Niall Ferguson recently gave a lecture to the Technology Entertainment Design conference that briefly addressed the global economic history of the past 500 years. In it he described what economists refer to as the Great Divergence where, during a period of rapid growth in global wealth, the per capita GDP of the western world increased dramatically while the rest of the world saw a more modest increase or stagnation.
He went on to define what he termed were the six killer apps that he thought were responsible for the great global imbalance in wealth and how that imbalance was being corrected in the 21st Century. Whatever one might think of Professor Ferguson’s theories, his lecture, available on the internet in both video and text, is certainly worth listening to. It should be required viewing by all Parliamentarians, business and union leaders and the incoming classes of UWI. Even the professors might learn something.
In it he defines the six most important things that shaped the economic growth of countries. There are Competition; Scientific research; Property Rights; Modern Medicine; The Consumer Society and finally a The Work Ethic.
Interestingly, he dismisses geography as a factor in the creation and accumulation of wealth citing the examples of Korea and Germany where two competing ideologies produced startlingly different results. Communism on the one hand, in East Germany and North Korea, produced grinding poverty while West Germany and South Korea developed robust economies. The difference was in the ideas and institutions that ordered the way of life and the economic activities of these four countries.
While Ferguson’s ideas might be controversial in some aspects, there is a need for us to analyze this lecture in the context of Barbados and the wider Caribbean region. Indeed we have done so from time to time, though in a rather piece meal and unstructured way. For example the periodic discussions about our work ethic and its role in national productivity indicates that at some level there needs to be an improvement but little real effort is applied to develop a solution.
It is time that we saw these issues in a holistic context, each reinforcing the other, strengthening the social fabric, buttressing property rights and the rights of the individual. We need to encourage innovative use of technological tools and enhance the competitive environment.
We well understand the value of modern medicine and the development of a healthy society as well as the value of education. Successive governments of both political parties have invested heavily in both areas. However, what is lacking in many of our educational institutions is the development of a positive work ethic and a greater degree of self discipline.
By discussing the pros and cons of Ferguson’s arguments we may better understand the key factors that will strengthen our own competitive edge while reinforcing our society. At the same time we can take the opportunity to cut loose much of the ideological baggage that has weighed us down, drained our will to work and made us part of a cult of victimization.
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