Optimism is on the move—with important consequences for both the hopeful and the hopeless

Whatever be the oppressive burden of adversity and appalling conditions, the human predicament has always contained an element of hope, a craving for improvement, and always sought new frontiers of possibility, yet the kind of redistribution of hope, from west to east, being witnessed today at the global level seems short termed, and soon it would be overshadowed by a certain sense of gloom, and helplessness, for this hope is essentially resting on the material prosperity only, originating from the ill-conceived economic globalisation project, that seems to have gone awry now in the absence of any level-playing field or putting global regulatory mechanism in place. Thus despite a shift in economic activity from west to east and resulting redistribution of prosperity, the structural problems of world economy accompanied by the global imbalances would continue to scare away the prospects of lasting hope.

When most Indians don't get enough to eat, lack clean water or toilet facilities, and hundreds of millions are illiterate, talking of hope is a cruel joke.

Hope and change go together.

True hope is the awareness that, while the past is what it is, you can change the future. Alas, there is very little of such hope to be found in the developed countries these days. All of them are ruled by a post-war generation who took it for granted, that their future was provided for. Their parents, emerging from the war, took it upon themselves to create a better future for their children. And there was hope, for sure. And there was exuberance.

Problems started to emerge later.

The new generation had fewer children, longer lives and the desire to keep their living standards at the same level even after they retired - having seen their parents being able to do just that, but ignoring the huge effort put into building up a society that could actually provide such a thing.

The effort included education, public services and public buildings paid for by taxes and an agreement to pay wages roughly in line with peoples needs and their contribution to a company. And it was a worthy effort, as it repaid itself fairly quickly and created a generation of highly educated people, who could use their wages and the public infrastructure to actually use their knowledge to contribute to society.

But greed led to a different perception.

Forgetting about what they received from society in the past, they demanded taxes to be lowered, so they could receive what they thought was "adequate" payment for their work. They also forgot about Henry Ford's old adage that "cars don't buy cars" and lowered wages to increase their profits even further. Soon enough, this created problems for a society that was once build upon public contributions and wages rising *along* with the growth of the economy and society at large.

Education, though perhaps not worse than before, failed to keep up with the rapid advances of technology. The ramifications are inevitable. Any future advances in technology and science need efforts *in the past* to educate the current generation of children. We are, after all, standing on the shoulders of giants. Woe to the society whose giants refuse to let the others climb them.

For healthcare it is the same. It was once unthinkable not to treat patients at the cutting edge of knowledge. But these days, the Western club knows only three kinds of countries. Those who withhold treatment from large parts of the society (namely the USA), those who limit treatment for an even larger part of society to provide cutting edge treatments for the rest and finally, those who plan to do the same. All this is exacerbated by the amoral (and successful) strife of medical and pharmaceutical corporations to make as large a profit as they can, ignoring their true purpose of keeping society healthy. Which is another of those preconditions required for the advancement of society.

To top it all off, the richest strata of the old generations demand pensions sufficient to keep up living standards, artificially inflated by not paying the taxes and wages necessary to contribute to building up a future for further generations.

Those demands already have dire consequences in the form of even further cuts in education and healthcare, which will only make sure that future generation will be even less able, though their health and education, to contribute to both, building up a new world for their offspring *and* providing for the old.

If this sounds like there is little hope for any improvements in the coming decades, that's because there is indeed very little hope to go around these days, in the western world.

In India you will get 9% growth. Growth brings jobs and yesterday the Chinese Premier with a 400 string business entourage. That's the good news (lets not ignore the 4 gleaming new airports).

Just be prepared to accept a poor quality of life. Urban chaos, crowded public transport, soot and grime covered cities, filthy railway stations, bad roads, beggars at every traffic signal, non existent public conveniences (toilets), water shortages, unhygienic restaurants with slum dwellers working the kitchens, horrific noise pollution in cities....With rapid urbanisation and a lack of any tangible urbanisation plans (to quote Mckinsey) the 1.2 billion population will take a long while to organise itself into a liveable country. Till then it will continue to be a case of applying band aid to mend a gaping wound.

and yet, life is still much better in the west, and no one can seriously claim it would change in the next 50 years.

