Future of Global Industrial Development

Large hypersonic passenger plane being designed in E.U.

Major Countries Will Have a Mission: To become a key piece in a "spinal cord" of world management. 

Their Method: International alliances will become increasingly centered on specific long term goals of industrial production and distribution and less on military or ideological needs as was the case in the 20th century.



The essence of 21st century competition is competition in efficient product output and jockeying for position to be the main link in a global state directed heavy industry chain. Countries with highest capacity to mass produce and distribute complex infrastructure related things will be most able to provide structure for planetary unification/governance and acquire popular legitimacy for it. Individuals in relevant capitals of the world will go to great lengths to have their states be as indispensable within this spinal cord as possible. This involves creating links between so called "national champions" and national industrial sectors in general (and thus political units themselves as public sectors increasingly get involved in the long term planning and funding).

For example, elites in Mexico City may realize that the rapidly growing Mexican industrial sector may not take leadership in the northern hemisphere by itself. BUT if they integrate it sufficiently with Canadian and American sectors then their ability to make influential decisions far up the spinal chord gets dramatically increased. Their psychological ego drive to get better and better seats at collective decision making table will thus drive the countries they manage towards merger.

One might argue that this isn't any different from the process that has happened for the last 400 years as various cartels pushed their governments into cooperation/merger, into international or supranational alliances, and occasionally into warfare with each other over surplus production. One might also argue that the post-hegemonic fragmentation into a multipolar world is also a seemingly cyclical typical occurrence. However, the current process of financial and industrial cartels influencing supranational mergers will take place in an environment that differs from a previous multi polar period of the early 20th century. That is since:

1) Dogmatic economic and political ideology in general has been discredited (with decline of the last two major ideological powers: USSR and US)  
2) Nationalism has been discredited in its older forms by technological globalization and by major migratory flows of humans
3) There is tendency towards continental political blocks that build on and improve on the EU model  
4) Warfare between cartels (and thus the governments they control) is prevented by the existence of nuclear weapons
5) World is now in a fragile situation where:
_____a) Due to accelerating technological progress and the Internet, world's rich find it increasingly difficult to maintain/create artificial scarcity (on at least light industry level) to prevent major profit collapse and corresponding social unrest
_____b) Major transnational cooperation is constantly required (on at least continental level) to coordinate fiat money generation and banking-monetary policy in general to prevent major profit collapse and corresponding social unrest
_____c) Capital intensive heavy industrial production (of fission reactors, high speed trains, etc) cannot really be fully managed and funded by individual cartels anymore and requires constant state/tax payer subsidy, support, and assistance
_____d) Ramping up capital intensive heavy industrial production/infrastructure is required to resolve and manage rapid population growth, resource depletion, and environmental degradation. This is needed in order to prevent civil unrest stemming from these 3 key global issues (civil unrest = major profit collapse = civil unrest).

Although the factors that create current cartel driven tendency towards political merging are not always stated this clearly, they nevertheless direct this process for the most part.   

What is apparent is that powerful egos cannot compete in the old ways via violence or in a free for all technologically enabled resource depletion. Financial speculation has also proven as inadequate to provide a long term release valve for psychological competition. The process of elimination leaves world leaders with a rather novel benign (and rather difficult!) way to compete via production and welfare generation for the people they oversee. 

To help visualize what is needed, what is happening, what will increasingly continue to happen, and what needs to be ingrained in global consciousness as needing to happen, think of this example:

[ There are 5 continents in the world with multiple countries each. 4 of these continents have at least 2 strong industrial countries with industrial monopolies that are cozy with their respective governments. Elites of 3-4 of the continents (North and South American companies may merge on this one) decide to create supranational "Japans on steroids" for each specific heavy industry. With state aid and coordination, a beefed up equivalent to European Aeronautic Defense and Space Company (EADS) is created on each continent for energy, high speed rail transport, bridge/tunnel equipment, air/space transport, modular housing, and a few others related to resource extraction to feed the new "continental champions".]

Obviously a far greater amount of state capitalism and state funding/management is required to create these continental champions. This is made palatable to tax payers via sharing half or more of the profits with government treasuries the way Gazprom does. This rapidly builds on, combines, and goes further than European Coal and Steel Community, Euratom, EADS, Gazprom, and others.

