One of the more interesting adventures my family business got itself into was my brother’s two attempts to sell our pile driving equipment to an Indian shipyard. As he cruised the streets of Mumbai in the early 1980’s, he inhaled the fumes of the Tata manufactured trucks, which were cleverly aimed at the level of an automobile window. Back home in Houston sat his E-type Jaguar; sometimes it ran and sometimes it didn’t.
Had he not left this world in such an untimely way, he would have seen the current spectacle of Tata, India’s leading manufacturer of vehicles of all kinds (including the US$2,500 car) is looking to purchase Jaguar and Land Rover, formerly part of British Leyland, from struggling Ford. Ford itself has just been surpassed by Toyota as the #2 company in automobile sales in the U.S. It’s hard to avoid the conclusion that Tata and its Chinese counterparts aren’t far behind.
But there’s more to this, as Martin Hutchinson points out:
From the summary above, it is pretty clear that income levels in the West are converging with those in the more competently run emerging markets. The bad news is that in the years ahead this is likely to happen through an absolute decline in Western living standards. The populations of India and China greatly exceed those of all the rich countries put together. Further, as discussed above, the greater part of Western economies is vulnerable to low-wage competition. Thus the economic histories of a high proportion of the Western population under 30, except the very highly skilled, will involve repeated bouts of unemployment, with job changes involving not a move to higher living standards but an angry acceptance of lower ones. By 2030, it is possible that the median real income in the United States and Western Europe may be no more than 50-60% of its level today.
That fear–more visceral than vocalised–is a lot of what’s driving Mike Huckabee’s campaign, and the illegal immigration debate. But even without illegal immigration, a levelling of the world’s income levels is unavoidable.
As we used to say in Palm Beach, ta ta…