"But the rising number of Indians, Chinese and Brazilians who can afford to buy their products and services will help their companies prosper."
And herein lies the text between the lines, because Americans are increasingly realizing that just because their companies prosper does not mean that they or their children will, as has been the social contract in the past. Witness State Street, posting record profits and out of the other side of its mouth announcing layoffs (one example of many). The growth index is not what is injuring American optimism (I'll doubt that outside this readership 1 American in 10 could tell you what the growth forcast for 2011 is), it is unparalleled greed and concentration of wealth within our own country, and a willingness for our own companies to sell fellow Americans down the river for a few more short-term pieces of silver at the cost of long term prosperity.

Good article but a little bit too much optimistic.
Let's not forget global warming worries plus a possible cold war between the US and China; two of the biggest topics of this century.

This is a shift that I predicted would begin to happen when the global economic crisis began. Americans are being forced to redefine their values and their dreams based on reality instead of some idealized and unsustainable paradigm.

Is it really such a bad thing? Not at all. When the focus comes off of the United States as superpower, world policeman, and economic immortal, the world will not fall apart. Redefinition of importance and redistribution of hope gives me hope that someday the world might be a little more equal.

Hope is the best thing... Appreciate the effort of the author...

tp1024 provides a good narrative on how we got where we are. But it is not obvious why it follows that there is no hope for a better future now. Is there reason to believe that the current generation cannot learn to put greed in its proper place?

What defines a rich nation is(paradoxically) that it has a huge middle class. In this simple view, yes, China India and Brazil are heading towards the 1st world(it was about time). But there are herculean tasks in the way. Improving education and infrastructure for instance.

One risk for the already developed world is to let its middle class to shrink too much. Those nations should try to preserve their status as first world by focusing more on keeping and preserving a strong middle class.

We haven't had a major war since 1945. The threat of global thermonuclear war seems remote. Pax Americana has provided most of the world with the chance to grow and prosper, just as Pax Brittania spread European culture and ideas for 100 years from 1815 to 1914. Pax Americana is waning only because so many non-Americans have learned to prosper like Americans. World population growth is slowing, and may reverse by 2060. A lot of the world is free to do and say as they wish, and another big fraction has gained a measure of economic freedom, even as political freedom is limited.

So there are many measures by which progress is tangible, and hope is justified. Even when we narrowly focus on the plateauing of median American family incomes, there is still much to be satisfied with. The path that led to prosperity for Americans from 1945 through 1970 petered out, as all such movements must. The rest of the world has followed (or is following) to join us at that plateau. The next jump to a new level of prosperity is unlikely to occur until most of the rest of the world has caught up.

There is every reason to hope that the next 20-30 years will be a period of peaceful consolidation of the adoption of the American model of capitalism throughout the world. Education and personal communications technology, along with entrepreneurial capitalism, all grant power to individuals rather than governments. Will we see a rich global elite sorounded by billions of relatively poor workers? Yes, but the workers will be on that same plateau Americans have found themselves since 1970, and that's a pretty nice plateau.

If takes a special set of circumstances and some genuinely new ideas to be the first group to rapidly climb to a new economic level, as America did 1945-1970. The great majority who have made that climb started poor and played catch-up. It is much more pleasent (if less heroic) to have your parents make that climb and be born already well off. Americans and Europeans should not complain too much that we were born too rich to ever see high growth, and try to deal with our relatively small problems.

The developing world has slept for so long, that almost any new direction is applauded and should lead to a better life for their people. It is easy to build universities, when you have none (or few) and no (public) social support. Eventually these economies will be in the same position as us as they follow the effects of human nature (eat today, forget tomorrow).

In the developed world, all our politicians well know the problems of underinvestment and simply choose to ignore them. We choose to ignore it too. Hopefully the people in the developing world will elect responsible politicians and learn from our, well I guess you can call them mistakes even when purposeful. Only time will tell.

Globalization is a wonderful thing for mankind as it lifts many more than it drags down.

jouris:

I didn't say there is no hope, but there is very little. This not at all true in the developing countries, especially China. There the plan really is to build up everything it takes to give the coming generation a decent chance, not just to catch up with the rest of the world, but to build a place that has a future.

