America’s Changing Place in the World

The 20th Century will be remembered as the American century. In 1900, Britain was the one truly global superpower in every way. At the turn of the millennium, it was the United States. Eight short years later, that’s changing. This month, Fareed Zakaria of Newsweek releases his new book The Post American World. It’s a great chronicle of how the decline in the relative standing of the US in the world community. As he says up front “This is not a book about the decline of America, but rather about the rise of everyone else.”

Zakaria isn’t the first to comment on the comparative rise and fall of nations. Paul Kennedy of Yale and the LSE wrote about it from a political & economic perspective in his 1987 book, “The Rise & Fall of The Great Powers: Economic Change and Military Conflict From 1500 to 2000”. Michael Porter of Harvard wrote about it from an economic perspective in a 1990 Harvard Business Review article. He later developed these ideas into a book. What makes Zakaria’s commentary so relevant is the historical context.

Britain’s power was predicated on a traditional model of imperial rule. As they saying of those days went, “The sun never set on the British Empire”. America’s power has been different. To be sure, the US has fought many times on foreign soil. Spectacular victories in two world wars were followed by a stalemate in Korea and a loss in Vietnam. Yet the Americanisation of Europe and Asia (to say nothing of Latin America) have been more cultural and socio-economic than political. Even in Japan, where Gen. Mc Arthur wrote the constitution for the new de-militarised nation, the Japanese seemed to Americanise their nation themselves and over time. They were not a colony later given “home rule” in the sense that Britain ruled India.

The emerging global culture of the late-20th century is distinctly American. It has all the hallmarks of US middle-class consumer society. It embodies the aspirations of the American dream – upward social and economic mobility. It has localised flavours – particularly in India and China – but it is surprisingly uniform across the emerging middle-class of an increasingly urbanised world. What began with Coca-Cola and hamburgers has become a global phenomena; a kind of Pax Americana.

This global form of the American Dream is under severe and increasing threat. The War on Terror and the terrorism that precipitated it is only one sign. American standing abroad is as low as it’s ever been. American economic and financial influence is waning rapidly. Their cultural leadership of the 20th Century is yielding to new forms of emerging culture. Most visibly, American consumerism is no longer the aspirational goal for many people. The excesses of American society – economic, social and political – are all too visible to the rest of the world now.

To be sure, Zakaria is right. China & India have accelerated past the US. Japan did almost as well in the years after the Second World War. Today, the US grows at 3-5%; China’s growth is at 10-12%. The way America overtook Britain in the 20th Century is the same as the way China & India will overtake America in the 21st Century: growth. Here’s a historical comparison of growth and a GDP forecast (in 2003 dollars) going forward to 2050:

Picture1    Picture2

The message is clear. Over the 50 years 2000-2050, American GDP is set to triple while China’s grows by 40 times to exceed America’s. In the same time, Indian GDP will approach that of the US and exceed Japan & Germany’s combined by over 250%.

Whilst America (and Europe) are under economic siege from China & India, this is only part of the story. In the two generations ahead, China & India will produce billions of new middle-class consumers. Together with the rest of the emerging economies in Brazil, Russia and elsewhere, this may approach 3 billion new consumers in the global market. Assuming UN population forecasts, this means an additional 30% of humanity will become middle-class, urban consumers – many for the first time in history. This is the essence of the issue Zakaria discusses: hyper-growth in socio-economic mobility.

The cultural, political and environmental dimensions of this are staggering. In a world of 9-10 Billion people in 2050, two-thirds to three-quarters may live in cities. 4.5-5.0 Billion of these may live middle-class consumer-society lives. Only 400-450 million of them will be American. Fewer than 700 million of them will be European. Many of the remainder will be Chinese, Indian, South American, Arab and African.

As Gandhi once said of the British in India, “300 thousand Englishmen cannot control 300 million Indians…”. Perhaps, in the same way, 400 million Americans cannot control 4 Billion other middle-class people…



About Fred Pugsley

AI & Quantum guy. Foodie, skier, voracious reader.
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9 Responses to America’s Changing Place in the World

  1. Ethan says:

    While I agree that much of what is said is true, or will be, you still can not overlook the fact that no one is busting down the doors to get into China, India, or Africa, etc…  America (and Australia for that matter) is still perceived as the promised lands, and I do not see this changing anytime in the near future. I look forward to reading Mr. Zakaria’s book for further insight.

  2. Fred says:

    Looks like this a popular theme. It appeared in The Economist this week.

  3. Sarah says:

    Zakaraya’s book is indeed a new insight in many respects.However the fact that the rapid economic growth and improvement consciousness in China and India is giving us future bells  and telling that the world economy lies with China and India. Their GDP and GNP have  a incredible  percentage increase during the last five years . Sarah

  4. Unknown says:

    Europe too will lose out in the new "India and China" age – not just the US, and of course this includes Australia, and Japan, and our neighbours.
    The US is losing its global leadership position economically and politically at an alarming rate, and yet despite mistakes, the US has contributed to era of common sense, or at least a degree of stability on human and moral issues (as apposed to terrorism/dictatorship/fundementalism) and most powerful members of the United Nations would fall into the "stable" camp.
    Economically, the US and Europe have enabled (are paying for) India and China’s growth through the greed of commercial enterprise. Handing manurfacturing and Information technology on a plate (offshoring) to save a few bucks sure does speak volumes of how short sighted western business (and political) leaders are. The trouble with commerce is uncontrolled greed – wasn’t it Marx that said, capitalism will eat iteslf out of existance – isn’t that what is beggining in front of our eyes right now?
    However, there is a much bigger problem than the failing Western Nations financial and political position facing the world – its not even global warming!
    It is the worlds’ grotesque over-population, now set to enter the most dangerous level ever – we are consuming the world out of existance right now – add a few billion more Indians and Chinese and game over! The Ghandi comment truly unmasks India’s view on the rest of the world, "we out number you, you will, sooner or later be under our thumb" of course, by then there will be nothing left to argue about!
    Not sure how your readers will enjoy the new world order, I personally believe there will be a world war three, probably over oil, or farming land, or any excuse, because in reality, humanity has progressed little sinse the dark ages, like the cavemen, we still fight for what "they"have got, that we haven’t!.
    Total silence from the United Nations, our politicians, nothing in the bible, or Koran about what we should do about over-population, or global warming! And very sadly, from our beautiful little planet’s perspective, and all its living creatures, anything that can reduce the human population would be a positive for global survival!  The human race is sure facing a challenging time – and we are all to blame.

  5. Fred Pugsley says:

    This year, Chris Giles from the Financial Times reports an acceleration in the transition:

  6. Fred Pugsley says:

    The BBC’s Richer World confirms 7X growth in China and 3X growth in India…

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