The purpose of this chapter is to define the dynamics of the economic infrastructure, which supports any civilization and defines the modus operandi of the world civilization in the 21st century and third millennium. This chapter especially addresses the economic roles of two countries/civilizations: Will the Chinese economy, as many suggest, continue its strong economic advance under its system of “authoritarian capitalism” and surpass in size that of the United States and its economically integrated partners (currently NAFTA), or will China convulse and stagnate? This chapter explores the scenario that the United States will see its destiny at the heart of a free trade area of the Atlantic with an economy significantly greater than China’s and with an even larger population. China will remain the dominant Asian economy, but it will do so independently, not as part of a regional economic union. The future of capitalism is also addressed. What kind of capitalism or other economic system must be applied in order to keep the world population within the threshold of the Ecosystem? The answer to this question will determine the future of civilization.
TopThe Evolution Of Civilization Markets
Why are some nations rich and others poor? Why are the poorest countries failing and what can be done about it? Why can the poor countries not apply the rich countries’ strategies to achieve the same level of living? There are many possible approaches to answer these questions, many exclusive of each other. In this study, the civilizational conditioning of economic development will be synthesized.
In 2005, the average income per capita of residents of the United States was $41,950 (in purchasing power parity (ppp) = common basket prices). In Switzerland, the most prosperous European country, it amounted to $37,080 (ppp). For the European Union this income reaches $28,915 (ppp). For China, this income was at the level of $6,600 (ppp), while in Hong Kong it was $34,670; in also Chinese-oriented Singapore, it was $27,780. But in African Malawi, it was only $650. (World Bank, 2007, pp. 14-16) Why?
As of the beginning of the 21st century, there are about 50 economically-failing states, which pose the central challenge of the developing world. The standard solutions cannot overcome problems with civil wars, a dependence on the extraction and export of natural resources, and bad governance (Collier, 2007). Perhaps these problems are conditioned by each civilization’s history.
The focus of this part of the study will be on a few civilizations only, those which are the most eager to dominate economic development in the 21st century and beyond. Figure 1 illustrates these civilizations’ development paths, which lead to the competition of the Western and Chinese civilizations in the 21st century.
Figure 1. The basic evolution of civilizations which are the foci of this study of the market development until after 2000+ (many other civilizations are not shown in this model)
Classical economics defines as determinants of economic development the factors of production, such as land, labor, and capital, economic structure (relationships among various sectors of the economy), production systems, and productivity. In this study more attention will paid to such factors as information-communication and knowledge, since it is these mind-driven factors that mostly determine the complexity and productivity of production systems.
Economic development in pre-civilized times was based mostly on recurring rounds of feast and famine, depending on natural variations in climate and on skill and luck in hunting. Life was certainly difficult, rough, and short. Average life spans were not more than about 20 years; few people could survive over the age of 50 (Leakey, 1996).