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The road to riches
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Programme six: The end or the beginning?

Peter Jay

The last stage of my journey along the road to riches takes me back to my familyís roots, in South East London. Todayís children live in a time of such rapid change that we can no longer assume their lives will be anything like ours.

Our story now turns to the last half century and what it tells us about the way weíre going. My own perspective was formed right here. Almost ninety years ago, my father aged five was walking up this street when he saw a group of children streaming out of school. Why he said to his nurse am I wearing shoes and they are barefoot. Because she said, they are poor. That question, why some people in the world are poor and others arenít occupied much of the rest of his life. And he infected me with the same puzzle -- is it really necessary? Can it be right? Letís see..

For me these questions have always felt personal. My father never forgot this childhood puzzle. He became convinced that poverty was the greatest of human evils. By the time I can remember he was putting that principle into practice in government.

Armed with that idea - that perhaps people need not be poor - letís meet the men and women and visit the places that can test it out for us.

To Stanley and Dorothy growing up in Yorkshire government did seem to be helping.

But for people in this town government has been first too much and then too little.

Mr Nan[g]ís home town has been set free. He and it are getting rich quick.

Mr Nicolaoís country is very poor, always was and still is.

From my home in the middle of England I have planned my journey. The lives of all our chosen heroes have been profoundly affected, for richer or poorer, for better or worse, by what governments have done or failed to do since 1945.

But our story...

The industrial world was coming out of the most devastating conflict in human history. Its leaders knew that their predecessors after World War I had botched that peace. They were determined to do better; and this time their strategy was to take direct responsibility for the economy. They would manage it, guarantee full employment and protect the poor.

Industrial towns like Batley in Yorkshire had for a century supplied the wealth of the nation; but they spawned a society in which many were poor and insecure. Batley was a textile town. All mills, huge mills. Nearly everyone in Batley worked in the mill because thatís all there was. The Beaumonts have lived in Batley all their lives.

Stanley Beaumont

So I was a little lad brought up as a millworkerís son never knew anything better, quite happy kicking a ball about, happy kids all the same, all terribly poor, never knew anything better.

Stanley and Dorothy chat No hot water, no electric light, very cold. Used to freeze in winter, put an old blanket on, topcoat on your bed. We were so poor we could only afford one piece of coal per night.

Peter Jay

After 1945 the usual post-war slump didnít happen. For Stanley and Dorothy this soon meant a better house.

Stanley and Dorothy chat

- Big front room. The Parnell washer was great. We even got a telly.
- We went in there and saw the bathroom, we were absolutely amazed, green tiles, hot water at the turn of a tap
- Gardens were the most important thing
- Yes you built a greenhouse. The first thing I ever did when I went from the little house to the semi- detached house was to take Linda out onto the lawn and play ring of roses. Weíd never had a garden before.
- We really thought weíd hit the jackpot.

Peter Jay

Harold Macmillanís notorious catch-phrase exploited a truism of economic growth. Things are always better than they were. But people felt better too. The health service was the jewel in the crown of a fairer as well as a richer society.

After post-war austerity, the consumer was reborn. Spend, spend, spend celebrated the new affluence. For Stanley and Dorothy it changed everything.

Stanley and Dorothy

- Having a car you were mobile you could move about. So we finished up at Tower Vans in Mablethorpe
- We went back there every year. Marvellous holidays. By that time we had a bit of money and we could give them spending - they went in the amusement arcades. We could afford a few luxuries.

Peter Jay

They and millions of other people proved my father right when he had taught that poverty and happiness seldom go together.

Stanley and Dorothy

- Poverty leads to an unhappy life. All I can think of my childhood is my parents arguing about money. They couldnít afford this or that. They felt inferior to everyone else about. They developed a second class citizens outlook..

Peter Jay

Blackpool. The golden mile, where one September day, the music stopped for the golden age of government-guaranteed well-being. I remember it well. The post-war strategy of government taking direct responsibility for the economy had worked for a while; but by the Ďseventies the flaw was obvious. The price of full employment had been more and more inflation. For twenty years under the two Harolds, Macmillan and Wilson, this awkward truth had been dodged.

The new prime minister, James Callaghan... Politicians hadnít talked like this for at least twenty years. Things would never be the same again.

We used to think... Those words inaugurated a new era. Immediately, inflation came down and unemployment went up. As this new realism took hold more profound changes began. Government withdrew from the commanding heights. Soon market forces were unleashed across the board. Trade unions resisted and were overpowered. Margaret Thatcherís walk in the wilderness on Teesside showed that government could not always stand back; but her gospel was private enterprise and self-help.

Stanley and Dorothy have benefited from both post-war strategies, before and after 1976. Now they even own shares. They have witnessed the high tide and low tide of confidence in what government can achieve for the economy. They have more thanks than regrets.

