Investment Chart Kondratiev Wave

Investment Chart Kondratiev Wave

Tuesday, 20 March 2012

Maddison and the distribution of power since the Romans

Angus Maddison was my hero, in his time at the OECD he has collected a treasure of data from very long ago.
The Chart above has nice colours and is well made by Sasha Nikitin.
Europe was before the Industrial Revolution not very important and the US did even not exist. Even Italy was dwarfed by China and India in the times that Rome dominated the world (as we learn in the West, the charts show a more realistic picture). Only China and India were important those days and the other countries were second fiddle.
Columbus didn’t change the balance powers a lot (but you saw India losing market share). The Industrial Revolution was the decisive change. Asia couldn’t follow the progress made possible by the Industrial Revolution (it was inflexible, no democracy, corrupt, bad institutions etc). The Opium Wars were the ultimate blow for China.

Deng, the most important man of the 20st century, caused the watershed (helped by the ICT-Revolution that made the world flat): from that moment you see China coming back and soon afterwards also India. Around 2050 you will see again the normal situation of before the Industrial Revolution with the US and Europe playing the second fiddle. They will remain interesting like Rome made Europe interesting after 0.
Hattip Lukas Daalder and source:

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