Crumbling Empires

As my favorite philosopher Marcus Aurelius said: “Look back over the past, with its changing empires that rose and fell, and you can foresee the future”.
While in the past empires rose and declined over several hundred years, lately, these cycles have taken 100-150 years.
With China and India dominating the world until the 19th century, the fall of the British Empire in the 20th century, the US rising to power and the reemergence of Eastern Asia; the past 300 years have seen empires crumble and new one rise.

past 500 yrs
Source: Bridgewater

A closer look:

• In 1820 China and India were the biggest economic powers. Their shares declined as they became less productive and overly indebted. As a result they were overtaken, both economically and militarily by the emerging British Empire in the late 19th and early 20th century.

The 1800s were not kind to China:
In 1850, the Taiping Rebellion (1850-64) started by a frustrated school teacher, Hong Xiuchuan. He claimed he had a vision from a man with a golden beard who told him that he was the younger brother of Jesus Christ.
He became a “celebrity” as we like to call them in the 21st century.
His movement swept over much of China and at one point he ruled over 1/3 of the country. The government finally crushed it with foreign help. It was one of the deadliest conflicts in history, killing twice as many people as World War I. Adding to China’s misery during this chaos was the Second Opium War (1856-60) fought against Britain and France.

• During the second half of the 19th century until the early 20th century England and other Western European countries emerged to become the world’s dominant powers and the United States moved from being an undeveloped country to an emerging one. The emergence of the British Empire and other European powers to dominance was fueled by the Industrial Revolution.

The British Imperial Century (1815-1914):
After their victory over Napoleon, Britain enjoyed a century of dominance called Pax Britannica. Becoming the largest empire of all time, they played the role of the policeman of the world and controlled the economies of many countries (Ring a bell?)


• During 1914-1945, the British Empire expanded relative to other Western European countries but lost to the Emerging United States. Two world wars starting in Europe led European nations to be highly indebted and crippled. Although the British emerged victorious, their high debt was a big burden and the US was able to steal the spotlight with its great productivity gains.

US past 100 yrs

• After World War II until the beginning of the 21st century, the US remained the dominant power, although its share declined as other countries started to reemerge.
From 1950 to 1970, Germany and Japan were back in the game. Also, Latin America had extraordinary growth due to the commodity boom. After 1980, China and India opened their economies and were able to grow strongly. Albeit, corruption is still very much part of their culture.
An article in the WSJ on 26-09-2013 reported about India: “A nationwide survey conducted in July by the Association for Democratic Reforms, a New Delhi-based advocacy group for transparency in governance, suggested nearly one-third of the lower house of Parliament, or Lok Sabha, and an almost equal number of state legislators, have criminal cases, including kidnapping, robbery, murder and rape, pending against them. The findings indicated that if a politician faced a criminal conviction or charge they were almost twice as likely to be elected in India as those with clean records.”

Today, we are seeing a new kind of market emerge. They are called the Frontier Markets and they include*: Lebanon, Argentina, Bahrain, Tunisia, Vietnam, Nigeria, Qatar… Read my article “The Qatarful Nations” for a peek into a future empire.

Empire cycles are due to many different factors: productivity growth, debt cycles, other shocks and distortions (wars, natural resources discoveries, political shifts, good/bad policies…). And although in the short term, dire times and empires crumbling may seem like the end of the world, always remember: It will get better.

Georges Boustany

*Frontier Markets:


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3 responses to “Crumbling Empires”

  1. Anonymous says :

    Good article.

    “Hope is definitely not the same thing as optimism. It is not the conviction that something will turn out well, but the certainty that something makes sense, regardless of how it turns out.”
    Vaclav Havel

  2. Kamo says :

    Very interesting. Would be nice to get more details, You missed quite a few other big empires.

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