Stanley and Dorothy

- No you canít go back.
- It doesnít matter how many rosy glasses you put on you canít go back.
- You can paint nice pictures of happy moments when you were playing in the fields. But in reality we were second class industrial fodder but we didnít know it. So it didnít really matter. But I could not go back knowing what I know now. Weíve dome alright.

Peter Jay

The debate in Britain over the role of government in steering the economy and alleviating poverty isnít over; but it was narrow compared with the extreme ideas in other places along the road to riches..

For seventy years Russian Communism looked like the biggest experiment in economic history; but it failed. There was no free enterprise in the Soviet Union. In fact there was very little freedom at all. The state owned everything, planned everything, looked after everyone from birth to death. My contact in Gorky Park in Moscow has come in from the cold of the communist years. He still remembers how bad it was.

Borovoi

Everything divided into black and white - enemies and friends, right and wrong, good and bad. It was a very simple explanation of everything. It was a sort of slavery. And it cannot be productive, it cannot work for a long time.

Peter Jay

It wasnít productive and it didnít work. Communism collapsed. Russia, we thought, was now free to take-off, fizzing with unleashed enterprise. The dead hand of central bureaucracy had held it back for so long that the chance to catch-up seemed irresistible. But was it ? Iím off to an ordinary Russian town called Ivanovo a few hours drive north-east of Moscow.

Soviet propaganda liked to project the civic pride of happy workers. Now no-one is singing; and there is little pride. Shopping without money is no fun. Pensions no longer buy a fraction of what they did. Is the present so much better than the past ?

The townís biggest hotel is closing. So, the staff are on hunger strike. Jobless spectres now mock the image of happy workers. Under Communism the state owned all the industries, like this textile mill. What they produced and how they invested was planned in Moscow. Market forces had almost no role. Now market forces are all there are; and they can be harsh. The factory has become a private business. Itís one of the few still working in this town, and only by the skin of its teeth.

For the managers at least thereís been the thrill of living dangerously.

Valery Yermilov

Itís more interesting for us now than in the soviet years. Then you used to have to do everything according to the central plan, there is no chance to use your own initiative. Itís much harder work now for the management but more fun. But I have to admit that for the workers who have lost a lot of benefits and their security I would say that about 80% of them would prefer to go back to the old, Soviet system.

Peter Jay

Back to all that - Planning, rationing, the police state, the tyrants in the Kremlin ?? Back to Lenin ? To Stalin ? Well, perhaps not quite to him. But many Russians look back on the Communist era as their kind of ďgood olí daysĒ.

Stalinís system was disfigured; and under Brezhnev its fundamental flaws finally showed through, its neglect of what I call the 4 Is. What is certain is that the 4 I s had finally caught up with the Soviet system.

Information, incentives, investment and innovation are what make any economy change and grow. Markets and prices provide information about wealth people want and they also provide the incentive to supply those wants. And whatís more they provide incentives to invest and innovate to supply those wants better. Without the 4 Is any economy can only stagnate, not knowing what to produce and unable to change.

Since Communism Russia has changed, not wisely, but too well - at least too fast, replacing tyranny with anarchy.

Good government - so vital on the road to riches - isnít just the end of oppression. Like fishing in the ice it takes time and cunning.

Time and cunning are just what the next place on my journey has in abundance.

Itís still Communist, but a million miles from the world of 007. China. Iím here to witness a different experiment, another kind of economic transformation. For the last fifteen years the Peopleís Republic has been making more and more room for market forces in a land which has always had a genius for business.

Across the river from the heart of Shanghai a forest of sky-scrapers now stands where a decade ago were only paddy fields. Today it looks like Manhattan and Hong Kong rolled into one.

Half a century ago my uncle in the RN drove his ship up the Yangtse here and, in what became a major international incident, came under a barrage of revolutionary communist artillery from the river banks. Today, I can ride a riverboat up the same waters to look at the marvel of market economics thatís occurring under the same flag that fired on the British White Ensign a generation ago. Different routes it seems to the same road to riches.

Shanghaiís busy streets radiating from that famous waterfront are again today what they were before the Communists, the commercial core of one of the worldís fastest growing economies.

But come with me to a less famous city, Wenzhou. Great experiments need pilot projects; and, because of its long entrepreneurial tradition as a port importing, exporting and smuggling to and from the rest of the world Beijing chose it to blaze the trail for market economics in China.

Revolutions need heroes; and Wenzhouís is Nan Cun Hui. From mending shoes in the street as a boy he built a huge international electrical business.

15 years ago he started a workshop like this - just a crude garage with a back room. But Wenzhouís special status allied to Mr Nanís commercial flare and extraordinary energy sparked an explosion of industrial growth.

Now the whole city is buzzing with workshops, like Manchester in the industrial revolution. For centuries theorists have struggled to explain economic growth. In Mr Nanís factories you can almost see it in action: division of labour, technology, investment, organisation, capital in search of profit.

