Zakaria goes on to say that this “This will not be a world defined by the decline of America but rather the rise of everyone else.” But the only way that sentence makes sense to me is if it means relative American decline.
Here’s the only problem with Zakaria’s thesis:
U.S. share of global economic output (on a purchasing power parity basis) has declined very slightly over the past twenty years – from about 21% to about 20%. But what has really happened over this period has been the rise of China and the rest of non-Japan Asia at the relative expense of Western Europe and Japan.
What Zakaria misses is that the relative decline of the U.S. is real, but that it already happened. U.S. share of world GDP in 1945 is estimated to have been about 50%; this more than halved between 1945 and 1980.
We live in the new economy that it has created. The danger of misdiagnosis of our current situation is that we will fail to understand the sources of our success and unwittingly throw them away.
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