There are two transitions that might occur in any modern economy. One is from a low productivity to high economy, most often characterized as a shift from low productivity agriculture to higher productivity manufacturing to a yet higher productivity services economy.
The second transition is from a command and control, planned economy to a free-market economy in which all the critical supply and demand questions are answered by private actors pursuing their optimum well-being.
Historically, up until circa 1750, the world was overwhelmingly an agricultural economy under autocratic systems of governance which extended naturally into what amounted to a planned economy.
In the West, 1750-1950 allowed a two century transition from agriculture to manufacturing to services economies. In conjunction, there tended, on average, to be a simultaneous evolution from controlled economies to free market economies. Periods of war were almost always marked by reversions to critical agricultural and manufacturing needs and to planned economies. Productivity would fall, as would inequality. Once war ended, productivity would resume its rise (as would inequality.)
Post-1950, most OECD countries have wrestled with the accelerating rate (and accelerating consequences) of an increasingly productive, but also increasingly services economy. Other than the now familiar issues of affluenza (erosion of social norms, loss of cultural continuity, secularization, increase in deaths of despair, etc.), most countries have also begun to confront the consequences of disparate individual capabilities in the context of increasingly dynamic, evolving and chaotic economic and social conditions.
If you are high in cognitive skills (IQ, memory, articulation, creativity, etc.) AND high in non-cognitive skills (values, behaviors, personality, motivation, etc.), there is no better time to be alive. The scope of opportunities is immense and the rewards are munificent.
Even if you are only strong in cognitive skills OR in non-cognitive skills, the rewards are more than significant. Again, there is no better time to have been alive.
However, if you are low or very low in both cognitive and non-cognitive skills, life is a challenge. If those are your constraints, then you are far better off than in the past, but the gap between you and everyone else is increasingly wide. You just cannot generate the level of productivity which leads to buoyant compensation.
It is still better than in the past because in the past, those with low cognitive skills and low non-cognitive skills ended up dying prematurely through private violence, judicial or extra-judicial executions, or death through conscription.
In the modern environment, in most nations, and virtually all developing nations, private violence is dramatically low in historical terms, as is military death, as are judicial or extra-judicial executions. We have more people surviving with the least capabilities.
There are divisions that arise from moving from an agricultural economy to a services economy and there are divisions which arise from moving from a command-and-control economy to a free-market economy. As the OECD moves to primarily Services Economy and more towards Free-Market economies, those with neither the cognitive or the non-cognitive skills find less and less niches to inhabit. Niches which were much more accommodating in agriculture and in manufacturing.
And no one really has much of a way of addressing that. In the old models where all nations had some strong religious basis, religion often provided some sort of safety net to at least mitigate that issue. But we have secularized and that adaptation is now materially disappeared most places.
It is in this context that Tooze's article has especial value. He doesn't put it this way, but my interpretation is that he is highlighting the double whammy experienced by China in a 30 year window. Everyone else had 250 years to accommodate the move from agriculture to services and had 75-150 years to move from command economies to free-market economies.
China has done both in the past thirty years. Or, at least, to an extent. Nearly half the population still lives and works in the agricultural sector. And the free-market part of their economy was mostly on the export side where China is no longer as competitive nor as respected a trading partner as they were.
Most the OECD has had essentially 250-150 years to coevolve their legal systems, governance practices, social norms, educational expectations, technological infrastructure and cultural norms with the shift from agriculture to services and from economic autocracy to free-markets. Even with those long windows for adjustment, the process can still be rough.
Imagine China. 30 years to incompletely (or even hardly at all) adjust legal systems, governance practices, social norms, educational expectations, technological infrastructure and cultural norms to services and to free-markets (sort of). They have accomplished great things and the best of their best are indeed world class. But the systemic whole is riddled with failures and incompleteness and contradictions.
They have both first world issues - over-urbanization, under-utilization of the nominally educationally credentialed, disengagement from society (lying flat in China), demographic collapse, etc. - while also still shouldering the immense consequences of incomplete transitions from agriculture and narrow use of free-markets.
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