Meanwhile, in the west, there is little more than glimmers of hope. Where are the necessary calls to cut down the ubiquitous tax-breaks for businesses and high-income individuals? The US, to be sure, just extended a whole set of them. Where are increases of corporate taxes? Corporations once again make multibillion profits, but the public is left behind.

Iceland alone - a tiny nation among the giants - defied the logic of bailing out banks with public money to ensure a continuing stream of private profits. It was committed to the laws and let failed corporations go bankrupt, instead of rewarding their greed by taking up loans and shoving the money directly into a cavity best left unsaid.

The general principle for building a future is the same today as it has been in the past. Sit down and think about what it takes for you to be able to contribute to society. Now go ahead and make sure that those things are available in the future. Among those things are healthcare, education and decent wages.

Hope is what is left when all else have failed. it is for cancer patients and failed states. No one hopes for the sun to come up tomorrow, because it will come up tomorrow. If the leadership ground on solid social-economic policies instead of vague emotions, perhaps real change can happen.

Otherwise, in 2012, Palin should perhaps on campaigning on the word "happy"

"For most of its history America has kept its promise to give its citizens a good chance of living better than their parents."

That wasn't America's promise. America's promise was that its citizens would be freer from government interference than they would be elsewhere. If you had an idea, you could build it here without the government getting in your way. And if you made it big, you could keep what you made. That created great prosperity, but the prosperity was a side effect. Lots of people came here for political (or even religious) freedom, rather than economic opportunity.

Last month, there was a great analysis of American optimism and pessimism.

http://gcontente.blogspot.com/2010/11/america-from-paralysis-to-optimist...

"Americans and Europeans should not complain too much that we were born too rich to ever see high growth, and try to deal with our relatively small problems."

I don't doubt that we could do so, but only doubt that we will do so.

Nicely put. Although you could have stressed a bit more, as to how the whole humanity is getting blessed with this. Millions are getting out of hunger. Millions more have now clothes to wear, or have a roof atop their heads.

The world is headed in the right direction, everyone can agree on that, unless you're a western white supremist....and just want to see the west boss around the poor. A better, multi polar world would probably prevent another Iraq from happening.

Remember, Economist, not everything is black and white. If anything needs to change it's this idea that we can somehow lump together the developed world with Western-European origins as a monolithic "West" and everyone else as "the Rest".

Just as the emerging markets differ completely in terms of their economic scales and their effect on the world (China's economy is now larger than that of India, Brazil, and Russia combined, so much for BRIC), the West is not home to homogeneous emotions, interests, and strategies. The outlook on life of the average Greek is bound to be different than his counterpart in Australia.

I would say that Europe has taken the brunt of the malaise from the Recession, and recovery in countries like Greece, Spain, potentially Ireland seem to be very distant. Indeed, the prospects for these countries do not look bright for the near future. However, if we look at countries like Canada, Australia, and New Zealand, who cruised through the recession without much structural damage to their respective economies, we are seeing a kind of divergence. Most people in these countries remain optimistic, so long as you do not lump them together with the southern European countries as part of a greater "declining West".

The 21st century is not the Asian century, but a global century. Western nations who are able to manage their global connections and craft their economies around globalization will win. Human capital is incredibly important - absorb immigrants and use the diaspora to bring wealth to both their countries of origin and their adopted homeland.

The Canadian model of absorbing immigrants into the skilled workforce with minimal turnaround time, and a general air of tolerance towards people of different creeds, ethnicities, and backgrounds will strengthen the fundamentals of the Canadian economy. I don't know if this cultural tolerance can be manufactured quite the same way anywhere else, save maybe Aus and NZ. On the supply side, millions and millions of young, aspiring Indians and Chinese would still prefer to study and work abroad, eventually settling down in countries such as Canada, Australia, and of course, the United States. These people can become the engines of growth for developed economies.

(Don't forget that Ghana and Mauritius are also doing extremely well!)

In the 21st Century, everyone can prosper.