Thirty years ago, the United States dominated the world politically, economically and scientifically. But today?
"The tallest building in the world is now in Dubai, the biggest factory in the world is in China, the largest oil refinery is in India, the largest investment fund in the world is in Abu Dhabi, the largest Ferris wheel in the world is in Singapore," notes Fareed Zakaria. "And ... more troublingly, [the United States is] also losing [its] key grip on indices such as patent creation, scientific creations and things like that — which are really harbingers of future economic growth."
Zakaria, the host of CNN's Global Public Square (GPS) and an editor at large for Time magazine, charts the fall of America's dominance and the simultaneous rise of the rest of the world in his book The Post-American World: Release 2.0, which shows how the collapse of communism and the Soviet empire — as well as the rise of global markets — has leveled the playing field for many other countries around the world.
"The result is you have countries all over the world thriving and taking advantage of the political stability they have achieved, the economic connections of a global market, the technological connection into this market," he tells Fresh Air's Terry Gross. "And we are all witnesses to this phenomenon."
America, Zakaria says, is also starting to lag behind other countries in education, building a competitive workforce, and fostering new energy and digital infrastructure to support those workers — all markers of long-term economic growth. He says America is now heading toward what he calls a "post-American" world, in which the United States' share of the "global pie" is much smaller — as the rest of the globe begins to catch up.
"In economic terms, the rise of the rest [of the globe] is a win-win," he says. "The more countries that get rich [and] the larger the world economy, the more people there are producing, consuming, investing, saving, loaning money. ... If we didn't have the rest of the world growing, the United States economy would be in much worse shape than it is today."
But Zakaria cautions that the economic growth around the world — and the benefits that global economic stability create — do not extend to the political arena.
"Politics and power is a realm of relative influence," he says. "So as China expands its role in Asia, whose role is diminishing? Of course, the established power — the United States. It's not possible for two countries to be the leading dominant political power at the same time."
America's political system, Zakaria says, becomes mired in debate and cannot deal with the short-term deficit. "To put it in perspective, if Congress were to do nothing, the Bush tax cuts would expire next year," he says. "That by itself would yield $3.9 trillion to the federal government over the next 10 years. We would go to the bottom of the pack in terms of deficit as a percentage of GDP among the rich countries in the world — we would basically solve our fiscal problems for the short term."
On the U.S. economy
"We have the leading companies and the leading sectors in the advanced industrial world, we have an incredibly dynamic society, and we have high levels of entrepreneurship. And we have the best universities in the world. ... We also have impeccable credit. What we don't have is a political system that can take the simple measures to deal with our short-term deficit."
On what might happen if the U.S. defaults on debt
"I tend to think it will be catastrophic. I think, more importantly, there is a high enough risk here that this is surely a game we don't want to play. ... There are events that economics call low-probability, high-impact events that you don't want to test. You don't want to see if this is one of those things that is an unlikely situation but once it happens could have a huge seismic global effect, because then the cost of dealing with the after-effects is just cataclysmic."
On the government's role in innovation
"We have this debate in America that is almost a theoretical debate about the role of government in the economy and whether government should be involved, and I worry that while we're having this theoretical debate, on the other side of the world, the Chinese government is vigorously promoting industry after industry, the German government is vigorously promoting its manufacturing center, the South Korean government is vigorously promoting its manufacturing sector — and by the time we've resolved our debate, there won't be any industries left to compete in. It is absolutely clear that government plays a key role, as a catalyst, in promoting long-run growth."
"Germany is a fascinating role model. The Germans have maintained their manufacturing edge despite being a high-tax, high-regulation economy. Why? Because the government really set about ensuring that it maintained funding for technical training, technical advancements and programs. It made a concerted effort to retain high-end, complex manufacturing — the kind of BMW model, if you will. And they've done that so successfully that Germany, which has a quarter of America's population, exports more than America does."