Investment Chart Kondratiev Wave

Investment Chart Kondratiev Wave

Thursday, 19 July 2012

American dream (2): belief in free markets succumbs to bad times

The American Dream is the belief you can become rich when you work hard enough and that is mainly because the free market economy enables that. Pictures at night of North and South Korea show a big difference in wealth: without free markets it is difficult to get rich. In our theory of long waves the spirit of the age has to enable that the most important domains of freedom, care and justice are up to date good enough to cause better times. In some periods freedom is more important (like we saw in the past two decades), in some others justice and care (1965-1980 for example).

According to the table of PEW Center (via NYT: by Catherine Rampell) the Chinese and Brazilians are now the strongest believers in free markets, even more than Americans. The Ameriican Dream is exported to the BRIC’s, but Russia is moving away from it, just like in most other western countries where things are not going well. The belief in free market tanks when confidence in growth succumbs. Only Mexico is an exception, drug violence is asking for more justice, law and order and so free markets are not that popular even while economic growth is quite good

The table above shows that many Emerging Markets say things are better now than five years ago. The correlation between the two tables above is strong. One bad year is already causing a tumbling belief in free markets.
In most countries people are way better of than their parents, but the numbers for the US are lower than I blogged in America Dream 1. Several muslim countries did not do well. BRIC’s are in now the lead for realisation of the American Dream.

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