Resources, industrial transformation and the structure of the world economy

1. Introduction In the neglected Haynes Lectures of 1964 (published as Postwar Economic Growth: Four Lectures), Simon Kuznets summarized some of the emerging results of his monumental work on Modern Economic Growth (MEG) and used them to speculate on diversity, interdependence, war, conflict and cooperation among nations. It was an unusual Kuznets study – speculative rather than precise and quantitative. The tone and the approach clearly reflect the horrors of World War II and the palpable threats of oppression and aggression of communist totalitarianism. Modern Economic Growth, the epoch characterized by a widespread application of science-based technology to production dating back to the late eighteenth century, resulted in a sustained increase in income, population and productivity and in widespread structural changes. However, it was also the case that most of mankind had not yet tapped the potential of economic growth provided by modern technology – even though the per capita product of most was probably higher already than it had been in the nineteenth and early twentieth centuries. No one was more appreciative than Kuznets of the benefits brought about by MEG but he was also keenly aware of its potential for conflict and destruction. In these essays he appears cautiously pessimistic reflecting on the threat of communism to world peace and stability and on the limited spread of the process of Modern Economic Growth with the resulting increased divide among rich and poor nations. In this chapter I summarize some of Kuznets' arguments in his 1964 lectures and then update the analysis, taking into account the changes in the geopolitical environment over the past fifty years, primarily the end of the Cold War, the spread of globalization, and the rise of China and other Asian economies. In a final section I review various projections of expected changes in the global economy to 2050 and the main challenges such changes pose for conflict and cooperation.