Fuelling the Rise of the Anglosphere
James C. Bennett’s The Anglosphere Challenge claimed that ‘the English-speaking nations will lead the way in the twenty-first century’. Bennett’s contention was that the cultural values endemic across what he termed the ‘Anglosphere’ economies would, via the influence of the Internet’s information highway, prove to be the Next Big Idea.
We only have to review the roots of the Arab Spring to see what Bennett meant in practice, with millions demanding the overthrow of medievalism and dictatorial repression. But I would add that Bennett’s thesis does not depend solely on the ‘influence of the Net’. In the wake of the collapse of the Iron Curtain and global communism, we are now also privy to the collapse of the Gallic culture-inspired European socialist ideal; as the attempt to knit together wildly differing cultures and economies into a homogenous whole begins to unravel. In the face of this, for all its current economic woes, free market capitalism, especially in its Anglosphere form, looks to be a far more culturally stable and durable, wealth-creating, proposition, further buttressing Bennett’s case. But even Bennett did not predict that the rise of the Anglosphere economies could be turbo-charged via an entirely unexpected dynamic: vast new domestic energy wealth – in the shape of shale and deepwater oil and gas, and oil sands – across leading Anglosphere nations.
Demographics and Investment
In a recent report Goldman Sachs identified two key elements, demographic trends and high investment, which are colluding to send three ‘Anglosphere’ countries – the US , Canada and (surprise, surprise) the UK – to the top three spots in the per capita prosperity hit parade by 2050. Though the report does not major on the energy resources coming online for all three, the infusion of world class domestic oil and gas discoveries only bolsters the Goldman Sachs report’s case.
But the biggest surprise in the Goldman Sachs assessment is that Britain, currently the third largest economy in Europe and sixth in the world, is on course to eclipse Germany and France to become Europe’s largest economy within four decades. According to Goldman Sachs, Britain’s working population is on course to outstrip that in Germany and France by 2050. As Ruth Lea, Economic Advisor to the Arbuthnot Banking Group, observes, “Given Europe’s demographic trends, this is not unfeasible”. She also tellingly notes that, on both counts, “European economies are slipping down the ranks”. Neither is Goldman Sachs alone in its assessment. The UN and the US Population Reference Bureau also confirm that Britain’s population is set to become the largest in Europe by 2050.
The HSBC Bank’s The World in 2050 report further predicts that the British rate of economic growth will, as a consequence of its demographic changes, outstrip that of the US, France and Japan, moving the UK back into surplus by 2020. Not that the British and Canadian economies will eclipse others in terms of sheer size. According to the latest IMF figures, Britain has recently been edged out of its sixth largest world economy ranking by Brazil. And by 2050, according to Goldman Sachs, the British economy is likely to have slipped to ninth in the world rankings. But when it comes to that which really matters, countries with the highest GDP per capita, it is a whole other story.
According to the Goldman Sachs report, the only two more prosperous nations in terms of per capita wealth in 2050 will be the United States and Canada. Again, while the economic outlooks referred to don’t major on energy discoveries, it is notable that all three, the US, Canada and Britain, are re-appraising domestic energy policies to take advantage of vast hydrocarbon resources; although President Obama is certainly doing his best to slow down the impact fossil fuels could have on the US domestic economy.
The impact of US shale gas – and prospectively shale oil – on domestic energy prices and in pegging back global prices, has already been nothing short of a revolution. Canada is not hanging around waiting for its southern neighbor to re-think its Keystone Pipeline strategy, but is already looking to sell much of its vast oil sands resource on the Asian market. Both the US and Canadian markets have also seen significant investment in their domestic energy markets, not least from cash-rich Chinese energy companies.
In Britain, North Sea oil and gas is a resource that just refuses to quit. Indeed, inward investment into Britain’s North Sea energy industries for 2012 already stands at a record breaking lb7.5 billion. But Britain now appears to have a world class shale gas resource that could match, or even eclipse, its entire North Sea resource. Add to this the fact that oil prospects in the Falklands Basin are set to triple the country’s reserves, and Britain’s commitment to developing domestic resources leaves the rest of Europe cold (perhaps literally). Meanwhile, Britain may have been at the forefront of the ‘renewable revolution’, but it is also among the first to feel the ‘democratic’ backlash of an electorate angry at soaring energy bills. Currently, one hundred conservative MP’s are demanding an end to wind farm construction and wind farm subsidies altogether. The British Government is also attempting to slash its over-generous solar and heat pump subsidy regimes.
In stark contrast across the rest of Europe, the EU’s Energy Roadmap continues to promote expensive decarbonisation programs, renewable energy subsidies, and anti-fossil fuel policies, even though they have already forced millions into fuel poverty. France has banned hydraulic fracturing (“fracking’), preventing development of its own domestic shale gas industry. Germany’s ludicrous knee-jerk ‘green’ reaction to Fukushima has been to close its nuclear power plants prematurely. In Britain, however, the government has consistently rejected calls for a moratorium on fracking, and it has just announced a major deal with EDF to build the first of a series of new nuclear power plants. Just for good measure, Britain also showed its commitment to its national deepwater drilling program around the Falkland Islands when it dispatched military hardware to the southern Atlantic to call Argentina’s sabre-rattling bluff (1).
Clearly, there is a gulf of difference between how leading Anglosphere economies are handling the unexpected new hydrocarbon revolution on their doorsteps and how they are being handled by more ideological, less pragmatic, EU-strait-jacketed, European states.
According to James Bennett:
The Anglosphere is more than the sum of all persons who have learned the English language. To be part of the Anglosphere implies the sharing of fundamental customs and values; rule of law; honoring of covenants; in general, high trust characteristics described by Francis Fukuyama in Trust: The Social Virtues and the Creation of Prosperity … The Anglosphere shares a narrative in which Magna Carta, Bill of Rights, trial by jury, “innocent until proven guilty” and “a man’s word is his bond” are common themes.
The cultural ideals listed for the Anglosphere are the antithesis of many of those experienced under European-style socialism. Clearly, demographic trends show that people increasingly want to live where greater personal freedoms are guaranteed. Equally business investment flourishes where free market capitalism, not ideological government writ, still calls the shots.
If the noble ideals Bennett identifies are fuelling the Anglosphere’s increasing per capita wealth, early investment in new domestic energy development will only mean one thing: more power to it.
(1) It is less than widely understood that Argentina has never held sovereignty over the Falkland Islands (Las Malvinas). Spain originally held the islands before Argentina was founded.