We need to rethink how we view the world economy. The huge gap between European and Asian salaries is reducing at top speed, and in some places it is now no more than a small ditch – in several areas of China, the minimum salary is now the same as in Romania and Bulgaria. . . .
. . . . Almost a century ago the US entered a self-perpetuating cycle whereby salary hikes encouraged consumer demand following Henry Ford’s decision, in 1914, to double the pay of his workers. Europe followed suit after World War II more than 50 years ago — and now it is Asia’s turn. The initial situation is the same; an industrial revolution that has provoked massive increases in productivity. . . .
. . . . For Europeans and Americans, Asia’s Fordist swing is both good and bad news. Good news, because external pressures on salaries, often crippling, will significantly decrease. Bad news, because Fordist Asia will become more and more self-sustained. However, it would be foolish to expect the majority of growth in Europe and America to come from Asia’s new forces of Fordism. Which brings us to a crucial question: how can we continue to increase productivity on a planet whose natural resources are getting scarcer and scarcer?
Aye, that is the rub.