Reasons to be cheerful

Here is a list of reasons the world economy may not be doomed.
1) Continued productivity increases in the domestic economy of between one and one and a half percent a year.
By 'domestic economy' I mean housework rather than paid work. In my opinion much of what we regard as industrial productivity growth is actually the effect of household gadgets allowing people to work longer hours. This accounts for many of the mysteries of economic growth- such as why the working week is not getting shorter as productivity rises. It was commonly believed in the 1960's that we would all be working ten or twenty hours a week by now. My theory also explains why we do not feel as wealthy as we appear to economists. This is because much of what looks like consumption to an economist (dishwashers, pizza, time saving gadgets of all kinds) is actually capital expenditure. These items do not increase living standards but merely allow people to work longer hours.
Increases in domestic productivity will always leak across to GDP sooner or later. Current productivity growth can be seen as a sort of latent GDP growth that is stored for future years.
No, no, no- not imperialism- solidarity!2) The possibility that Africa may become a cheap labor reserve once China prices itself out of the market. Living standards must and should rise in China and this will result in consumer goods inflation in the West unless a new manufacturing base is found. It is quite likely that many low tech Chinese manufacturing operations will relocate to Africa turning most of Africa into a Chinese colony.
3) Continuing reductions in computing costs.
4) The possibility of eternal life! Sooner or later a biotech company will spark the greatest stock-market boom in all of history. The mere rumor of viable technology will do this.
5) Death cults such as radical Islam tend to burn themselves out over time. Marxist terrorism was quite common in Europe in the 1970's and then simply stopped being trendy.
The more things change the more they stay the same.6) The main threat to the west is probably China and this may not materialize. China is at present following a colonial policy towards markets it regards as its own. The problem with this is that it leads to war. When nations seek to establish ownership of markets and resources they enslave the colony and they also deny other nations the markets and resources they need to maintain an industrial society. Very few nations will willingly allow themselves to become rural backwaters. Most prefer to go to war. Western nations realized at the end of world war two that peace and free trade go together and this is one reason Britain disposed of its colonies.
China has already ensured itself a virtual monopoly over the extraction of copper by purchasing influence in Africa much as the British Empire did in the last century. Unfortunately the British monopoly of certain resources (or the fear of it) helped to bring about the first world war and I hope that China will not repeat the Empire's mistakes. China could wage economic warfare and tip the world into a great depression but I hope they have more sense. I also hope that China will become a functioning democracy without going through civil war or Soviet style economic collapse. In fact democracy, peace and openness to the west tend to go together. Right now I would rate China as having greater than 50% chance of making it.
Saddam is one 'survivalist' who did not survive.7) None of this means that you should not prep for the worst. A well prepared individual is prepared against every eventuality- this includes everything from a household fire to choking on a chicken bone. Being a survivalist is like having an insurance policy if the worst happens.


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