Summary: This article presents the author’s interpretation of the historical development and possible future direction of the global economy, focusing on manufacturing, raw materials, energy supplies and international financial relationships. It argues that colonial access to resources supported Western industrial expansion and that subsequent changes in resource availability and prices created economic pressures. The author connects these developments with Middle Eastern energy supplies, the petrodollar system, US Treasury bonds and monetary expansion. The article further contends that the relocation of manufacturing to lower-cost economies weakened Western industrial capacity and increased dependence on financial services, imports and outsourced digital services. It then considers potential consequences for India, China and other developing economies through weaker export demand, reduced remittances, higher energy costs, inflation, employment pressures and constraints on tax revenue and government capital expenditure. Although the author views agriculture and domestic raw-material resources as partial sources of resilience, the article anticipates substantial disruption through interconnected trade and financial channels. It forecasts a prolonged global adjustment, with initial severity potentially easing by 2032, and suggests that subsequent economic arrangements could be shaped by political and ideological changes, including approaches associated with Soviet-style systems or Fabian socialism. These causal explanations, numerical assertions and future scenarios represent the author’s views rather than established outcomes.
Manufacturing, Energy and Structural Changes in the Global Economy: Colonial Resource Supply, the Petrodollar and Industrial Relocation
Modern economy since it’s maiden strides from the first industrial revolution in the 19th century has undergone numerous structural changes and innovation in the perspective of science and social sciences but the core fundamental of modern economy remains the same which is manufacturing vis a vis the supply chain of adequate required raw materials.
For that reason the rabid colonialism surfaced in the most exploitative manner in the mid of 19th century to feed the huge requirements of raw materials in the burgeoning factories in the Europe and USA from the third world nations including India and China for their sizeable supplying capacity of raw materials in agro, forest and in mining segment.
However after cessation of rabid colonial power since 1940-1960 developed and highly industrialized economy started to confront severe financial trouble for twin reasons as such declining supply of raw materials from the former colonies and the consequent huge price rises of raw materials for their limited supply due to rapid industrialization in the third world nation and their economic emancipation.
The 1970’s historical stag inflation in the USA and in Europe was the first impact of said global structural shift of supply of raw materials and developed economy would surely be completely perished had not by great miracle limitless stock of crude oil and natural gases was not discovered in the middle east which provided the life line to the western economy to breath comfort from the dying state.
As a result western economy lead by USA by dint of their technological monopoly and military power constrained the then most back ward middle east nations to succumb to the absolute political and financial control of the USA lead west, the legacy of which is still continuing in full swing.
Since energy is the core and prime raw material of modern economy and technology, therefore western nations was highly benefitted by two ways as such getting the constant supply of vital energies and secondly, magnificent opening for USA to control the world economy through creating most effective ammunition petro dollar and USA treasury bonds apart from providing a maverick opportunity to print dollars and other currencies at their whims and to borrow limitlessly by the lure of strong currencies.
These factors at initial ensured to absorb the high cost of raw materials for industrial supply chain in the west but due to unlimited printing of currencies and the their consequential devaluation in 80,s end steered the western industries for hurriedly shifting their industrial bases to the third world in lure of cheap raw materials and the cheap laborers.
This constant flow of industrial capital and investments from west to the east in particular had has two disastrous affects upon the western economy. One is the de industrialization affecting the USA most and secondly for lack of sound industrial base fast weakening of their currencies including the dollar.
Adding to the woes due to artificial high valuation of dollar and other western currencies attracted billion of skilled and unskilled migrants to the west in last fifty years thus complicating the already weakening western economy more and more in fastest way.
Western economy since 90’s mid is virtually survived mostly on financial services and high interest income from the USA federal bonds which too is still out flowing in bigger proportion to the eastern nations due to three reasons as such high importing cost of raw materials and finished goods for weak manufacturing base, high out sourcing of cheap digital services from the third world and thirdly, the weakling value of limitless printed currencies resulting on the astronomical debt day by day beyond the control of the central banks.
For that reason USA and it’s crony nations after understanding the knocking financial catastrophe in their doors are in desperation to lay physical control over the enery sources in the middle east through war with the rebelling nations and their outfits.
Not only the mighty power of dollar and it’s value is steadily weakling fast upon which entire western economy banked upon in the last fifty years and financially survived but even the petro dollar is on equal footing being in highly depriciated state thus choking the western economy in all fronts with no foreseeable way out, being first time in their financial history.
Potential Effects on Developing Economies and the Future Global Order
Exports, Remittances, Energy Costs and Political Change
That another vital and critical issue is how this crumbling western financial structure will affect the third world nations including India and China, the power house of manufacturing, raw materials and services export?
These nations will at fast be severally affected though not in proposition of their western counter parts due to their srong agriculture and raw materials stock save crude oil but since all the third world nations are highly export dependents of goods, raw materials and services to the west apart from earning considerable precious remittances from their western and middle east migrant workers to boost their foreign exchange reserves, therefore they will suffer hugely due to low consumption of goods, raw materials and services by the west which constitute 85-90% of their export market thus putting in peril many domestic industries and jobs whose sign has already has started to blink.
On the other hand less export, high energy prices, high inflation and no meaningful job creation will further weaken the tax collection base and high import cost thus denting the government capex spending, the life line of the third world particularly in India to the lowest baseline and the consequences need to be deliberated for humanity reason.
However this financial correction on global perspective may continue at least for 20-30 years although initial severity will be subdued within 2032 at most.
But next trajectory and structural order of post of 2032 will be determined not only by the economic factors but also by political and ideological factors just like the Russian revolution in 1917 and other many consequential ideological revolution.
The most powerful emerging realities are of two folds in global perspective. Firstly, a new world order will substitute the present structure of economical and political order. Secondly, the next course of economical structure of most nations will be determined by the new financial structure suitable to the new political ideology most probably in erstwhile Soviet union line or in Fabian socialism political line..
