Predicting The Next 40 Years
By TAN Kee Wee
(MediaCorp 938LIVE’s Money Talks, Thursday, 16 July
2009, 7.50 am and 7.20 pm)
The downturn in US housing in the past two years led
to the collapse of many Wall Street firms. Global asset prices
are down substantially. And thousands upon thousands have been
It’s reasonable to feel that American capitalism as a
practicing ideology is deeply flawed. Worse, many feel that the
US economy is going down the drain.
Forty years ago, this feeling could not have been more
different. Because forty years ago American capitalism was
about to emerge as the dominant ideology.
On that day, 16 July 1969, everyone who had access to
a radio or television, set aside everything they did to witness
the launch of the first manned mission to the moon.
Over the next five days, all eyes were riveted onto
the Apollo 11 mission. Then on 21 July 1969, Neil Armstrong and
Buzz Aldrin became the first two humans to walk on the
It was one of those defining moments of the 20th
century, bringing all together in one shared experience. On
that day, all who looked up at the moon knew that there were
two men walking on its surface.
The success of the Apollo 11 mission not only signaled
the superiority of US over Soviet technology in the race to the
moon. It also demonstrated the superiority of American
capitalism over Soviet socialism.
This was the critical issue in those days. People very
much wanted to know then whether capitalism or socialism would
bring the most economic and social benefit.
Over in China forty years ago, this question must have
been asked as the whole country was dragged down by the
intensity of its disastrous Cultural Revolution.
Over in Singapore forty years ago, our export-led
growth capitalism was being embraced as the solution to
unemployment and the planned withdrawal of British forces in
The world did not know then what was happening inside
the Soviet economy in 1969. But with the benefit of hindsight,
we now know that the high cost of the race to the moon was one
of the factors that began to crack open the deep-seated
structural problems in the Soviet economy. In 1991, the Soviet
Union finally collapsed.
In the years following the Soviet collapse, American
capitalism grew to dominate the world. But, today, more than a
year after the credit crunch began, many wonder whether
American capitalism is still relevant.
Worse, many wonder about the true state of health of
the American economy. Is it so weak that it’s on the path
towards collapse, just like the Soviet economy was on its path
towards collapse in 1969?
What will the global economy be like forty years from
now in 2049? Some have predicted that by then, the Chinese
economy would dominate the world. If so, we would be able to
observe how the ideology of “socialism with Chinese
characteristics” affects the world.
Then again, perhaps we might not see a dominant
Chinese economy. The US economy could recover and hold on to
its dominant economic position, just as it did before in the 40
years after the Great Wall Street Crash of 1929.
In any case, most long range predictions of the
economy tend to be wrong. Why do I say that? Because we are
dealing with human beings. Just try to predict what your spouse
will do to you next week.