seeks to eliminate currency values, China is at 89 with $11,000 per capita per year and India is at around 126 with $5,000 per capita per year. The US, Canada, Australia, countries of western Europe and oil producing countries are the toppers in both the lists. There is now a theory of a ' middle income trap ' which states that poor countries will become richer up to a certain point and then get stuck there, failing to reach the heights of the white nations. How did the white nations become so rich and why will we fail to catch up? Seems that the genesis of the Industrial Revolution can be traced back to the Great Plague which ravaged Britain in 1348 and 1665. Europe and the US caught up with Britain by adopting an internal free market, a stable domestic banking system, high external tariff, universal education, and superb infrastructure. European countries fed their industries with looted resources from colonies, set up by invading other nations. Up to 1750 India and China contributed half the manufacturing of the world but the combined populations of the 2 countries amounted to about 80% of the global population. Epidemics and famines were not unknown in these 2 countries and would have ravaged the populations regularly. So, why were the populations of western countries so low, when birth control was actively discouraged by the church. Perhaps the authors have chosen to ignore one extremely important factor in the supremacy of western races. And that is warfare. The history of Europe is a history of constant wars. There was a Mad war, a Salt war, a Long war, an 80 years, a 100 years war and even a 350 years war. War not only reduces population by direct slaughter but also by causing starvation through destruction of agriculture and epidemics in large numbers of displaced people. Thus the scorched earth policy as an effective means to stop an invader. To win wars you need to have better arms than your enemy so the Europeans developed canons, rifles and battle ships which we could not match. Even tiny Portugal was able to establish colonies in India, Angola and Brazil. We can conclude that wealth is not possible without exploitation and a small population. We must reduce population and guard our resources. Sounds simple but can we?

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