Mar 05 2011
Standard Chartered bank (The Super-Cycle Report, London, 2010) asserts that,
We are in a new ‘super-cycle’ driven by the industrialisation and urbanisation of emerging markets, and global trade.
They define a growth super-cycle as,
A period of historically high global growth, lasting a generation or more, driven by increasing trade, high rates of investment, urbanisation and technological innovation, characterised by the emergence of large, new economies, first seen in high catch-up growth rates across the emerging world.
This is closely related to what we at 21stCenturyWaves.com call a “Maslow Window”.
See: “State of the Wave — 10 Space Trends for 2011.”
In 2007, we were enjoying “the greatest economic boom ever” before it was interrupted by the financial Panic of 2008 and the Great Recession of 2008-10. As the recovery continues and the growth Super-Cycle takes off, we expect to accelerate toward the Great Boom of 2015 and another 1960s-style golden age of prosperity, exploration, and technology.
See: “State of the Wave: Today’s Gloom & Doom, and the 2015 Boom.”
According to Standard Chartered bank, we’ve enjoyed two previous growth super-cycles.
The first super-cycle took place during the second half of the 19th century, from 1870
until 1913, the eve of the First World War. At that time, the world economy witnessed a significant step-up in its rate of growth, rising 2.7% on average per annum in volume, or real, terms. That was a full 1% higher than the average growth rate seen during the previous half-century. America was the big gainer, moving from the fourth largest to the largest economy.
The first super-cycle culminated in the Peary/Panama/T. Roosevelt Maslow Window (1901-13), one of the most ebullient, transformative periods in U.S. history. It immediately followed a serious financial crisis known as the Panic of 1893 and the Great 1890s Recession, that have economic and political parallels with today.
The 2nd super-cycle featured the post-WW II expansion.
The second super-cycle was after the Second World War until the early 1970s. World growth averaged a huge 5% per annum, again in real or inflation-adjusted terms. Japan and the Asian tigers saw the biggest gains over this time. Japan, for instance, moved from 3% to 10% of the world economy.
The 2nd super-cycle culminated in the 1960s Apollo Maslow Window that featured the first great exploration that was “off-world”, the greatest macro engineering project of modern times, and probably the most transformative decade in U.S. history.
Although “emerging markets could propel a global boom comparable to the industrialization of the United States,” Standard Chartered believes the 3rd super-cycle represents a shift in global economic power from the U.S. and Europe to Asia. According to Ian Bremmer (Wall Street Journal, 3/2/11),
Americans and Europeans should be relieved to hear that other countries can do a bigger share of the world’s economic lifting.
However not everyone concurs. For example, Harvard professor Joseph Nye projects that,
China will give the U.S. a “run for its money” but it will not pass the U.S. in overall power in the first half of this century.
And the eminent British historian and author of Modern Times (2001), Paul Johnson, believes America will stay on top (WSJ, 3/5/11; B. Carney).
I think America has such huge strengths — particularly its freedom of thought and expression — that it’s going to survive as a top nation for the foreseeable future. And therefore take care of the world.
In any case, the 3rd super-cycle will feature a return to prosperity that should usher in the stunning 2015 Maslow Window. If the last 200+ years are any guide, we will experience wonders like space-based solar power systems, international commercial development of the Moon, and the initial expansion of human civilization to Mars.