By Franz Schurmann

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Non-Prediction #51 for Tuesday, March 14th, 2000

No prediction this week but an essay on the mind-set that wealth is the normal condition of humankind

It's hard to think of the world as rich when you see homeless wretches in San Francisco or skeletal beggars in Sao Paulo. But the facts of life and destiny are that the world is richer than it ever has been and is getting even richer.

Just about everywhere in the world the amounts of goods and services offered are gargantuan and still growing, Fifty years ago much of the world still lived from subsistence economies. Now hardly anybody does.

Will the oil crisis bring the system down? Will the poor and miserable rise up in fury against the rich? Neither is likely. If there's not enough oil then other ways will be found to move vehicles along. And there is already enough "bread and circuses" around to deflect the poor from rebellious thoughts.

The reason is that wealth has become a state of mind that even the poor embrace. In San Francisco there are so many who beg that it defies "rational choice." How can so many outstretched plastic cups all get something for all of them? The only answer is that they know that San Francisco is super-rich and the odds are that most who beg will get something.

There seems to be a widespread mind-set in San Francisco that wealth is the natural condition of humankind. If you're out of the loop there still is the feeling that you can trap a little bit of that wealth. This mindset is not restricted to a few prosperous cities. It has spread all over the world. Why?

The first reason is that "economic miracles," once considered rare, have now become commonplace. The big question in many countries is not when development will begin but why is it going so fast. A decade ago Shanghai was already booming but Shanghaiers believed it would be ages before China's poverty-stricken inland would move. But now the inland is moving even faster than the China coast itself. Except for jaded Japan so is most of East and Southeast Asia.

China's super-speed development is the main reason President Clinton is pushing China WTO membership so hard. With communication technology, in value terms, now comprising 60 percent of all US exports, access to the China market is the best assurance our unending bull market will continue.

Development "miracles" are much more common than is thought. The USA itself is a big one. During the depression-ridden 30's the American economy was on the ropes. But during the wartime 40's it became a colossus. Or consider South Korea. In the 60's development experts considered it a "basket case.". Now it is a super-modernized industrial giant with over half its population wired.

As late as 1944 the renowned economist Joseph Schumpeter thought capitalism was doomed. He believed the World War II American production miracle was due to socialist-type industrial mobilization. True, the post-war "military-industrial complex" had a top-down aura. But that complex has shrunk while capitalism is spreading everywhere.

But is it capitalism that's spreading or the mind-set that wealth is the natural condition of humankind? Consider China. Not so long ago China and India were considered irremediably poor. Now China is booming and India could eventually rival the US as a leading center of information technology.

In population terms China is the biggest country in the world. Of its 1.3 billion people some 95 percent are Han Chinese. From the Opium War of 1840-42 till recently Chinese were fighting Chinese. They may again if Taiwan should proclaim its independence. But both on Taiwan and Mainland China the idea that wealth is the natural condition of humankind has spread widely. The business communities of both Taiwan and the Mainland work closely together to make that idea a binding force.

In Kashmir there is terrible violence. But what is striking are the hundreds of thousands of "computer schools" everywhere else in India. And even bloodied Kashmir is wired to the point that the violence can be followed by anyone in the world who is wired. And making it even easier is that English is the common language of all the contenders. India's combination of computer knowledge and English is spreading the gospel of wealth there.

Is it market capitalism that's creating the wealth? In part yes. Is it socialist guidance by the state that facilitates the new capitalism? In part yes. But the why question cannot be answered until one understands why so many individuals and groups have accepted the new gospel of wealth even if they, personally, don't benefit from it or detest it.

Americans say "where there is will there is a way." In the human psyche will is like the potential in a battery. When unconnected to an amplifier the battery is inert. But the moment you plug it into a portable radio, rational sounds emerge. A potential has been transformed into movement.

If people have no will to do something nothing will happen. What then turns on an individual or a collective will? Perhaps a story from a small South American nation can provide a hint of an answer.

Guyana is an English-speaking country in the northeastern corner of South America. Its total population is a bit more than San Francisco's ( 782,000 versus 729,000). Guyana is poor but has great developmental potential. San Francisco is super-rich but with one of the fastest rising homeless populations in the country.

Guyana's main population groups are Indo-Guyanese around 50 percent and Afro-Guyanese around 40 percent. Both groups are poor yet compete for political power. Some years ago the bridges over the Demerara River collapsed. The Indo-Guyanese decided to show the Afro-Guyanese, who ran the city government, an example of their can-do capabilities. They quickly built pontoon bridges that moved almost as much traffic as before. A few years later, as the Afro-Guyanese were losing power, they decided to show their opponents what they could do. Within a few weeks they mobilized their entire population to clear Georgetown of the mountains of debris that been accumulating for years. They won the election.

Unfortunately, as UC Professor Percy Hintzen who was born and raised in Guyana sadly notes, ethnic conflict in the country is worse than ever. Nevertheless, if the two perennially quarreling parties could get together then there is a good chance that dual potential could be activated. In the 1980's Mozambique's left and right joined together after a bloody civil war. The result, until the recent floods, was that the country's growth rate was one of the highest in the world.

Guyanans know what market capitalism is. They know what socialism is. They know quite well they have no national unity. So the first step is to do what the Mozambicans did. But then that's still not enough. There has to be a new mind set that sees exciting possibilities and not just insuperable obstacles.

South Korea is a giant compared to Guyana. But in East Asia it is considered a smaller country, rightly or wrongly. Earlier it could have decided they are no match for Japan and China. Instead they plunged ahead, very successfully. There was one key ingredient that justified their ambitions. They had trust in the world system. They knew that if they manufactured first rate goods and played it smart on the world scene they could score. And score they did.

Consider a last and final story. In the 1970's both socialist Yugoslavia and feudal-capitalist South Korea started automobile industries. Both of them saw this as an export way of getting out of domestic crises. They targeted the USA as their chief market. The Yugo and the Hyundai hit America at the same time. Ten years later the Yugo was a failure and the Hyundai a big success. Why?

The Yugoslavs did not know or trust the world economic system but felt they could manipulate it. The South Korean chaebol corporations reveled in it. Even though they disliked Japan the chaebols accepted Japanese investments. The Yugoslavs instead got bogged down in bureaucratic squabbles.

Even more important ordinary South Koreans began to see consumer capitalist wealth pouring in. A new mentality about wealth and poverty developed, By contrast the Yugoslavs increasingly depended on remittances from their hundreds of thousands of guest workers in Germany. Yugoslav potential faded away like an unused battery. South Korea's batteries got recharged again and again.

The gospel of wealth only works when it involves hope, trust and direction. My good friend Chen Jie who fled China shortly after Tiananmen told me a tale of his striving in America. He wanted to make money and so kept racing after money. He then found out that money ran faster than he could. He wondered what to do and finally tried chasing people rather than money. To his surprise he found money chasing after him. And because it ran faster than he could the money always caught up with him. He had and has hope, trust and direction.