The great levelling

Some four or five hundred years ago, the life of the ordinary working man was pretty much the same wherever in the world he lived: just enough to put a roof over his head and some food on the table, with a bit left over either to save or for little luxuries – a packet of tea, perhaps, or maybe a pint or three of beer at the end of the week.

Then the industrial revolution intervened. While the work may have been miserable for many, the pay was better and improved as the industrial revolution gathered pace. Today’s worker in the west enjoys luxury unimagined by all but the very wealthiest of just 200 years ago.

Much of the world was excluded, one way or another by this enrichment. But one of the consequences of open markets and globalisation is that it has brought in billions of new workers who all want their small slice of world prosperity. The global ‘levelling’ of incomes has begun.

This process should have started 50 years ago, but was delayed by the autarkical barriers to trade put up by countries seeking to ‘build socialism’, whether Nehru-style or Soviet-style, across the world. Furthermore, after India and China started to lift their trade restrictions and compete more intensively, the process in the US and Europe was masked by borrowing, by both consumers and governments, that maintained the façade of prosperity. The west’s family silver was being pawned.

Now, the future can be seen with clarity: ‘the west’ will continue to be squeezed as long as there are at least a couple of hundred million willing workers in Africa, India, South America or China willing to work at a discount to the average American or British factory worker (if you can find one).

It will take many years until the process has drawn to its inevitable conclusion, by which time the world will be a very different place. The question is, are there enough resources in the world to keep the global population in the style that it has become accustomed to, or would like to become accustomed to?

The next few decades will hold the answer.

Graeme Burton
Managing Editor

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