The Post-American World: Release 2.0 Read Online Free PDF Page B

accounted for over half of this global growth, and they now account for over 47 percent of the world economy measured at purchasing power parity (or over 33 percent at market exchange rates). Increasingly, the growth of newcomers is being powered by their own markets, not simply by exports to the West—which means that this is not an ephemeral phenomenon. Nor is it one that is easily derailed. The financial panics, recessions, and debt crises that have left much of the industrialized world dazed for the last three years were unable to halt, or even significantly slow, the ongoing expansion elsewhere.
    Some people dismiss such trends by pointing to the rise of Japan in the 1980s, when Westerners were scared that the Japanese would come to dominate the world economy. That turned out to be a phantom fear: Japan in fact went into a long slump, one that continues to this day. But the analogy is misleading. In 1985, Japan was already a wealthy nation. Many experts believed it was on track to unseat the United States as the largest economy, but because Japan’s markets, industries, institutions, and politics were still not fully modernized, the country could not make that final leap. China, by contrast, is still a poor country. It has a per capita GDP of $4,300. It will certainly face many problems as and when it becomes a first-world country. But, for the foreseeable future, it will surely manage to double the size of its economy just by continuing to make toys and shirts and cell phones. India, starting at an even lower base income, will also be able to grow for several decades before hitting the kinds of challenges that derailed Japan. Even if China and India never get past middle-income status, they are likely to be the second- and third-largest economies in the world for much of the twenty-first century.
    It is an accident of history that, for the last several centuries, the richest countries in the world have all happened to have small populations. The United States was the biggest of the bunch by far, which is why it has been the dominant player. But such dominance was possible only in a world in which the truly large countries were mired in poverty, unable or unwilling to adopt policies that made them grow. Now the giants are on the move, and, naturally, given their size, they will have a large footprint on the map. Even if the average person in these countries still seems poor by Western standards, their total wealth will be massive. Or to put it in mathematical terms: any number, however small, becomes a large number when multiplied by 2.5 billion (the approximate population of China plus India). It is these two factors—a low starting point and a large population—that guarantee the magnitude and long-term nature of the global power shift.
    The Three Forces: Politics,
Economics, and Technology

    How did all this come to be? To answer that question, we have to go back a few decades, to the 1970s, and recall the way most countries ran their economies at the time. I remember the atmosphere vividly because I was growing up in India, a country that really didn’t think it was playing on the same field as the United States. In the minds of India’s policy and intellectual elites, there was a U.S.-led capitalist model on one end of the spectrum and a Soviet-led socialist model on the other. New Delhi was trying to carve a middle way between them. In this respect, India was not unusual. Brazil, Egypt, and Indonesia—and in fact, the majority of the world—were on this middle path. But it turned out to be a road to nowhere, and this was becoming apparent to many people in these countries by the late 1970s. As they stagnated, Japan and a few other East Asian economies that had charted a quasi-capitalist course succeeded conspicuously, and the lesson started to sink in.
    But the earthquake that shook everything was the collapse of the Soviet Union in the late 1980s. With central planning totally discredited and one end of the