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Friday, November 16, 2007

EU will be one sixteenth the size of Asia by 2050

Dizzy of www.dizzythinks.net has noticed something odd about the Adam Smith Institutes latest website relaunch. He doesn't say what he means in so many words, but a glance at the new banners reveals an unexpected racial emphasis away from a British look.

We are not talking about a token black skin for the sake of political correctness. The Caucasians appear in soft focus and are given less emphasis. The look has definitely gone, in a word, Asian.

Why would a long established British organisation, none other than the good old Adam Smith Institute try to badge itself as something that it is not, you might fairly ask - Asian?

A quick check back to the principles of economic growth, and their first exposition by Adam Smith reminds one that economic growth is the basis of the Wealth Of Nations, and that wherever private enterprise is allowed to flourish untrammelled by excessive regulation, those places will in time become the wealthiest places on earth.

The EU makes great play of its claim to be the world's largest marketplace. It may well be such a thing as of today, but one thing politicians and especially EU politicians have little grasp of, is the real effect of growth. If Europe continues to grow at around 2% a year, its economy will double by the year 2050. That sounds OK to most peoples' ears. The EU cannot be such a bad thing, then.

But stop a moment and consider this. India and China are growing at over 8% a year. A country that grows at 8% a year doubles the size of its economy every 9 years (Do the math - 100, 108, 117, 126,136, 147, 159,171,185,200). So by the time the EU has doubled in size, Asia will have grown no less than 32 times.

Well done the ASI for noticing that the West is being eclipsed. Asian the future will be. More people's website banners will be looking Asiatic as every year goes by. The ASI got their first. That's all.

Britain is going down the plughole landlocked inside the EU regulatory growth desert - ably assisted by New Labour. No escape is possible, so prepare to be overwhelmed by the new kids on the block...that is more or less the rest of the world, where the lesson of economics, discovered by the British is now being applied.

THOUGHTS - It is unlikely a 9% growth rate would be achieved for 36 years in succession, but a growth rate of 4% or better is likely for much of the world. A 4% growth rate doubles every 17.5 years. The USA would quadruple in 35 years at its current growth rate, as will most of the rest of the world while Europe will only double. Parts of Asia will grow at 6% doubling every 13 years, so by 2050 will be around 10 times bigger than today, eclipsing Europe by 5 times.

1 comment:

Tim said...

Acording to the BRIC thesis Britain is set to do quite well actually....9th biggest economy in 2050 which doesnt seem so bad given its small population size vis-a-vis the rest of the top ten. Seems like quite a good plughole!