But what is interesting is that in 1820 China accounted for 33% and India for 16% of the world economy. USA's contribution then was a minuscule 2%.
World GDP Break Up in 1820
World GDP Break Up in 2007
If you look at the European nations their GDP has remained almost constant as a share of the world GDP. Similarly others have remained fairly constant with the exception of Japan.
What contributed to the rise of USA and the fall of India and China. What has resulted in this shift of economic power from Asia to the USA in these 200 years?
In 1820s the world economy was mostly agrarian. Indian and Chinese economies then were mostly driven by farming.
In 2008 the world economy is powered by technology. The US is at the forefront of a lot of the technological progress made by humankind.
What do you think are the reasons for this major change from 1820 to today?
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27 comments:
it has been around 200 years i guess since U.S. was formed and india is just around 60 years old. its as simple as that
I suppose that an exhaustive and detailed response to this question would require a book or rather, several. It seems to me however that America enjoyed a number of unique historical advantages during this period that facilitated its meteoric rise. Capitalism is a system that must grow in order to survive. When it ceases to grow it implodes. America was capable of seemingly endless growth in every sense throughout this period and as a consequence it almost inevitably became the powerhouse of the world capitalist economy. It was able to draw upon Europe and Asia for a constant source of cheap labour. It was able to expand its land mass westward throughout much of this period without major military opposition. It was able to find and exploit new mineral and technological resources in these newly occupied territories. Once its major political divisions were resolved in the Civil War it very quickly surpassed Britain in terms of GDP ( in 1890 I believe ) and set the stage for its current economic hegemony.
Probably because the U.S.A. crushes everyone who stands in their way. Big business runs America.
If the United States isn't careful and fortunate it could change in the other direction, though not necessarily all the way. Even though the current USA government is older than the current Indian government, India has had a large population for a much longer time, and the United States has benefited in the short term economically by things such as destructive logging. Also, India didn't harness the benefits of free enterprise until more recently.
India and China are old civilizations and therefore it takes a lot to move them in new directions. US started (almost) with a blank slate and could choose to move as quickly as it wanted. Luckily, they chose an economic paradigm and a system of governance that is conducive to rapid growth. Personal enterprise works better in the short term when it is unfettered as opposed to being tied down by social norms. Besides, US has traditionally being a country of young people, although this has now changed.
Of course, now the US as a country is maturing and the growth will slow down while India and China are building on the momentum that has been gathering steam for some time.
The Developing Nations have always a higher growth rate and When the Western nations were developing they were busy colonizing the rest of the World while China and India are growing purely through their own worth and might.
I just wanted to add this to mix:
http://www.ted.com/index.php/talks/hans_rosling_shows_the_best_stats_you_ve_ever_seen.html
@Ms. O. D.
your link again
I am too much of a non technical and naive person to give an opinion on such a topic, but one thing I always believed and still do is whatever the technology..but production of anything brings prosperity and advancement( though today US doesnt produce much of anything, but being cash rich brings everything from outside), ours being agriculture oriented country, we neglected the core industry.If again we give omportance and bring new technology in farming and all that, will bring a change.
L. V.
Good thought provoking question. I like your graphical statistical approach not to mention your general web and blog layout. My own blog focus could benefit from some posts on the subject generally. http://conversations-on-innovations.blogspot.com - However I feel obliged to progress from my illustrious compatriot's work -Adam Smith's "The Wealth of Nations". I do hope I am not alone in this..? Cheers
Nice thoughtful blog post.
Interestingly every nation has its ups and downs. India and China were flourishing progressing and been attracting west in early days. In fact historical invasions from Sikander, Mongols, British and other colonists prove that fact. These nations, especially India, has been great to show compassion and has absorbed those invaders as a part of its country. Then came shift of economy and power after world war I & II.
World wars brought forth United States of America to the front of the world. The tough geography and different time zones with difficult weather. Sturdy people and their continuous hard work. These people were lead by innovative motivated leaders to industrial and technological growth. The cold war between USSR and USA had helped to make progress on Defense front. The scientific and technological progress from Defense department has been brought forth to common lives through industrialization and privatization of businesses. All these lead to progress and growth of economy.
But watch out there is shift of power and economy has started happening. China is rising as super power.