Mr Nan now has twenty thousand employees, most of them from poor farming families who have come in from the surrounding country areas. Mr Nan has a strong sense of Chinaís destiny as the engine room of the world.

Mr Nan

China has 5000 years of history. We have seen lots of boom times and lots of declines. At the moment America is the most advanced economy in the world. I firmly believe that if China continues its reforms we will become the most advanced. Look at us in a centuryís time, youíll see. After all what is a hundred years or so in Chinese history.

Peter Jay

Mr Nan is a man for all seasons. He shows me round in a rickshaw, with his chauffeur at the pedals. Just so he doubles as Wenzhouís leading capitalist and as its local Communist MP, oblivious of any contradiction. But heís a realist too. To be sure to get him to Parliament in time his Cadillac follows just behind.

Wenzhouís streets are now paved with gold in the eyes of the tide of humanity which pours in day by day - yet more steps along the road to riches - seeking a better life. The Communists in Beijing know they can no longer build a barrage against that tide.

The tide is fed by an ocean still out there, waiting. Letís not forget that thereís another China apart form the booming cities of the coast. Behind me lie thousands of miles of countryside, in which people in tens indeed hundreds of millions live in abject poverty. Their lives have scarcely been touched by the amazing growth thatís transforming the towns and cities.

The story of rice has been the story of China; but the peasants who grow it now dream of the cities, not least Shanghai, where the day can even start with a dance amidst the rush hour. Harmonising the individual desires of millions into a smoothly flowing society has always been the supreme challenge of economic history. But Chinaís old methods of making everyone dance to the same tune are no longer acceptable or workable.

The invisible hand of the market is being allowed to help, signalling wants, giving incentives and attracting investment. But the good government which alone keeps the road to riches open must not just prevent Russian-style anarchy. It must also respect human rights.

If China can both liberate its rural millions and balance personal freedom with social order, its future is bright. Back home I ponder the obvious puzzle. If Chinaís future can be so bright, why not everyoneís ?

Our story has plotted huge increases in wealth for people who were in the right place at the right time. But large parts of humanity have missed out altogether.

One part is in Africa. We are spoilt by comparison; and I asked family friend Walter Bgoya from Tanzania to explain why he thought anyone would do anything about Africa.

Walter Bgoya

Western countries will have to deal with the African question, with African underdevelopment because their history and the history of Africa are greatly intertwined. And I donít think this separation can take place where they say we canít deal with Africa. The Americans cannot for a start, they have a very big population of Africans inside America who want to know whatís happening in Africa. But even where you donít have a population of Africans you have the problem of Africans coming to these countries. And whether you decide to shoot them or throw them back in the sea, they are going to try to come to the North. Because in relationships where youíve got on one hand poverty and on the other hand prosperity the poor will always try to move to prosperity. This you cannot change.

Peter Jay

To investigate African poverty more closely my last journey was to Walterís own country, to Britainís former colony Tanzania, which reflects a hideous parody of development.

We - Tanzania, Britain and the world bank - planned successÖ We reaped failure The World Bank has an official definition of poverty, thatís living on less than a dollar a day. Having less than 60p for everything. And itís like that round here. We need to remember as we come to the end of our road to riches that there are more poor people in the world today than when we began. About 200 times as many.

Why are so many so poor? In the far south of Tanzania the question demands an answer. Itís one of the poorest areas of one of the poorest countries.

To see such poverty firsthand is to witness, aside from the suffering, the most terrible misuse of human potential. With the knowledge and capital that already exist in the world each one of the adults here could be producing value and earning incomes many times above their present level.
The welcome is warm; but the waste is woeful.

Across the country in the Shinyanga region the missionary tradition of Christianity and education is still alive. It recalls a time half a century ago when the colony was poised for independence and a great leap forward. To remember now how it felt you have to be a senior citizen.

Nicolao Melea

Independence to me meant getting rid of these whites who were there and having Africans in those position who would make decisions with a better knowledge of our situationÖ Our leaders were saying those countries are very far ahead of us but we can catch them up by running - while they walk, we will run. But so far I think we have not attained what was intended. There have been a lot of problems. But given time in the long run we may achieve what the others have achieved.

Peter Jay

Nicolao Melea was a school-teacher. Then he became a senior government official; but recently he has returned to the front line to keep body and soul together. Years of misgovernment and now crippling foreign debt have left the countryís treasury empty and its economy on its back. The outside world has imposed strict spending limits. Without money school attendance is seldom like this; and literacy has fallen. Hope springs eternal; and where hope fails, there is always philosophy to commend the advantages of poverty.

Nicolao Melea

People talk about other people about their relatives about what happens to them, how they are faring. And people get concerned about those around them. I think this makes people a bit happier. I donít imagine a situation where one would be happy enough with machines, with property as such. So I would personally think we may be happier outside here.

