63 years of world GDP shares
I resume the topic of the previous post and keep the promise I made to extend the time horizon backwards:
To do this, I went to the World Bank website. To be precise, I warn you that the BRICS series has a break in 1988, because data on Russian GDP in dollars is not available before that year. The reason is that in communist countries up until the early 1990s a different national accounting system was used, the Material Product System , which placed the emphasis on physical production, neglecting the added value of services. In short, it was a GDP a bit like the " degrowthists " imagine it, which we dealt with here at the time in a post on whose foresight we will soon have to talk about. The necessary factual elements or the political will to reconstruct the historical series with the new criterion (the SNA ) were not available in all countries, and therefore before 1988 in the GDP of the BRICS Russia was zero. However, I would like to point out that in 1988 the Russian GDP was only 2.9% of the world GDP and the discontinuity in question in the graph can only be seen by an expert and educated eye. Let us therefore say that the picture I offer you of the "semi-secular" dynamics of world GDP shares is sufficiently accurate.
To help you read it, I propose that you break the period into three sub-periods, which I have chosen by referring to the history of our tormented country: from the beginning to the Treasury-Bank of Italy divorce (1981), from the Treasury-Bank of Italy divorce in Maastricht (1992), from Maastricht to today. Clarification: these cut-off points are far from extemporaneous and have a meaning that is not only local. In 1981 or so, in our opinion , but also in their opinion , the third globalization begins (then there are the good "leftists" who categorize it in a different way , but we know that they also do it to hide the evidence of their complicity with "ugly neoliberalism"…). It is therefore a temporal threshold that has a systemic meaning. Also 1981 is also the year of the Volcker shock , the raising of the interest rate with which the USA tried to tame inflation and ensure the supremacy of the dollar. The combination of two of these three events (forcing the Government to finance itself on the market and the sudden rise in market rates) caused the disastrous explosion of our public debt, which still affects us today, as he explained to us Vladimiro at #goofy10 . So 1981 is a very significant date for us, but in direct connection with events of global significance and scope.
1992 is the beginning of the wonderful European dream, and this is enough to confirm its systemic importance.
The result is in this handy mirror that I leave to your comments:
I limit myself to observing that if we zoom out to 1960, the country that has remained more or less where it was is not the United States but Japan (and even more so the miscellany of "other countries"), with an increase in its share on world GDP equal to 1.0%. Conversely, if we enlarge the sample, we find that since 1960 the United States has lost more ground than the Eurozone, and this is because the Eurozone, before the Euro, i.e. until 1992, had gained ground (despite the "national currencies", er public debt, er terrorism, er amoral familism, the non-scalable tobacconist, and the whole repertoire of nonsense of those who consider their revered opinions facts).
These considerations are obviously ancillary to the theme of the validity and effects of a "single currency of the BRICS", to which we will return more calmly.
I only point out that one of the more or less involuntary consequences of the green revolution is our deindustrialization for the benefit of the Chinese production system. What began as Germany's extreme effort to reconvert its production system, with the attached obligation for its European brothers to buy its electric cars, is increasingly becoming a suicide for all of Europe, including Germany, with negligible environmental benefits in terms of reducing emissions (even taking the leap of faith that the C-molecule is the cause of all evil). The same cinema as when they made us go from red to green (1985), then from green to diesel, and now from diesel to electric. But this time the game is dangerous: the inner impulse for beggar-thy-neighbor policies threatens to backfire on Germany, and this is not good for us. In about ten years we will find ourselves with a nice -10% (if all goes well) compared to 1960, and the BRICS with a nice +26%. Single currency (of the BRICS) or not. The reason, I think you know, is that the fine Alemannic strategists have not bothered to make sure they have a minimum of control over the production chains of green raw materials.
After all, you know, brave are brave, but logistics hasn't always been their strong suit .
This is a machine translation of a post (in Italian) written by Alberto Bagnai and published on Goofynomics at the URL https://goofynomics.blogspot.com/2023/08/63-anni-di-quote-del-pil-mondiale.html on Wed, 23 Aug 2023 15:18:00 +0000. Some rights reserved under CC BY-NC-ND 3.0 license.