Our current financial mess has been 500 years in the making, according to the economic historian Niall Ferguson. And, he added, “Great financial upheavals have social and political consequences far greater than most people imagine when the crisis begins. Mark my word, the political crisis is in its early stages.”
Ferguson offered that prediction to a Tufts audience that packed a campus performance hall on October 13 to hear him deliver the 15th Richard E. Snyder Presidential Lecture.
“What is significant in this financial crisis is that it is a crisis of global imbalance,” said Ferguson, the Laurence A. Tisch Professor of History at Harvard. This imbalance—wherein the vast majority of the world’s wealth has been owned and controlled by a minority of the population, specifically those living in Europe and North America—and the shifting geopolitical dynamics of the late 20th and early 21st centuries have brought us to where we are today, he said.
The Snyder Lecture is designed to provide a forum for intellectuals who offer a provocative point of view, or who have challenged the conventional wisdom in their field. Ferguson has been characterized as a “declinist,” one of the contemporary writers and thinkers who have chronicled the “decline of the West” and the rise of Asian powers, most notably, China.
“American economic leadership will give way to Chinese economic leadership,” he said. “Welcome to the future. It’s arrived.” But, Ferguson added, this is not necessarily a bad thing. “We all need to acclimatize to the end of Western ascendancy,” he said at the end of his talk. “We need to embrace it. But the big question is, do we need to bow to it?”
Ferguson framed his lecture on “The Financial Crisis and the Descent of the West” by describing the argument he makes in his forthcoming book, Civilization: The West and the Rest (Penguin, 2011). A prolific writer, Ferguson is the author of some dozen books; he is also the creator of a widely popular historical series for British television and a frequent contributor to newspapers and magazines in both the U.S. and the U.K. He spent much of his academic career at Oxford University, where he remains a senior research fellow at the university’s Jesus College.
His book, Ferguson said, helps set current events in a broader historical framework. The key concept, he said, is that most of the world’s wealth has been acquired since the Industrial Revolution, and that much of that wealth is held by Westerners, who make up far less than half of the population. (This includes the period of colonization, when most of the wealth from African and Asia was funneled back to the imperialist “motherlands,” he said.) Throughout the past several hundred years, at least until the latter part of the 20th century, the gap between East and West became wider. This “great divergence” in economic status “is the single most important thing about modern economic history that you can know,” he said.
“I wanted to explore why that should be,” he said. “Why was it that a minority, originating in Europe, became so much richer than everybody else?
“It’s not just about money, and it’s not just about relative incomes,” he said. For example, Westerners also acquired longer life spans, and even gained in average height and by other measures of material well-being.
“I wanted to write a book that would explain this great divergence to my teenage children,” he said. “So if they read only one history book and spent the rest of their lives sending text messages, at least they would slightly understand the world.”
And so Ferguson has labeled the six principles that he sees as responsible for Western ascendancy as “the six killer apps.”
“Apps look simple. They’re just icons, and you hit them with your thumb. But unless you’re a geek, you don’t know how they work at all. But behind the icon is lots of complex code. The institutions that made Western ascendency happen are like that. They look simple, but behind them is great complexity.”
Ferguson’s “six killer apps” include:
- Competition (multiple states throughout Europe, as opposed to the centralized authority that was common in Asia)
- The Scientific Revolution, specifically, the introduction of the scientific method
- Private property rights as the basis of common law and the foundation for the political order
- Modern medicine, which could control epidemic disease
- The advent of the consumer society, which drove the Industrial Revolution
- A work ethic that impelled Westerners to seek to work in ever more efficient ways
The book also asks the question, “Is Western ascendancy ending?” And to that, Ferguson says, the answer is yes. “There is compelling evidence that 500 years of Western ascendancy is indeed ending on our watch. We are privileged to live through the end of Western ascendancy. But I see that as a cause for celebration, and not for lamentation. And that’s what sets me apart from the [rest of the] so-called declinists.”
Since the late 20th century, the “great divergence” in wealth and relative incomes between East and West has begun to close, Ferguson said. In the 1970s, the average American income was 20 times higher than that of the average Chinese. It is now less than five times higher, “and falling fast,” he said. “The differential has narrowed incredibly fast. That’s the most striking feature of our time.”
“We no longer monopolize those killer apps,” he said.
Helene Ragovin can be reached at firstname.lastname@example.org.