Soon Bangladesh Will have a larger economy than Britain As Per Economics
Dated : 04 Jan 2021 (IST)
Larger groups of people — like India and China — should be richer in aggregate, should have larger economies, than smaller groups of people. China will overtake the US as the world’s largest economy — as, of course, it should.
This likely to happen well before 2030. By then India will have become the third largest economy, which it already is in terms of Purchasing Power Parity. In fact PPP is the true indicator of a Counntry’s economy and not the way GDP is calculated in terms if American dollars.
Just about four hundred years back India had 30% of World GDP, with China having 25% and the balance 45% with rest of the known world. This was very simple because, everything else being equal, a larger group of people should produce a larger economy than a smaller group of people.
Thus, India and China — as the largest groups of people within the borders of the one country were the largest economies in the world and both these countries were way ahead Civilizationally than the Asian and Europeans. Thus looking over history, this is what was true for most of it.
The anomaly, the oddity that is being remarked upon, is not that India and China will grow to that position again, it’s that it is not true here and right now. This is not, of course, how we normally think of things precisely because it has not been the recent experience. But it is how we should think of things. In fact its time that Americans and Europeans start 5hinking this way, to avoid future shock.
Consider a world in which all people were equal. We each produced the same amount and could thus consume the same amount. In such a case then, a group of 1 million of us would have a smaller economy than 10 million of us. This is clear and obvious.
To use the economic jargon a bit, the GDP per capita would be equal but some countries, just by having a larger population, would have a higher GDP. For most of history, this is roughly how it did work too. The living standards of the average person in India and China was much better than Europe.
In modern money, that is after 1800 somewhere between $600 and $1,000 a year, as measured by that GDP per capita. This is just what history was. It did not get much lower because if it did then not enough children would survive to maintain the population. If it got much higher, then population growth would rise, and in the next generation, there would be more people, but at that same old standard of living. This is now called “Malthusian” growth.
About 300 years ago, this first changed. Quite why is still argued about, although we do know what happened – one was that after reaching their Zenith in both India and China, polity started neglecting their Armed Forces. Social standing of Army went down. Simultaneously Europe entered the industrial revolution. Technological advancement sped up for some unknown reason, and this led to living standards rising faster than populations could alter to bring them back down again.
As we know, this started in England and spread through Europe. Then the Europeans started venturing out and were soon looting the rest of the World instead if trading with them. Like the Fund and Vandals of the bygone era, these looters soon conquered Asia and the Americas and automatically started looting the wealth. They wiped out the locals in Americas and badky devastated Africa and a bit less the Asia.
However the new phase has taken all this time to spread to near everywhere in the world, but this is what is happening now.
Except for those few places entirely cut off from the global economy everywhere is now having the new industrial revolution.
So this is exactly what has been causing Bangladesh’s 5 to 8 per cent GDP growth per year in recent decades. And it is the same for India and China and so on. Dacca is now slowly catching up and remaining its glory which had been decimated by the Britishers in a highly planned manner. Even during WW2, Churchil’s considered decisions killed more Bengalis than Hitler’s planned decision on the Jesus. This is a fact from which it is difficult to run away.
To illustrate the difference here between growth in the economy and living standards. It is often said that India — the wider India, including all of Bengal and Pakistan — was poorer when the British left than when they arrived. This is totally true.and calculated by Subramanium Swamy to the last paisa. Though some Britishers will still argue to the contrary but now Indians have proved them as liars with all the facts and figures of the British loot.
What is happening now is that India and China and now even Bangladesh are going back to growth. Everywhere, there is an increase in living standards from growth. Though they still have some way to go to get to everyone living at the same standard of course, given that historical divergence.
But it is one of the general assumptions within economics that it will happen. In the absence of bad policy from local governments, that is. We can also observe it happening: the currently poorer countries are growing faster — in both GDP and GDP per capita — than the currently richer ones. Thus, the gap is closing.
We are, thus, getting back to where we ought to be. Which is that larger groups of people — like India and China — should be richer in aggregate, should have larger economies, than smaller groups of people.
Both China and India are closing in upon, within a decade perhaps, being the two largest economy in the world again. It may still be poorer per person than a few of the European countries but that is just something that will take a few more years to rectify.
Soon Bangladesh which has a larger population that Britain, at some point, will have a larger economy than Britain. Lost glory of Dacca over London will then get re stored. It will be interesting to see what people say when that happens — won’t it?
