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Formula for development


August 9th, 2017


Д.Жаргалсайхан
@jargaldefacto


932   0


8 min


Mankind has seen three major revolutions: agricultural, industrial, and information. Each of these revolutions had a broad effect on societies everywhere and took the world to a new stage of development within a short amount of time. What started every revolution was a change in the way resources were utilized, which vastly improved labor productivity and increased wealth. This increase in wealth entailed changes to societal organization, and thought leaders of every generation always attempted to develop a specific formula for achieving development and ensuring every member of the society has a prosperous, happy life.    

Agricultural revolution 

Nearly ten thousand years ago people underwent the agricultural revolution by transitioning from a nomadic lifestyle to that of settled agriculture, growing crops and taking up animal husbandry. The revolution brought about a wide range of technology – from simple devices to cut crops to advanced irrigation systems that were used by the ancient Egyptians to water their crops from the Nile. It allowed for increased production of food and created more products than were in demand. This led to the establishment of settlements that sell their surplus products, which was a significant change to the way people lived. Subsequently, new items such as beds, chairs, and desks that were never used by nomads came into use. As more people became involved in trade and exchange, there was a need for a common regulatory system, which created leaders and governance. In this sense, the agricultural revolution transitioned society from one that had a simple organization into one with more complex systems. When the powerful started controlling the less powerful, they expanded their territory and eventually established slavery. Depending on geographic location and climate, feudalism and kings came into existence, which started territorial wars that lasted for years.

In the second century BC, India saw the creation of a treatise named the Artashastra in Sanskrit language that would be used for hundreds of years. The treatise talked about how a country should oversee its development and what role the state has. When the Roman Empire waged wars to rule the entirety of Europe, they were also spreading their own ideology and doctrine on how a state should run itself. The formula for development in this era was about invading new land, taking control of others and their properties, making people into slaves, and trading.

Industrial revolution

The industrial revolution started in the 17th century when people began using machinery to do tasks that were traditionally manual. The world was seen purely as a creation of god until the Middle Ages, when the Renaissance took place, bringing significant changes to the way mankind thought and perceived. It came with scientific progress and brought about a lot of new ideas and discoveries in natural science such as chemistry, physics, and geography. As a result, a drastic change in technology took place, which led to English scientist Watt inventing the steam engine. This new type of engine allowed for the creation of trains and ships, initiating a significant change in transport and logistics. When spinning and weaving machines came into use, mankind became able to mass manufacture clothes for the first time in history. As commerce and manufacturing expanded, the urban population continued growing until the beginning of the new millennia.   

In 1778, simultaneously with the industrial revolution, Scottish economist Adam Smith developed the most realistic conclusion of how the wealth of nations was created. His theory said that the wealth was created by labor distribution, productivity, and free markets. He explained in his book ‘The Wealth of Nations’ that the free market acts as an ‘invisible hand’ that regulates itself, when it is free of controls. However, he noted that the market becomes less free when impacted by external factors such as monopoly, taxes, and lobbying.

At the same time, France had a political revolution that demanded three values: liberty, equality, and fraternity. In 1776, the United States of America announced that they had formed a new nation on the other side of the Atlantic Ocean. Their constitution stated that the United States government would consist of representatives of the people and would work to serve the interests of people, safeguarding their freedom, rights, equality, and security.

Having acknowledged that the true wealth of a country comes in the form of a prosperous livelihood for its people, rather than natural resources, nations understood that this could only be achieved with democracy, free market, and competitiveness.

Information revolution

The information revolution started almost 30 years ago, and it is still imposing rapid changes on our society, economy, and lifestyle today. This revolution traces back to the invention of the computer chip, which allowed information to be stored and transferred electronically. It opened up countless opportunities for mankind, examples of which would be laptops and mobile phones. The transportation industry saw rapid development as navigation was made easier. Significant changes were brought about in education while artificial intelligence started operating machines. Communication between people is no longer heavily impacted by location and time. Labor productivity was enhanced due to the changes that were made to the way we work and live.   

The outcome of the information revolution did not change the way we see development – as a prosperous livelihood of peace and happiness. The only difference was made in what we think causes development. Democracy, free market, and ability to innovate are now seen as the sources of development.

The history of all countries proves that democracy is not perfect, but it is the most effective system that the mankind has ever tried. Democracy has fewer flaws when there is a transparent accountability system with active involvement of the people.  

A free market economy is solely based on private ownership, which has created more value than anything else in the history of mankind. Given that all commercial relations are voluntary, the free market economy is arguably the most ethical system. Although there are flaws, there is relatively more room to fix them because issues are connected to properties that people own.

The most fertile soil for the three values mentioned above is the rule of law. If the state operates illegally, individuals are treated differently under the law, and people and their property are not protected by the law, it will be impossible to fully realize the potential of democracy, the free market, and innovation.

The biggest obstacle that is holding Mongolia’s development back today is the absence of the rule of law. While the authorities and political parties trample on the law and control nearly all of Mongolia’s wealth resources, ordinary people are caught in debts.

The fate of Mongolians currently depends on when Mongolia will start truly upholding the rule of law.

 

2017.08.02


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