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August 30, 2002
A Turnabout in the Economy
Given her spectacular Research and Development (R&D) successes - the catalyst for sustained economic growth - it is hard to concede that the present economic reverses suffered by the US could lead to unforeseeable dramatic changes with Europe and Japan triumphantly marching on and the US trudging behind as her economic slide gathers momentum.
Yet there are disturbing developments that seem to lend substance to such speculations. White House spokesman Ari Fleicher conceded the other day that there were ‘worrisome’ signs in recent data, including a dip in consumer confidence in July, when stock prices were plummeting. Another report, quoting the Commerce Department, claims the US economy’s skid into recession last year began earlier, and “cut more deeply into the full year’s performance than previously thought.”
Disturbing conclusions that seem to testify to speculations aired last year that it is Europe’s turn to lead the world. A TIME magazine study “Who will drive the world economy?” had posed the question: “Is it Europe’s turn to run the world?” and had observed: … No one disputed that the US economy is slowing and could even grind towards a recession, though most agreed that a recovery would come late this year. The hottest debate was over Europe’s ability to isolate itself from the woes across the Atlantic. The Continental consensus these days is that having missed the overwhelming US boom, the now blossoming eastern side of the Atlantic will continue to thrive….”
The report quoted Ernst Moritz Lipp, managing partner of Odewald & Campaignie, a German private-equity manager, who predicted that it would not be long before “Europe replaces the US as the engine of growth.” The catalyst precipitating Europe’s ascendancy is technology. “Europe in its innovative drive is where the US was three or four years ago,” says Lipp.
One may or may not agree with the TIME report. And some might accept while some would dispute Lipp’s observations. But there are historical precedents to support Lipp’s views. Indisputably, technology has been the catalyst of change accounting for the growth and decay of civilizations, continents, and countries.
The world’s four earliest civilizations - Mesopotamia, the Nile Valley, the Indus Valley, and the Yellow River Valley - sprang up and flourished outside the geographical boundaries of Europe and America. They nurtured scientific enquiry and sustained the creative impulse. According to Hugh Thomas (A History of the World), “The citizens of the towns of what is now Iraq were responsible for [the] fundamental innovations... They reached a mathematical level of achievement not touched elsewhere until the Renaissance”. Throughout the early ages, the march of science in the regions now forming parts of the Third World was religiously sustained. The universities of Cordova and Toledo in Spain formed the hub of scientific activity where scholars from the rich East - Syria, Egypt, Iraq and Afghanistan to name a few - dabbled in science, and prospective researchers from the poor West looked askance when told to go back to clipping sheep because their teachers “doubted the wisdom and value of training them for advanced scientific research”. By the time North America was opened up, much of North Africa, South and East Asia were both densely populated and highly organized - politically, culturally, and technologically. China appeared decidedly more innovative than Mediaeval Europe and better poised to stage a renaissance in Asia than was Italy in Europe.
History also testifies that science and GNP enjoy a fraternal bond and are closely correlated - the more productive a country is in the sciences, the larger its GNP tends to be. Thus the four earliest civilization which nurtured the creative impulse were a prosperous assemblage of communities. Even in the post-Renaissance period, marking the beginning of Europe’s recovery and subsequent mutation of science, trade between Asia and Europe proceeded on an even keel and the two enjoyed a comparable standard of living. Europe’s sustained ascendancy in science with its contemporaneous decline in Asia and Africa saw a reversal of fortunes - Europe turning rich and Asia and Africa becoming poor. Not much later, the latter were stripped of their sovereignty and colonized.
It is against this historical background that one may seriously ponder the question posed by TIME: Is it Europe’s turn to lead the world? The prospects cannot be wholly ruled out. However, taking into account the fact that in the past too Europe and Japan have taken the lead but the US has staged a comeback and retained her ascendancy and leadership role, thanks to her handsome inputs in R&D, it is possible that a turnabout in the current economic situation may well be in the offing. The sooner, the better.
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