CHAPTER 1

Concept and Methodology

Out of the Rabble is the title of this book. The thesaurus describes"rabble" as "a mob, crowd, throng, horde, swarm, gang, masses, hoipolloi, common herd, and commoners." The title therefore describesan economy that can surprise everyone by emerging out of ordinary,underrated, and deplorable circumstances. This is the example shownby the new miracle economies of China and India. Yet, in addressingthis topic, I also want to convey the meaning of "rubble," as in "debris,ruins, or wreckage." That is what the emerging economies looked likejust a few years ago. Indeed, their rise would not have been described asa miracle without a dramatic transformation from chaotic conditions.

Why some nations are thriving at a time that others are in crises is amatter of interest, but much more important is how a primitive-lookingnation can rise to overtake those in the first world. In coming up withthis understanding, I used a number of approaches.

First, as a habitual thinker, I often look for empirical evidence tosupport my views. Many researchers set up a hypothesis and conductextensive research in a scientifically organised way. I do my researchdifferently.

While I worked as a defence attaché in China from 1988 to 1992,I developed interest in Chinese economic development. I experienced,first-hand, the economic policies of China and how they affected ordinaryChinese in a negative way. At the time I did not appreciate what theywere doing, but with hindsight, what I learned was a revelation. Whatwas of particular interest was the vast difference between their policiesand my country's policies. Chinese policies stabilised the economy.Although there were various social ills, they were making astonishingprogress.

The skyline of Beijing looked like a forest of construction cranes.Skyscrapers were emerging from squalor. People lived in slums alongpathways that only bicycles could navigate. They were so involved inproductive and creative activities that they would approach you in thestreet with their inventions. I got into the habit of collecting interestinginnovations.

However, the quality of Chinese products was evidently poor. Whoin the world could buy these products except the Chinese themselves,courtesy of an autocratic government that banned foreign productsfrom the domestic market? The pressure for reform was gatheringmomentum both from within and outside. It was not a surprise thatthe June 4, 1989 Tiananmen Square Clashes became a watershed inChinese economic history. On that night, more than two politicalforces stood opposed to each other. Rather, the force for economicchange was opposing China's economic programme. The latter forcestriumphed, but one wonders: What would have happened had Chinaabandoned its programme?

The year 1992 is a significant one for my thesis. The Americanpresidential elections were playing out. In an interview with the press,President George H. W. Bush defended his record by saying that he haddone a lot for America by liberating Eastern Europe and Africa, and heurged American companies to go and conquer those markets.

This was an awakening for me. A new thesis was emerging: marketswere important! That same year, after listening to the American debateand armed with the Chinese experience, I returned to find Zimbabwein the middle of a similar debate. Which economic direction should thenation take? Our people had spent more than a decade in a Chinese-styleclosed economy, from 1980 to 1992. Like in China, the reformmovement was gathering momentum, driven by American influence.I immediately registered that economic liberalisation would not begood for us because we were not strong enough to compete. Unlikethe Chinese situation, in Zimbabwe the forces of change triumphedover gradual reforms.

Therefore, my next preoccupation was in observing the future,given my hypothesis that there would be disadvantages and that thestrong would benefit. True to form, my hypothesis was confirmedover the next eight years. America, basking from African and EasternEuropean markets, enjoyed unprecedented growth, while littleZimbabwe allowed all of the world's best products to enter its market,destroying its industrial and creative base in the process. The nationmoved from a policy of "make it" to "buy it," and as unused skills die,it lost most of its skilled labour. I was convinced of what the power ofmarkets can do. As many groped in the dark for explanations, I felt itwas time to use my understanding to predict what would happen inthe future; this led to my prediction of the global crisis.

In this book, I hold out the theory that markets played a significantrole in the economic fortunes of the countries under the spotlight:China and Zimbabwe. Markets similarly continue to influence thefortunes of the United States and Europe. While it is clear that marketsplayed a dominant role in the case of China–US economic fortunes,there is uncertainty over their role in Zimbabwe during the period1980–1990, where, in spite of a captive domestic market, industry hadnot grown. During this period, industry...