I live in Germany, which by some accounts, is the third largest economy, and we have literally no answer for what is next, economically. Neither in the public nor private sectors. Nobody is investing, nobody is building new things, nobody even knows what to do next. But the story is the same throughout Europe as far as I can see. All industries hope to keep selling the same old shit. But the 3rd world is catching up. They can manufacture goods that are just as good, and for much cheaper. Heck, some can even do it cleaner too, since they have access to cleaner energy sources. But we also have no real 21st century income streams.
It looks to me as though, only the US and China are undertaking really innovative projects.
Is my reading of the situation flawed? I would love to have your input.
It definitely comes and goes in waves, I think. The interplay between infrastructure and economy is key. Your economy is dependent on things like ports, rails, pipelines, cables, roads, powerstations, etc. A country can’t continually overhaul those things, and once they’ve invested in them, they are stuck for a while. This leads to weird situations where one country that’s been behind for a little while can pass another country.
The US electrified first, and when Europe electrified, it used higher voltage, which allowed for more efficient home electrification, while many Americans are stuck with slow kettles, and clothes dryers, water heaters, furnaces, and stoves that run on fossil fuels. Similarly, widespread internet rolled out in the US first, but countries that came later were able to get higher speeds.
The economy of most countries, especially the US and China, is a house of cards. While there may be more investment, there’s also more risk, and more inequality. Germany may be more stagnant, but it also may be more stable. It doesn’t matter if the GDP per capita is higher in the US than Germany if the average person has no healthcare, paid for schooling, or social safety net.
One of the biggest lies (maybe more of a “spin” than a lie) that has been told over the past century is that the “economy” is the stock market, gdp, net import/exports, commodities, etc. Those are all important, and economists like to use them cause they are easier than getting to what really matters to most people.
Well put. Things like social cohesion and cultural/artistic value are hard to measure economically (at least in our current system), while they are arguably some of the biggest predictors of happiness and health. I don’t think it captures efficiency very well either.