Worlds Apart: A Firsthand Look at Emerging Market Growth
Yes, we’re back at home, after flying around the world. It was a good trip. No problems. No hassles. Everything went well.
What was the point?
“You know, my friends and relatives in the states still believe that the US is the greatest place in the world,” explained an American in Melbourne, Australia. “They think the rest of the world is full of poor people who can’t wait to emigrate to the US. They need to get out more.”
So we get out. We open our eyes. We look around.
And what do we see?
We see a whole world full of people who are hustling and bustling…schlepping and bussing…each trying to gain an advantage…each looking for a way to get richer, faster.
The motivations all over the world are about the same. People generally want wealth, power and status. And they want to get it in the easiest possible way. But it can mean different things to different people…and they go about it differently too. In the mature economies, they look for subsidies and angles. Tax breaks. Bailouts. Boondoggles. Sinecures.
“We have plenty of corruption here in India, too,” a colleague noted. “But most people know they can’t get much from the government. They have no choice. They have to start a business or get a job.”
Nothing stands still. A few years ago, the Russkies, the Indians and the Chinese were all very helpfully sitting on the sidelines. With their goofy theories and their counterproductive policies, they posed no competition. Americans found it easy to feel superior. Half the world had tied its hands behind its back.
But in the ’70s and ’80s, things began to change. “To get rich is glorious,” said Deng Xiaoping. “Perestroika,” said Gorbachev. And now they’re all at it. Indians, Brazilians, Turks, Indonesians – they all have faster growth rates and much less debt than the developed countries. China and Turkey are both growing about 5 times faster than the US. India, Brazil and a dozen other countries aren’t far behind.
The latest test scores show Chinese math students in Shanghai far ahead of Americans. And the latest reports tell us Chinese trains are setting records – at 300 mph.
Nothing is off limits. No industry is safe. Nobody can expect a free lunch forever.
In India, we rode in a Nano, the car Tata Motors is selling for $2,500. It was a little loud…but surprisingly spacious and comfortable. For getting around town, it seems perfectly adequate. And soon it will be available in the US. How will Detroit compete with these guys on the low end? And on the high end, there’s plenty of competition too – from Japan and Germany.
“But wait…Germany is a mature economy too.”
Well, yes…and no. Germany’s factories and infrastructure were flattened in WWII. It had to rebuild from the bottom up. Its post-war government was completely new. Its currency just came out less than 10 years ago.
Besides that, a large piece of present-day Germany lived under the heel of the Soviets for 45 years. They had a close-hand look at what central planning can do to an economy.
America’s government, meanwhile, has been in business since 1776. Its economy has been the biggest in the world for the last 110 years. It was the only major combatant in WWII to come out the other end with its wartime plant and equipment intact. It has had the world’s richest people and the most gold for many years.
“Nothing fails like success,” is one of our Daily Reckoning dicta. Will it fail now, or later? We don’t know. But readers are urged to get out more…and draw their own conclusions.