Red Queen Economy v0.0.4


In Through the Looking Glass, the Red Queen advises Alice that to merely stay in place one has to run as fast as you can. To get anywhere, you have to go twice as fast. Welcome to the 1st world's medium term economic future. v 0.0.4

Thomas Barnett's New Rule Sets paradigm has significant implications for the world economy. Shrinking and eliminating the non-integrating gap nations implies that they must end up with significant economic growth and quickly. Given the pool of capital is not likely to increase as rapidly, the unescapable conclusion is that the 1st world will suffer relative capital loss for a time as all those third world pumps are being primed with capital that would have otherwise gone to the 1st world. We enter the world laid out by Lewis Carroll in Through the Looking Glass where the Red Queen runs Alice ragged only to find nothing much changed:

Alice looked round her in great surprise. `Why, I do believe
we've been under this tree the whole time! Everything's just as
it was!'

`Of course it is,' said the Queen, `what would you have it?'

`Well, in OUR country,' said Alice, still panting a little,
`you'd generally get to somewhere else--if you ran very fast
for a long time, as we've been doing.'

`A slow sort of country!' said the Queen. `Now, HERE, you see,
it takes all the running YOU can do, to keep in the same place.
If you want to get somewhere else, you must run at least twice as
fast as that!''

In the real life world of a Red Queen economy, we produce more and more capital but find a great deal of it shifting out of country to other lands, leaving us, if not standing still, certainly progressing much slower than we might have expected under an older regime. For a great many people, this will not be a happy economic situation. For those who do not earn anything from capital, their labor will constantly be devaluing. They're going to have to constantly improve in order to run in place. The short run bright side will be limited to those who are in the capital markets who will profit from those Gap capital inflows. As a country, the process is likely to help us on the national security front a great deal more than an even greater amount of foreign aid and we get the bonus of lower international graft levels and less government waste.

The long run consequence of our going into a Red Queen economy is that, eventually, the pumps are primed for self-sustainable growth all over the Gap and all over the world people are living their lives to their full economic potential in a truly integrated global economic system. When it arrives, poverty will only be relative, a failure to keep up with the neighbors. The kind of grinding, degrading poverty that robs lives and leaves talent useless for lack of opportunity will be gone from the world. That, in the end, is our best hope for avoiding catastrophe as the ability to cause mass destruction costs less and less and is available to more and smaller groups of people.

Unfortunately, most people aren't currently making the connection. Glenn Reynolds has noted that outsourcing is likely to be an election issue but doesn't connect up to the national security issue. If Barnett is right and, more importantly, if Barnett is truly being listened to in the White House, opponents of outsourcing (a manifestation of the Red Queen economy) are likely walking into a buzz saw.

Posted: Sat - October 4, 2003 at 11:42 AM        

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