The main goal is not only to rapidly streamline and take advantage of economies of scale in heavy industrial production of energy plants, large energy power plants parts, trains, planes, modular housing, and resource extraction/recycling. The main goal is to turn every continent into a supranational factory making 5-6 broad categories of things needed to prevent global social unrest AND to maintain competition, evolution, and diversity of product within global industry. The beauty of this process is that each country can increase or decrease the level of state ownership/(macro socialism or state capitalism however you'd like to call it) as it sees fits while maintaining the country within the industrial chain. Being part of the chain also creates incentives to boost technological, infrastructural, and social development in all spheres to remain part of and embed further into the chain. The incentives to make holistic improvements are greater than those driven by neoliberal emphasis on reform since success and failure is more obvious. The public can easily tell if their country doesn't have what it takes to design and cheaply construct a large part for a next generation transatlantic hypersonic heavy passenger plane. To catch up and enter the chain, the production capabilities of military industrial complexes should be converted to civilian use when possible and utilized to the maximum.

Additional positives of this arrangement is that a lot more capital intensive experimentation can now be allowed due to pulling of resources and supranational tax payer guarantees. Macro Gazprom type build up in production inefficiencies is more than compensated by introduction of new generations of hypersonic aircraft, mass production of MagLev transport and passenger train wagons, fission reactors, etc.

There is also an Orwellian twist to this new global competition (although a positive one). One can see the 6 continents entering into a triangular macro competition where not even 2 beefed up EADS type super companies can ever hope to fully win. Lets be more obvious. Say there is Oceania Rail, Eurasia Rail, and EastAsia rail all developing newer, better, and differentiated MagLev train products (ranging from magnetic heavy loader factory chain carts, to city subway cars, to transcontinental passenger, etc). Triangular competition like this tends to produce simultaneous launches of product by all 3 entities. This has been observed in product ranging from flat screen television to next generation fight airplanes. We see first seeds of what's to come in the Boeing and Airbus rivalry with China working on its own super heavy transcontinental passenger plane.

click to enlarge

If triangular competition reaches total planetary scale then the cost of the new products, time to make them, and time in between each successive generation of product falls. Yes, there will be entire continents filled with monopolies fused into supranational continental monopolies but it is small price to pay for macro level technological progress. New experimental continent scale protectionist policies and competition over guiding/exploiting the development of African Union should prevent any 2 supranational factories from totally overcoming the triangular arrangement. Tripolar world is dramatically more dynamic as elites within each industrial cluster need to always be focused to prevent indirect strategic collusion between 2 rivals while working and competing with each rival indirectly as well. Anybody who played 3 way chess knows this. Some projects like manned mission to Mars may require occasional industrial unipolarity but for the most part the tripolar arrangement described has sufficient economies of scale to really benefit humanity.


CONCLUSION:

To finish off, these days when evaluating the strength of a country one should overlook non-industry sectors within GDP and focus on 1) nominal value of industrial sector as % of GDP and 2) efficiency within this sector.

Industrial Sector By Nominal Dollar Value and Industrial Growth in 2010

China____________$3.3 trillion______(growth of 11%)
United States______$3.3 trillion______(growth of 3.3%)
Japan____________$1.4 trillion______(growth of 15.5%)(highest before quake hit)
Germany_________$862 billion______(growth of 9%)
Brazil____________$677 billion_____(growth of 11.5%)
Russia___________$666 billion______(growth of 8.3%)
UK______________$521 billion_____(growth of 1.9%)
France___________$519 billion______(growth of 3.5%)
India____________$484 billion______(growth of 9.7%)
South Korea______$458 billion______(growth of 12.1%)

Nominal industrial sector of US empire and key satellites____________$7.06 trillion

Nominal industrial sector of BRIC______________________________$5.127 trillion

The world is a lot more balanced now when it comes to making and distributing large physical objects. Increasingly transnational and amoral corporations like General Electric and Siemens can strangely become a source of transnational pride for billions of humans if they merge into a state fused productive arrangement described above.