The Post American World

Fareed Zakaria “The Post American World: Release 2.0”  W.W. Norton & Co, 2011, 285 pp.

Here, again, is a must read book.  The thesis is not that America is sinking—rather; it is that others are rapidly rising.  The challenge to America is to adapt to a world it no longer dominates. 

There have been three tectonic power shifts over the last five hundred years, fundamental changes in the distribution of power that have reshaped international life. The first was the rise of the Western world, a process that began in the fifteenth century and accelerated dramatically in the late eighteenth century.  It produced modernity as we know it: science and technology, commerce and capitalism, the agricultural and industrial revolutions.  It also produced the prolonged political dominance of the nations of the West. The second shift was the rise of the U.S. in the closing years of the nineteenth century.  For the last twenty years the U.S. dominance has been unrivaled, a phenomenon unprecedented in modern history. And, lastly, we are now living through the third great power shift of the modern era.  It could be called “the rise of the rest.”  (Pg. 1).  The 2008 financial crisis turned the world upside down, stalling the United States and other advanced economies. Meanwhile emerging markets have surged.

My Notes:

Pg. 12:  Al Qaeda is already splintering.  It has morphed into an anti-Shiite group, espousing a purist Sunni worldview.  The late al-Zarqawi, the head of Al Qaeda in Mesopotamia, bore a fierce hatred for Shiites derived from his Wahhabi-style puritanism.  As a result, a movement that had hoped to rally the entire Muslim world to jihad against the West has been dragged into an internal war within Islam.

Pg. 19:  Across the world, economics is trumping politics.  What Wall Street analysts call “political risk” is almost nonexistent.  Wars, coups, and terrorism have lost much of their ability to derail markets more than temporarily.  This may not last, but it has been the world we have lived in for at least a decade.

Pg. 27:  With the arrival of big ships in the fifteenth century, goods became mobile.  With modern banking in the seventeenth century, capital became mobile.  In the 1990s, labor became mobile.  People could not necessarily go to where the jobs were, but jobs could go to where people were: examples include programmers in India, telephone operators in the Philippines, and radiologists in Thailand. The cost of transporting goods and services has been falling for centuries.  With the advent of broadband, it has dropped to zero for many services. 

Pg. 39:  The presidential campaign trail throughout 2007 and 2008 harping on the need to lessen anti-Americanism were somewhat off-point.  The world is moving from anger to indifference, from anti-Americanism to post-Americanism.

Pg. 40:  The traditional mechanisms of international cooperation are relics of another era.  For instance, the U.N. system represents an outdated configuration of power.  The permanent members of the UN Security Council are the victors of a war that ended sixty years ago.  The body does not include Japan or Germany, the world’s third- and fourth-largest economies, or India, the world’s largest democracy, or any Latin American or African country.  Then there is the G-8 and the IMF.

Pg. 41:  The nation-state is a relatively new invention, often no more than a hundred years old.  Much older are the religious, ethnic, and linguistic groups that live within nation-states.  And these bonds have stayed strong, in fact grown, as economic interdependence has deepened. 

Pg. 43: It is worth remembering how unprecedented the financial crisis events of 2008 and 2009 were: the destruction of approximately $50 trillion in assets in the global economy; the nationalization of America’s largest mortgage lenders; the largest bankruptcy in history (Lehman); the disappearance of the investment bank; bailouts and stimulus packages around the world adding up to trillions of dollars. 

Pg. 66:  Between 1350 and 1950—six hundred years—GDP per capita remained roughly constant in China and India (hovering around $600 for China and $550 for India).  In the same period, Western European GDP per capita went from $662 to $4,594, a 594 percent increase.

Pg. 68:  With the revolution in thought that is termed the Renaissance, men like Copernicus, Vesalius, and Galileo gave birth to modern science.  The hundred years between 1450 and 1550 marked the most significant break in human history—between faith, ritual, and dogma, on the one hand, and observation, experimentation, and critical thought, on the other.  And it happened in Europe, pushing that civilization forward for centuries. 

Pg. 73:  Why did non-Western countries stand still while the West moved forward?  Although there is no neat answer, private property rights, good institutions of governance, and a strong civil society (that is, one not dominated by the state) were clearly crucial for growth.  In contrast, the Russian czar theoretically owned his entire country.  In China, the Ming court was run by mandarins who disdained commerce.  Almost everywhere in the non-Western world, civil society was weak and dependent on the government.

Pg. 86:  In the next few decades, three of the world’s four biggest economies will be non-Western (Japan, China, and India).  And the fourth, the U.S. will be increasingly shaped by its growing non-European population.

Pg. 113:  The author proposes that capitalism creates a middle class and this leads to democracy.  This has happened from Spain and Greece to South Korea, Taiwan, and Mexico: countries that marketize and modernize begin changing politically around the time that they achieve middle-income status.  (He does not mention Germany’s and Italy’s transformations to fascism).

Pg. 174:  According to the 1968 Nuclear Nonproliferation Treaty, a country that had nuclear weapons in 1968 is a legitimate nuclear-weapon state, and any country that developed them later is an outlaw.  (It was the mother of all grandfather clauses.)  India which exploded a nuclear device in 1974, is the most important country that lies outside the nonproliferation system. 

Pg. 197:  The U.S. economy has been the world’s largest since the middle of the 1880s, and it remains so today.  It has held a constant share of global GDP.  With the brief exception of the late 1940s and 1950s—when the rest of the industrialized world had been destroyed and America’s share rose to 50 percent!—the U.S. has accounted for roughly a quarter of world output for over a century (32 percent in 1913, 26 percent in 2007). It is likely to slip but not significantly in the next two decades. [Of course the output will shift from manufacturing to service industries]

Pg. 233:  The economic dysfunctions in America today are the consequences of specific government policies.  A set of sensible reforms could be enacted tomorrow to trim wasteful spending and subsidies, increase savings, expand training in science and technology, rationalize the tax code, create a workable immigration process, and achieve significant efficiencies in the use of energy.  (Author excludes health care from list because it is a more difficult fix and the American political system has lost the ability for large-scale compromise, and it has lost the ability to accept some pain now for much gain later on.).

Pg. 234:  The U.S. as it enters the twenty-first century has developed a highly dysfunctional political system.  It has an antiquated and overly rigid political system that has been captured by money, special interests, a sensationalist media, and ideological attack groups.  The result is a ceaseless, virulent debate about trivia—politics as theater—and very little substance, compromise, and action.  A “can-do” country is now saddled with a “do-nothing” political process, designed for partisan battle rather than problem solving. 

Pg. 276:  America has become a nation consumed by fear, worried about terrorists and rogue nations, Muslims and Mexicans, foreign companies and free trade, immigrants and international organizations.