Peter Jay

But why should Africans have to fall back on philosophy ? I go back south, still in search of an answer.

Well you could have fooled me but this is in fact a cashew nut, one of Tanzaniaís main cash crops. But after theyíre harvested the story gets stranger still.

Cashew nuts are the sole livelihood of people round here; and they live very simply. Cashew nuts may cost us a pretty packet in the shops. But in their raw state theyíre worth very little; and they need a lot of processing to become palatable. Thatís where the value is added; and thatís where the profit is made.

So the real challenge has been to see that the nuts are processed locally, not after theyíve been exported. An expensive factory was built, with a lot of help from the World Bank But the factory is idle. It now runs only for the camera.

So, what went wrong ? A lot of reasons are given - the farmers could not guarantee steady supplies, transport broke down, trained staff could not be found, there was no industrial culture to back up the factory. Yet other places have beaten such odds. Are they just excuses ? Now the raw nuts are shipped to India, where children remove the husks with their bare hands; and Africa loses both value and income.

There are too many stories like this. History - the slave trade, colonisation and modern misgovernment - have, it seems to me, left Africa without the culture or appetite for business we saw in China.

But, whatever we blame, the gap between rich and poor yawns as wide as ever. Is this the end? And is this the world for which we should be very proud to have arrived at? With these extremes of the most incredible poverty and this absolutely shameless plenty on the other side.

If the incredible poverty has no role but to look on as the worldís riches sail majestically byÖ the gulf dividing mankind becomes an ocean. Thereís no friendlier place than Tanzania and no better place to learn the brotherhood of man.

And now I have one last journey to make, a journey of the imagination. To Londonís docklands. Weíve celebrated there the new millennium. Now we journey forward in time another 300 years.

The Millennium Dome in Greenwich. What will I find here in an imaginary future? The years pass, taking their toll on the Dome, but where will our story/road take us? How will the ideas and themes weíve identified develop?

I arrive at an exhibition to celebrate the first three centuries of the new millennium. Voice

Welcome to the Memorial Dome, one of the nationís architectural treasures and home to the Great 24th Century exhibition. You are Peter Jay. I am your virtual guide Su Lee. You want to know about economic development. You will be debited 10 Chinese Dollars.

Peter Jay

Thatís interesting. Paying in Chinese Dollars in Greenwich there must a single global currency and by the sound of it one economic superpower as well and itís China. But how well is everyone doing ?

Voice

Unfortunately not everyone did as well as us. The global warming that began in the late 20th century led to widespread flooding. Bangladesh, for example ceased to exist. Millions were made homeless. Economic migration as these people sought better lives became one the biggest economic forces facing the world.

Peter Jay

I wonder how they coped, how we all coped. What happened to government? I see the Houses of Parliament are empty.

Voice

Yes they closed Parliament as they got rid of most of the politicians. Now we have the good government computer programme. It works out what policies will best promote economic success and then asks people to approve them. Itís been so successful that public opinion has forced almost every country to use it.

Peter Jay

Wicked. But tell me more about this new world money?

Voice

Well the last coins and notes were issued 200 years ago. All payments are made electronically. But real shopping did come back into fashion after people got tired of buying things online.

Peter Jay

That curse continues - what a pity. And the workplace? Isnít that a factory worker clocking off ?

Voice

Yes, but he was the last. The Information technology revolution eventually ended factory working. But it fizzled out - it didnít transform life in the way people had predicted.

Peter Jay

Theyíre still repeating our series ?! It told the story of twelve thousand years. Is there a pattern that makes sense of it all ?

Curiously itís back in the real world of Batley in Yorkshire at the very end of our journey along the Road to Riches that we find a clue

Yes, yes, of course. The good old waltz. Forward, side, together, 1, 2, 3; 1, 2, 3.

At step one we advance. At step 2 we fight over the new opportunity. At step 3 with luck we settle the fight. If Step 3 fails, progress is reversed. The places we have visited on our road to riches follow this pattern.

World wars were fought over the new wealth of the modern age. Machines were smashed in the wake of the industrial revolution When oceans began to be crossed mankind advanced; and conflicts followed. Barbarian invasions and civil wars at home threatened Rome with anarchy. Military force imposed order, which favoured wealth creation. The earliest cities blossomed into a civilisation because they created a functioning society.

The waltz pattern fits the great historic transformations, like farming. A new opportunity for wealth is followed by squabbles over it; and that is followed by new rules to balance the claims of wealth-makers and the rest.

The story most of all is about people, like Stanley and Dorothy, like all of us, people who seek a better life, who work for it and who use their minds to imagine and create new chances.

That personal spark is not always enoughÖ Society must work too. But without the human spirit we should never have started on the road to riches at all.

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