I think one of humankind's biggest weaknesses is its refusal to learn from the past. This refusal is seen in every society, country or region on this planet.
Globalization has made the world a much smaller place, with each economy closely intertwined to the next, and has resulted in a world where the vast majority of the wealth is concentrated in the hands of a few. Till last decade, the equation was fairly straight forward. The developed world controlled the resources and was home to the corporations that sell us most of the things we buy while the third world provided the resources and the labour to produce the goods and services consumed.
In the past 20-30 years, such has the dependence of the third world grown on the consumption of the first world that even a slight downturn in a capitalist market could result in substantial upheaval in the third world. In the past two decades, we have been presented with numerous examples of economies that followed the consumption driven path prescribed by the World Bank and fell to their knees. Argentina, Mexico, South East Asia all faced massive economic shocks when their markets in the first world stopped consuming their goods. I have no doubt that India, China and Brazil are fast heading there.
This refusal to learn from the past comes perhaps not from pride as much as man's greed. The glorious 1990s and the early 2000s when the global economy was booming, consumption was rising, production was rising, salaries were rising, employment was rising, mergers and acquisitions were the order of the day, is now a faint hum of a train engine that has long left the station. What's left now is uncertainty, and a massive global effort to stop economies from tanking.
How has it come to this? Greed. We want more, we consume more, we all want a bigger car, a faster gadget, and shop till we drop. Everybody wants quick money, and the early 2000s epitomized this, when unscrupulous banks and financial institutions were selling a giant ponzi scheme of toxic derivatives of derivatives of derivatives, all resting on a strong belief that real estate, the real hard asset at the bottom of it all would remain a precious commodity.
So across Europe, the US, and the developed economies that are closely linked to these two economies produced, sold, splurged, and then it all came crashing down. People were unable to pay their debts of various kinds, jobs were lost, consumption was hit, and institutions that had been standing for decades fell in an instant, and the governments were left to figure out how to keep it from crashing in a giant fireball.
The third world that had been producing the goods and services that the first world had been consuming is still shaken up, but is now focusing on increasing its own consumption base to allow for those mills to continue churning the products and services for consumption. It is exactly as Engels (or was it Marx?) who said that capitalism will always need to continue growing in order to survive. This is exactly the pattern followed by corporations since decades - search for new markets, search for new products, search for new sources for raw material, and the constant pressure of bottom line growth defining their actions.
So as the third world now begins to look inwards, it seems to be going through the same cycle of growth that brought a large part of the first world to its knees. Looking at the way India, China, and other nations are evolving, I really do believe that this is the only way that nations have grown, and where Japan was 60 years ago, or the United States 100 years ago, that's where the BRICS, and many other developing nations, seem to be standing. There is constant chaos, a constant churn, and a really really ambitious set of people who are driven to make it big.
So in India we seem to be going through the same phase. There is no dearth of entrepreneurs who are willing to turn crook if they can make more money, the laws and regulations are 20 years behind times, crony capitalism is the order of the day, real estate is unaffordable to a vast majority of Indian families, infrastructure is creaking, and yet the consumption levels are racing up like there is no tomorrow.
Today's Indians are saving less and spending much more than our previous generations and I very strongly believe that this growing inequality in the country is going to come to its head sooner than later.
So I am sure that in this connected world, urban Indians are taking on more debt and saving less knowing fully well that this gratuitous consumption is what caused the developed giants to falter. But as the Indians and Chinese are saying, why can't I manufacture more, why should I have to follow environmental rules, why should my citizens have to curb their consumption, and similar questions. They know what debt can do, they know consumption without replenishment is unsustainable, but hey, everybody wants a piece of the action, whatever happens, we'll see later.
So I do see this circle repeating itself. Its time for the developing world to consume, and grow more unequal, and go through the same cycle of capitalism that nations before them have gone, and committing the same mistakes that have brought them down, but really, its like a drug, you just can't stop! Eventually, with our polluted waters, depleted forests, and smog filled cities, we will perhaps pause to take stock of the situation. Till then, lets hit the pedal.
