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East and west converge on a problem
By Martin Wolf
Published: January 11 2011 23:38 | Last updated: January 11 2011 23:38
How is the “great convergence” – the topic of last week’s column – going to shape the world in the 21st century? Happily, in tackling this huge question, I have a guide: Ian Morris of Stanford, who has written a brilliant analysis of where we are, how we got here and where we might be going in a book that covers 16,000 years of human history.*
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According to Professor Morris, social development is driven by “greedy, lazy, frightened people” who “seek their own preferred balance among being comfortable, working as little as possible, and being safe”. Since human beings are clever and highly social, they invent technologies and create institutions to achieve these aims. Yet what any group of human beings is able to achieve is determined by geography. The impact of a given geography also changes: 1,000 years ago, the oceans were a barrier; 500 years ago, they were a highway.
Prof Morris also provides a fascinating account of the progress of two poles of civilisation. These are the “west”, the civilisations that descended from the agricultural revolution in the so-called “fertile crescent” in today’s Middle East, and the “east”, the civilisations that descended from an independent revolution in a part of what is now China. His conclusion is that the west was somewhat more advanced than the east until the fall of the western Roman empire, behind it from then until the 18th century, and then ahead. Eastern exploitation of the “advantages of backwardness”, a recurring theme, suggests another reversal in the 21st century.
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For Prof Morris, “social development” is an amalgam of four factors: energy use; urbanisation; military capacity; and information technology. The first is fundamental: the capture of energy is a necessary condition for existence; the more complex and advanced the society the more energy it captures. This is why “industrial revolution” is a misnomer for what happened two centuries ago. It was an energy revolution: we learnt how to exploit fossilised sunlight. Energy and ideas are the twin bases of our civilisation.
Prof Morris’s measures of social development and “energy capture” closely coincide with each other (see charts). We can notice three other things. First, western energy capture was the same in 1700 of the common era as it had been in 100, while China’s reached its pre-modern apogee in the 12th century. Second, energy capture and social development have exploded over the past two centuries. Finally, the east’s use has been rising very rapidly.
An analysis, from the development centre of the Organisation for Economic Co-operation and Development, argues that convergence has been changing the global balance of supply and demand for resources.** This is shown in recent rises in the real prices of metals and energy. The International Energy Agency points out that global primary energy demand could rise by another 50 per cent by 2035. Without a big change in the energy intensity of production, that is what the economic convergence we see has to mean: if all of humanity used the same energy per head as the rich countries do today, consumption of commercial energy would be three times what it is now (see charts).
As the OECD notes, the economic impact of convergence is broader than just this. The integration into the world economy of the labour supplies of China, India and the former Soviet Union doubled the number of people working in open economies. That must have had a downward impact on the relative wages of low-skill people, though the evidence contradicts the widespread belief that this has been a principal driver of rising inequality in rich countries. The growth of China and India has directly helped exporters of resources and purchasers of labour-intensive products. Resource-rich countries have been big winners from the first of these effects, though they face risks of de-industrialisation. Consumers in rich countries are the big winners from the second. In addition, among one of the more surprising consequences has been that desired savings have risen faster than investment, so generating the “savings glut” and downward pressure on real rates of interest.
Important though these effects are, they do at least reflect positive-sum developments: rising prosperity and widening opportunity. The biggest challenges arise where zero-sum outcomes are more likely. Resources are a big example. Political power is another. A rising east must alter the balance of global power and the abundance of cheap resources.
On the latter, it is an irony of intellectual history that Thomas Malthus, prophet of overpopulation, worried about the lack of resources just as these pessimistic assumptions became untrue. The biggest question of the 21st century may be whether resources prove to be binding constraints once again, as they so often proved to be, prior to 1800. Will ingenuity continue to overcome scarcity, or not? If the answer is “yes”, all of humanity might come to enjoy the historically unprecedented lifestyles of today’s most favoured people. If the answer is “no”, we might, instead, fall prey to what Prof Morris calls the “five horsemen of the apocalypse” – climate change, famine, state failure, migration and disease. Moreover, even if these problems are soluble, it may take a far higher level of political co-operation than is available to do so. This is particularly true where economic growth creates global externalities, climate change being the biggest challenge of this kind. This is not being managed. Political developments lag today’s reality.
The same is true of power politics. Now that we have the capacity to destroy civilisation, relations among powerful states have become perilous. After the use of the atomic bomb, Albert Einstein argued that “the only salvation for civilisation and the human race lies in the creation of world government”. Einstein was condemned as naive but his comment might still be true.
The “great convergence” is an epoch-making transformation. It is the spread of the energy-abundant economy to much of humanity. But if we do not manage the consequent pressure on resources, it may end in misery; and if we do not manage the shifts in power, it may end in war. One of Prof Morris’s most optimistic views is that each age gets the thought it needs. Given the speed of change, will it come soon enough?
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