Hey Em, that last line....'lost the ability to adapt...and reinvent' - pretty post-modern bleak isn't it!!
We may not have reached that 'modern' spandex future dreamt of in the 50s (and that now beguiles the emerging economies). But movement will assert itself again. I don't say 'progess' cos thats too loaded, but you know we're still dancing.

Schwittering machine reckons that we're still dancing - I'd say that "staggering" would be nearer the mark.

We now have a situation in which the US is running a huge deficit, the EU is demanding larger slices of diminished national cakes, several European countries are in all but name bankrupt, large swathes of the population are supported by state handouts, we import far more than we export, schools inculcate a sense of entitlement rather than self-reliance, and "public servants" are often paid far more than entrepreneurs can earn. If that continues, the West will decline fast as an economic entity, swamped by the enterprise and effort of Pacific Rim and emerging economies.

There's an old saying in these parts; you never get owt for nowt. If the West is going to get out of the financial hole that it has dug itself into, it's going to have to work and EARN it's way out.

Hi Engineer
Don't get me wrong, I share the sense of crisis. In fact I think Monovski states that pretty well. If anything he understates! There's a huge challenge facing the west (finances being just the tip of the iceberg). It's a crisis of culture, spirit, knowledge, history, science, art - the whole show in disarray. I gladly accept that.
However, I'm not prepared to roll over with the sentiment 'inevitable decline'. That's just lazy and millenial. It's a fascinating moment in Western history, perilous maybe, but exciting too.
Monovski makes some interesting assumptions. He certainly implies (if not states) that what has failed in the West is this 'Human Factor'(culture). He may be right. But then what is his recourse. He looks to a new 'emergent' culture in which to land his pristine capital(ism) - the West having become spent and undeserving: he consigns us to decline. So who has the real sense of entitlement here? Monovski.
Is he prepared to roll up his sleeves, grab a bit of humility and actually engage with this culture of decline? Is he about to put everything on the line - the entire grounding of our shared cultural assumptions in order to find a better future? I doubt it. But there are people, from all fields, who are doing just that - they're still dancing. And to me that's excitng, it's emergent and full of prospect.
Monovski talks of culture, but replies with capital. Capital(ism) is fine, but it's capitalism which is a subset of human activity, not the other way around. Monovski cops out. If the humanity no longer fits - he moves on; kicking the dust from his shoes.
Least so it appears to me!

Hi Schwittering Machine.

Thanks for expanding your original comment - it's much clearer where you're coming from, now.

I admire your optimism and enthusiasm - they are just the sort of things the West needs in bucketfuls just now - but I don't think it's sunk into most of the population of the West yet. When the Monovskis of this world automatically invest their capital closer to home, we'll have cracked it, but until a larger proportion of people develop a bit more drive, enterprise and ambition, then persuading him (and others like him) is going to be an uphill struggle. The Eastern European nations seem to have the work ethic we (not universally, but too prevalently) have lost, and until we can reinstill that we won't compete with the Asian tiger, and might even be caught out by an African rise.

How to reverse the trend? Monovski has it right when he comments on high tax rates discouraging enterprise, which is something governments can address, but only if their economies are in good enough shape to let them reduce taxes. Reversing the cultural and spiritual decline is not something any government can do on it's own, it will either happen or it won't. I certainly hope it does happen, and I'm trying to make my contribution to that, but it sometimes feels like swimming against a very strong current. Too many people have opted for the easy life because they've been allowed to; the current state of the Greek economy is an extreme example, but a terrible warning.

If a resurgence happens, it will probably be down to the combined effect of lots of little people doing their bit, quite possibly despite governments, not because of them. The present British government makes the right sort of noises, but suffers from the stultifying millstone of the EU with it's profligate budget and dictatorial ways. It also has very little room to move economically.

Another prerequisite is a change in the attitudes of the major financial institutions. They have to recognise that their role is as enablers of enterprise, and as a service to it. Sadly, too many in the financial services sector have come to regard themselves as the be-all and end-all of business; their hubris contributed to (but did not entirely cause) our current woes. Some humility, and an expectation of realistic rather than excessive financial gain, is very necessary.

As said above - we will be making progress when Monovski wants to reinvest his capital in the West.

Thanks for the reply Engineer - I'm not always well known for my optimism!!
I think you're absolutely right about the prospect for small groups/individuals to be catalytic for change (bypassing governmnet). From you own field I think of those nutters who first put a steam boiler onto a set of wheels! How unlikely must that have seemed at the time?

Monovski's comments are best explained by the fact that he is selling asset management services focused on emerging and frontier markets.

Here's my take on the "Human Factor". In Russia, for example, college graduates would rather work for the state than a commecial enterprise. Nigerians consider corruption an occupation. India, where their Communist Party is still important, has a state bureacracy that many citizens join because so little is expected of civil servants. None of these nations, including China, spends as much of their GDP on R&D or files as many patents as the US, EU or Japan. So much for the Human Factor emergin markets.

Europe does indeed have its "lazy Greeks", holiday-seeking Italians, and over-paid Portuguese. But, Europe overall is still among the most productive and innovative places on Earth - self-entitled or not. The emerging market story is powered by the capital goods produced by Germany, Netherlands, Sweden, etc. Not surprisingly, Europe has recovered faster from its 2008 crises than Asia did from the 1997 crises and did so without the benefit of massive devaluations and chronic currency manipulations.

The only reason we invest in developing countries instead of the developed is because, by definition, developing countries have bigger potential returns as long as they continue to reform, globalize and copy the West.