A few days ago I was having lunch with my friend and colleague Frank Anderson (despite the name similarity, he is no relation to “my” Frank, who is Frank Henderson). Since both Frank A. and I love to talk, we were both going on at high speed about the presidential election, politics, the economy, oil prices, you name it. In between bites of Thai food (Thai Spice in Fort Lauderdale – great food, great atmosphere, great service) we both carried on at quite some length about the need for our country to switch to some other fuel source rather than oil.
Having recently finished reading Fareed Zakaria’s new book, The Post-American World, I felt flush with knowledge about the current world economy, and I pontificated at length about how I thought we should go about “getting rid of oil”. Frank A. and I both agree on the basics: Rather than spending money on ridiculous, pointless wars just so we can have leverage over some oil supplies, why not spend the same money and encourage a full-on switch to ethanol or biodiesel? It’s a discussion we have had several times, and we’re both enthusiastic about the topic.
The state of the world we live in – and our place in that world – is on a lot of people’s mind these days. And that is the subject matter of The Post-American World. Despite the first impression that one might get from the title, this is not a book about the decline and/or fall of America or even the American way of life. Instead, what this book is about is the rise of the rest. It is, in fact, actually a very optimistic book, laying out a very logical path for how the rest of the 21st century might come to pass.
I’ve respected Fareed Zakaria for a few years now. He first came to my notice as a columnist in Newsweek . Later, I started to see him on a couple of the Sunday morning talk shows here and there. And more recently he starting making occasional guest appearances on The Daily Show with Jon Stewart. Zakaria is an enthusiastic, highly intelligent student of the world stage, and I’ve always found his opinions to be pretty well thought out and on the mark.
Zakaria belongs to the Realist school of geo-political thought, a camp in which I count myself as well. Unlike Conservatism, Neo-Conservatism, Liberalism, Socialism or any other current ideology, Realism tries its very best to discover and deal with the world as it really, truly is. No idealism, no ideology, just plain, straightforward analysis. Exactly why are people doing what they are doing? What are the real driving forces behind various actions? What’s the most logical outcome, based on what we know has actually happened before? Realism strives to avoid wishful thinking, and concentrate solely on how things actually work in the real world.
The Post-American World is divided up into seven chapters, each dealing with a particular main theme. Two of the chapters, “The Challenger” and “The Ally” deal with China and India respectively. The first chapter, “The Rise of the Rest”, lays out the overarching philosophy of the book.
The cold war is over. We won. Or, more specifically, the economic system of capitalism won and the economic system of communism lost. For decades, we in the West had been preaching that free markets, stock exchanges, a strong currency, and an open economy were the best way to bring prosperity to any country or region. The rest of the world finally agreed. And once they agreed, they began to work at a feverish pace to make up for past mistakes and to catch up with the West.
For the last 30 years, and especially in the last 20 since the fall of the Soviet Union, Communism as an economic system has pretty much ceased to exist. Every country in the world is now trying as hard as it can to acquire all of the same economic benefits that the United States and other Western states has had for over a century. And, with the ability to study our very well documented history, they are able to do a very good job of it.
In Chapter 4, “The Challenger”, Zakaria outlines how China has done this. 30 years ago, China had 800 million people living in poverty. Today, it has 400 million – and the population is the same size. That’s 400 million people who have moved into the middle class in just 30 years. China has the 2nd largest economy in the world. It has a population of 1.3 billion people, almost 4 and a half times that of the United States. And China remains “communist” only in the sense that the ruling party still uses that name. Their economy is almost completely market driven, with private property, a strong currency, stock markets and exchanges, the works.
Thanks to their robust economy, China now supplies the World, as anyone who has shopped at Wal-Mart in the last decade can clearly see:
Wal-Mart imports about $18 billion worth of goods from China each year. The vast majority of its foreign suppliers are there. Wal-Mart’s global supply chain is really a China supply chain.
What I found most educational in this chapter was how the Chinese people feel about all this. They are an intensely patriotic people, very proud of their country and their accomplishments. Unlike the rest of the world, they just don’t see much of a problem in having an authoritarian form of government. Their attitude seems to be: I have a great job, a nice house, money to spend, and my children are living in the fastest growing economy in world history. Who cares if we don’t have freedom of speech, or elections?
In fact, the vast majority of Chinese see their form of government as a strength, not a weakness. They want an interstate system? No problem. Since there is no opposition, the government simply decrees “let’s have one”, and in five years… viola! For the most part, the Chinese think we’re the ones with the wrong political system – even though they agree with us completely on the economic system.
Chapter 5, “The Ally”, talks about India. Zakaria himself is originally Indian (he is naturalized U.S. citizen now), so he has a very good perspective on this. In much the same way that China has thrown off the shackles of communism, India is throwing off socialism. China now supplies the world with goods; India is positioning itself to supply the world with services. Why, you wonder, is India so well suited for this?
But more important is the fact that Indians understand America. It is a noisy, open society with a chaotic democratic system, like theirs. Its capitalism looks distinctly like America’s free-for-all. Many urban Indians are familiar with America, speak its language, and actually know someone who lives there, perhaps a relative.
For the rest of the book, Zakaria talks about how America can best take advantage of this new world reality. Sure, we’re still the strongest in military terms, and very likely we always will be. No other nation on earth is interested in spending the kind of money it would take to match us in that area, not even Russia. The rest of the world has learned from our mistakes, and is slowly trying not to repeat them. A strong economy beats a strong military any day of the week.
Towards the end of the book, Zakaria discusses the “smile curve”, so-called because it’s a simple U-shaped curve, like the smile on the “Have a Nice Day” happy face symbol. Picture a curve that starts on the left, curves down into a smile, and curves back up to the right:
At the top left of he curve one starts with the idea and high-level industrial design – how the product will look and work. Lower down on the curve comes the detailed engineering plan. At the bottom of the U is the actual manufacturing, assembly, and shipping. Then rising up on the right of the curve are distribution, marketing, retail sales, service contracts, and sales of parts and accessories. In almost all manufacturing, China takes care of the bottom of the curve and America the top – the two ends of the U – which is where the money is.
In other words, if we concentrate on what we do very well – education (the entire world values our universities as the best in existence), design, engineering , open immigration – and let the rest of the world do what it does best… then America can continue to ride high. America excels at the areas on both ends of the curve, which, after all, is where all the profit is to be made. So, we should stop whining about losing manufacturing to the rest of the world: There is simply not much profit in manufacturing. Get over it and move on. Let the rest of the world take care of that part.
I highly recommend The Post-American World. In fact, I’d say that anyone who works for a living should read it cover to cover. Zakaria has a great prose style; the book is a pleasure to read in addition to being highly educational. Especially at the moment, when we’re all caught up in the silly sport of a Presidential election, and people are complaining about using phrases like “putting lipstick on a pig”, it’s highly refreshing to read and appreciate a calm, cool, well-written tour of the actual world we live in, and our place in it.