Ultimately the progress, economy and power is like different seasons. After summer comes winter and followed by winter and summer again.
you have ultimate collection of article
US contributed 25% so this effect very strong
What will be interesting to note is that post the current financial turmoil where does the PWC & Goldman Sachs report stack up on the prediction of GDP of BRIC countries overtaking the GDP of Japan, UK, US?
Any link to the "new scenario"
Thanks
BuA
The transportation of food has made agrarian economies near worthless on a world market - America as with Britain and many other countries has all but stopped producing anything themselves. I once worked for Philips who moved all their factories to Poland because labour was cheaper. Now that the US car companies have gone bust I wouldn't be surprised if they don't end up shipping out jobs too.
nice article.
I read a similar article at Wikipedia some time back.
Colonisation was a reason too for the fall of India
Yes you are right- Technology is most certainly the driver of modern civilisation. Human civilisation has passed through the agricultural, industrial and is now in the information era. India missed out on the industrial revolution completely until 1947 due to the British, and till much later due to our policies. An acre of land can support probably one family through agriculture but a modern factory on one acre can support probably 100 families.
Not only this, it is all about converting natural resources to forms, shapes that are considered valuable to humans - technology exploits natural resources much faster and better. I do believe these are some of the reasons for our being left behind. What do you think? A very thought provoking set of statistics and article. Would love to hear your views, besides conducting research on my own.
I do believe that if the technology will be the key to a success of a country, it will be clear future for India and China in later year, because they are massive. They are starting to occupy the world in terms of numbers, and they are learning. Like that they starting to explore English language, and they are becoming competitive, some of what I see is the IT industry, where Indians are getting more into it.
Since we are talking technology here, see the latest news and technology here @ http://topfothebest.blogspot.com
There are a couple of reasons:
1. The British in India.
2. Industrial Revolution nevered happened in India.
3. What goes up, has to come down :)
3 simple reasons..... :)
You put a lot of work into this post and it is quite informative. Great blog!
Very interesting read!
I created a link to Internations..))
kindest
hans
Strange but not surprising....We Indians were under the control of Europeans for about 200 years...When we got Independence in 1947,we were about to take the first step,but the Europeans had already crossed half the way with the invention of atom bomb and were greatly advanced as compared to India in 1947.It will take a lot of effort and time to bridge the technology gap between the Indians and the Europeans.
The American Idol shows that have entered the 8th season this year has got nothing to do with technology except for votes. But from what i have experienced travelling around Asia, the americans have a way of expressing themselves using mass media as a means of broadcasting them. The unifying universal language is simply English. India and China are unified in the language of their own which the rest of the world do not all know of. Translation between cultures also take time.
Let me try to look at it from a different angle. The number one reason is the industrial revolution that marked the end of the agricultural economies as one commentator said but everybody had the chance to get/catch it and use it. That did not happen. I attribute the growth of US to innovative people in a market economy. You could as well argue that every country had its share of innovative people and you would be right. But not all of them fostered and cherished innovation, creativity as US did. I still see in schools children are punished because they think differently or businesses are stopped or slowed down by the society (not only the government) because of not being mainstream.
US had a really unique position. It was composed of people and communities that literally hated oppression and/or authority. If you look at the demographics of 17th and 18th century, most of the immigrants had taken refuge in the US because of oppression (mostly religious). From then on, it had attracted smart, bright and innovative people from all over the world. Combined with a free market economy and a least obstructive government, USA have seen an unprecedented growth.
This is an article on which I write and think about often. The answer is innovation. The Indian society started stagnating say after 1780 onwards, I am choosing this year as it was just around this time that India had an empire in the position of pre-eminence for the last time before the british came along ofcourse. After the maratha hegemony ended (Mughals were already reduced to a position of non-existence by then). After that the Indian nation went into a period analogous to the European dark ages.
The Indian society still has not developed a science culture so to say, A science culture alone can fuel innovation. Right now, the motivation for a number of guys to do technology(I'll not say science, basic sciences in India is in a pathetic state) is money, not the love of it. How would love come anyway? I am not saying money can't drive innovation. But FUNDAMENTAL work can not be driven by solely money.
Anyway i think it is a topic on which a number books can be written for a complete explanation.
Very thought-provoking and well-written. I can see you have given a lot of attention to these matters.
wow thats some very interesting information. i would have to agree with most people here, the US advancements in technology really helped it rise in GDP. This plus the US's wide political influence has helped it rise in GDP
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