As prosperity becomes the global norm, expect a sea change in social values. 'Survival' values are waning and 'self-expression' values are gaining.
Although the United States remains stuck in the economic doldrums, it is fair to call these the best of times for the world as a whole.
Thanks to rapid growth in China, India, and other less-developed countries, recent decades have brought about greater improvements in material welfare than any corresponding period in history. According to the World Bank, 42 percent of people in less-developed countries lived in extreme poverty as of 1990. By 2005, the number had shrunk to 25 percent. Hundreds of millions of people have been liberated from the tyranny of acute scarcity.
IN PHOTOS: The Rising Global Middle Class
As poverty recedes, a new global middle class is emerging. Twenty years ago, the middle class - those who make between $10 and $100 a day - made up one-third of the world population. By 2006, it was closer to three-fifths, estimates economist Surjit Bhalla. That increase represents the crossing of a crucially important threshold: Disposable income has gone from the exception to the rule. For the first time ever, most people around the world can now make meaningful choices about their material surroundings.
Filling bellies, fulfilling egos
The rise of the global middle class will have a profound impact on the center of economic and political gravity, shifting it eastward and southward, from North America and Europe toward Africa, Latin America, and Asia. But just as important is the global cultural revolution that is now under way.
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For all of human history, beliefs, values, and social norms were adapted to a world of mass poverty - where choices were limited and generational change was imperceptible. As the new social reality of spreading affluence asserts itself, cultural transformation is unavoidable as attitudes and behaviors change to reflect the new conditions of expanding choice and accelerating change.
Recall the psychologist Abraham Maslow and his hierarchy of needs. "It is quite true that man lives by bread alone - when there is no bread," Maslow wrote in 1943. "But what happens to men's desires when there is plenty of bread and when his belly is chronically filled?" Other psychic needs come to the fore - including, ultimately, the need for "self-actualization" or realizing one's inner potential.
Maslow's analysis applies to societies as well. When capitalist wealth-creation carries a society past the threshold of mass affluence, at which point most people don't worry about meeting basic material needs, aspirations shift upward to quality of life and personal fulfillment. And any beliefs or practices that hinder the new quest for self-actualization tend to meet with increasingly stout resistance.
In this regard, it's important to recognize that economic growth isn't just about having more stuff. Growth also means development: the continuing discovery and development of human capabilities. Specifically, the richer and more advanced the economy grows, the more complex it becomes. That in turn triggers a rising demand for more highly skilled "knowledge workers."
The boom in human capital
The result is a global boom in what economists call "human capital." Adult illiteracy was cut in half between 1970 and 2005. And formal education levels are rising around the world. …