The Six Killer Apps
How the West Leapfrogged the Rest
I first came to Europe, when I joined HCLTech as a fledgling business manager in Brussels in 2006. Lived for four years and then went back to India with a decision to never come back. Providence struck and I found myself back in Copenhagen in Dec 2017.
As I worked with people of different nationalities over the past 20 years in Europe and India, one question always plagued me. I always wondered why a small mass of European nations, which only occupies 6.7 % of the world's land area, started to dominate the world from 1500 AD. Before 1500, Western Europe was stuck in the dark throes and was ravaged by the Black Plague, incessant war, and bad sanitation. However, the pendulum swung, as Europe inched towards 1500. It leapfrogged over other civilizations and dominated them for the next 600 years.
As I work with enterprises, I am sure that it was no accident or lady luck. It must be a result of systemic processes, which led to the dominance of Europe over the Rest, and what if the rest of the world could follow the same template?
Books like 1494 and 1492 provided me fleeting glimpses of answer, however, my curiosity was satiated after I read the book - Civilization - The West and the Rest, where historian Niall Ferguson offers a compelling analysis of the ascendancy of Western civilization and its significant impact on the rest of the world. Ferguson weaves a narrative that spans six centuries, attempting to understand why Western countries have been able to dominate the globe for the past half-millennium. At the heart of Ferguson's thesis is the notion of the "Great Divergence," a term used to describe the period when Western Europe and the European offshoots in North America surged ahead of other parts of the world in terms of economic development and military power.
Ferguson attributes the ascendancy of Europe post-1500 to six pillarheads.
Competition
Science
Property Rights
Medicine
Consumer Society
The work ethic
Out of all the above factors, I found work ethic to be the most fascinating, and will write about it in detail in a follow-up post.
The first of these "apps," competition, played a crucial role in the West's rise. Ferguson argues that Europe's fragmented political landscape was a blessing in disguise. Instead of a monolithic empire, like China under the Ming and Qing dynasties, Europe was a mosaic of competing nation-states. He shows how competition between European nation-states like England, France, Spain, and the Dutch Republic drove constant innovation as they vied for global dominance from the 16th century onwards. Progressive governments that developed pluralistic institutions also flourished economically, like the Dutch Republic and Britain, while more autocratic regimes stagnated. This fragmentation fostered a form of Darwinian economic and political evolution, where innovation was not only encouraged but necessary for survival. The story of maritime superiority and wars between fledgling nations enabled each nation to be innovative and nimble. As I reflect on our work, competition makes me nimble and alert. Without competition, I can stagnate and become like a deer caught in headlights.
Science as the Engine of Innovation Science, Ferguson's second app, was the engine of this innovation. The Scientific Revolution, which took off in the 16th and 17th centuries, was predominantly a European affair. The methodological approach to understanding and harnessing the natural world led to technological advancements that gave the West a military and economic edge. These advancements were not confined to gadgets and weaponry; they extended into the realms of navigation and exploration, allowing the West to project its power across the oceans. Even though Indians had great naval prowess even in the 10th century, it never expanded like the pioneering nations of Portugal and Spain who conquered the world through maritime trade.
Ferguson's third app on Property Rights—provided a framework in which individual rights could be protected and commerce could thrive. Contrary to autocratic regimes where the rules could change on the whim of a despot, the West established a system where laws were made by representatives and were meant to be transparent and stable. This legal and political framework underpinned the economic structures that facilitated the rise of the West. The Treaty of Tordesillas signed in 1494 played a key role in establishing world dominance and property rights for the European nations. I believe this is a key factor. In India even today, property rights are not respected and entangled for decades, which leads to low investor sentiment. Good Governance is the tablestake for Prosperity.
Modern medicine, the fourth app, saved countless lives and allowed Western populations to grow. The exportation of these medical advances to the Rest of the world also had profound effects, although it sometimes led to demographic changes that these societies were ill-prepared to manage.
The fifth app, the consumer society, generated demand for an endless variety of goods, underpinning the West’s economic expansion. The birth of consumerism in the West created markets not only within its borders but also in the territories to which it expanded. This consumerism was powered by both the production and the desire for goods, creating a cycle of economic growth that fed the expansion of capitalist economies.
Finally, the Protestant work ethic, which Ferguson counts as the sixth app, infused Western culture with a focus on hard work, thrift, and efficiency. He argues that the Reformation created a new religious and intellectual landscape in Europe, one that was more conducive to the development of capitalism and the scientific revolution. This was in contrast to the Catholic movement. Until the reform movement, Christian religious devotion was seen as distinct from the material affairs of the world. Lending money was a sin. We see this trait even in Islam and Judaism. Even in Hindu Religion, there is a notion that a pious life is bereft of wealth. However, the Reformation movement had none of this nonsense. The protestant reformation movement sowed the seeds for a capitalist movement, which swept North America and made it into a superpower. It was the Protestant missionaries who were responsible for more school enrollments in British colonies than in other countries, which had catholic missionaries. This is evident in my home state of Kerala, India, where we had a literacy rate of 55 % in 1941, which was comparable to some European countries in that period. It was due to the active Protestant movement in Kerala.
Overall, competition drove innovation, scientific progress led to new technologies, stronger property rights incentivized work and investment, advances in medicine increased longevity and disposable income, consumerism created new markets and demand, while work ethic maximized productivity.
The book attributes seminal advances in everything from commerce and science to technology and public health to the vigorous competition and freedom that Western institutions uniquely afforded. From fractional reserve banking and joint-stock companies to the Scientific Revolution and the Industrial Enlightenment, the West consistently transformed ideas into a worldwide economic and military advantage through competitive dynamism. However, Ferguson acknowledges that Western dominance may not last forever if its essential ingredients erode. He warns that factors like growing public debt, ballooning entitlement costs, declining competitiveness, an aging population, and a loss of work ethic now threaten to undermine the superior governance model that fueled the West's rise. Meanwhile, emerging economies like China and India could gain ground by selectively adopting aspects of the "killer applications" analyzed in the book.
Some critics state Fergusson is being simplistic and the story of Western dominance is a story of exploitation, slavery, and colonialism.
While the arguments of critics could be true, I would like to look at the positive side. I concur with the thesis of Niall Ferguson, that the 6 killer Apps of competition, science, property rights, medicine, consumer society, and work ethic are a good template for any nation to follow. Credit goes to the European nations for showing the rest of the world a path to redemption.