“The well-being of the West rests on its ability to borrow money”: Alexei Zubets – on what Western capitalism is doing

And who is to blame? The report contains references to the global crisis and the aging of the population, but that is not the main point. The main culprits are the coronavirus and the conflict in Ukraine. Here, however, the World Bank is cunning: the Russian special operation started in 2022, which is beyond the scope of calculations. But who cares about such details?Generally speaking, the very fact of a slowdown in global economic growth is beyond doubt. The funny thing is that the best minds of the world’s economic elite, including a dozen and a half Nobel laureates, are working for the development of the economy. And in the end, almost zero with a lot of problems on top of that, which calls into question the very viability of modern economic thought. And a series of shameful crises for economists, which they could neither foresee nor prevent.It is clear that the coronavirus, as well as the mistakes of European and American financiers, played a role here. But the main fundamental reason for braking is different.It should be remembered that the source of economic growth is innovation, which gives consumers new useful goods or increases labor productivity. If they are really useful, the economy grows, otherwise there is no effect. The problem is that the Western economy for a long time did not receive inventions that could seriously improve people’s lives or increase production efficiency. The last major breakthrough was computers and the Internet, which peaked at the turn of centuries past and present. It cannot be said that their possibilities have been exhausted, but the effect is no longer as revolutionary as it was 20 years ago. And then, the breakthrough in the economy that they brought is still not as great as the increase in human capabilities associated with the introduction of electricity or an internal combustion engine. There are biotechnologies that prolong health, but they are not yet revolutionary. So far no one has a cancer pill or an elixir of immortality on the market.
What if there are no good innovations, but the markets really want a reason to speculate? That’s right, you have to invent them, inflate the bubble and win. In fact, that’s what Western venture capital has been doing for the past two decades. And then a flood. I mean crisis. There is a sobering up and reassessment of values, the performers with new “investment ideas” make money, most of them lose money. Occupation is fascinating, but it has nothing to do with long-term, sustainable development.What does the World Bank propose to fight global economic evil? The development of investments, the improvement of monetary and fiscal policies, the reduction of transport and logistics costs, the simplification of the regulation of trade flows, the development of trade in services, as well as the involvement of all those who are possible in production, which should support the position of the aging West. In the short term, it may help, but it won’t be a salvation.The current prosperity of the collective West rests on its ability to borrow money on the world market. As this reservoir empties and the technology gap continues to narrow, the West will have to live with a declining standard of living. Developing countries, including Russia, have a fairly large margin for economic progress due to catching up in development and the development of advanced technologies. So one day we will catch up with Europe, for example, at the level of the modern Czech Republic. The European Union will become poorer and we will become richer. Therefore, I fully believe in the prospects of stagnation for the collective West, which has lost its military and economic tools to exploit the rest of the world. And for us, on the contrary, it will be the hour of sustainable development.