Alpha Hunters: Investing in Global Development
| Dec 15th, 2011 | Filed under: Alpha Hunters, Alpha Strategies, Microfinance, Today's Post | By: vshah |
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From our “developed world viewpoint” it is sometimes easy for us to forget that there was a time when the United States and Europe were (as we would classify them now) “developing” economies- largely based around agriculture, with some limited trade, and huge income inequality. The industrial revolution changed everything, and began a series of events which brought massive opportunity for hundreds of millions. From our viewpoint, we also sometimes forget that during these revolutions- immense investments took place to finance the development of industry and infrastructure – while great philanthropists of the time provided social opportunity to lift people out of poverty.
“…The changes associated with the industrial revolution go far beyond the merely technical; they include population growth, large-scale and extensive industrial investment, and the remarkably pervasive effects of the application of science to industry, and have, in the past, led to a new system of social, industrial, legal and other relations, often described as modern industrial capitalism.” wrote Pollard in “The Economic History Review” (Vol. 11, No 2. 1958). He continued, “…In the present state of techniques, every important nation may sooner or later pass through that stage of economic development. Nevertheless, the technical similarities of the process of industrialization impose certain common features on each industrial revolution, of which the pressure on consumption, caused by massive simultaneous investment, is one of the most important. This pressure may in the future be obviated by large-scale foreign investment, or by new techniques beyond our present understanding. Without such help, one might venture to prophesy that the countries in the Soviet orbit will find it extremely difficult to ‘catch up’ on the consumption of the West… while the ‘underdeveloped’ countries in the rest of the world, as they come to the hurdle of their industrial revolution, will find it hard to maintain rigorous limitations on real wages and other incomes within a democratic framework…..”
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Author Bio:
Vikas Shah is Founder of the consultancy Thought Strategy and CEO of Swiscot Group (a diversified trading firm). Vikas writes and publishes Thought Economics, a leading journal where he interviews some of the most influential individuals in the world. He is a respected commentator and analyst on global issues, finance and economics and a non-executive to a number of philanthropic organisations worldwide. You can follow him on twitter @MrVikas.
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