Move over Ford, here comes Bill and Jeff
America today appears to be divided between the Biden and the Trump camps; between Social Democracy and Republicanism. But don’t be fooled. Look deeper.
It is true that the American Civil War (1861–1865) was fought by the Confederacy of the South and the Industralizing North. In reality, however, there was a deep economic foundation of this war.
From Cotton and Slavery to Industrialization
The War was about maintaining the production and export (to England) of cotton with slave labor from Southern plantations, and the import of luxury goods and everything else needed for the ‘good life’ from England. The Northern states were moving rapidly ahead with industrialization — a process that would make salve labor virtually redundant.
To achieve industrialization, it was necessary to place tariffs on English goods, to ‘protect’ the infant Northern industries. Of course, tariffs would make the ‘good life’ in the South very expensive and untenable. So, the South fought ‘tooth and nail’ to maintain their privileges.
The success of the Northern Sates resulted in the unification of America and the abolition of Slavery.
Long after the Civil War, America is at another Crossroad
Now, today, more 150 years after the American Civil War 1861–1865, America is at another cross road. Move over Ford, here comes Bill Gates and Jeff Besos. Freeman and Perez (1986) posit that there are five Schumpeterian ‘long waves’ of development, that last 50–60 years.
Five Long Waves of Development
At the time of the American Civil War, the world was in the first long wave of Early Mechanization (1770s to 1840s) where the chief raw material was cotton and driven by Britain. Early Mechanisation was followed by Steam Power and Railways (1830s to 1890s), driven by coal, with Britain still in the lead. The Steam Power and Railway wave was followed by the Electrical and Heavy Engineering Long Wave (1880s to 1940s), fueled by steel and driven by Germany. This Long Wave was followed by Fordist Mass Production that was fueled by Oil and driven by the USA. Today, we are in the fifth Schumpeterian long wave (1940s to 2050s?) that is driven by information and Communication Technologies (ICT) with Japan starting off in pole position, with the USA rapidly taking over.
Is America Ready for the Sixth wave?
It appears that we are already in a Sixth Long Wave, driven by Artificial Intelligence, Machine Learning, Robotics 3D printing; gene editing. And China is winning (Lee Kai Fu, AI Superpowers, 2019). To win the race for AI (which America already is already lagging behind), one cannot compete with cheap, unskilled labour; with physical strength; or with raw materials of oil and natural gas.
Digitalization vs Oil and Extraction
We need to begin to realise that just like the American Civil War was about cotton vs industrialization; the current War in America is about the old vs the new; Digitalisation vs raw materials dependency.
Look carefully. The states and the persons that voted for the old (Trump) regime are those that generally depend on the old (oil, gas, petrochemicals and extractive industries, cheap unskilled and prison labour, environmental destruction, tanks, aircrafts, ammunition and warfare). And more than likely, those that voted for the new (Biden) regime tend to be more educated, more intelligent, more technology savvy, digitally-driven, environmentally-friendly, equity and inclusivity-oriented. Think about it.
This raises two important questions:
1. Can Biden turn the tide and return America to world Leadership?
2. Does it really make sense having tons of able-bodied black Americans in jail, uneducated, un and under-employed? What a total waste of the most valuable resource of today — human beings and talent!
Note: Dr. Auliana Poon is an economist, born in the Caribbean island of Trinidad & Tobago, of Chinese, Indian, African and European heritage. She read political science at the University of the West Indies and holds a Doctorate in Technology and Tourism from the University of Sussex, England. Auliana is passionate about changing the world, one mind at a time. She shares her time between Berlin, Trinidad and Tobago.