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01
Nov
2009
3 Billion New Capitalists E-mail
Reviews - Books
Written by David A. Dayton
Better than Freidman’s “The World is Flat” because it has more research and less left-leaning political solutions. Clyde Prestowitz’s “3 Billion New Capitalists” is a more complex read and of more value since it looks at both the causes of America’s decline/Asia’s rise and the numbers behind the trends. While Freidman regales us with anecdotes, Prestowitz tries to overwhelm with statistics.

The two general themes make up the case for the potential fall of the US from world dominance and the rise of Asia, and to a lesser extent the EU and Brazil in it’s place. While Prestowitz groups these issues together, I think that there are really two different issues:

One is the fall of America and the Dollar from the top spot in the world economic-political hierarchy and the rise of Asia, and the Euro, in it’s place. The decline in the quality of American education, the lack of government support/encouragement for both economically strategic industries and maths and sciences gets most of the blame. Conversely, the willingness of other countries to see specific types of education and industries as keys to national security has made the “free trade” playing field anything but level.

The second issue is the environmental degradation that is changing the balance of economic powers—global warming, water pollution, over use of natural gas, oil and other natural minerals and metals. While this is certainly tied to the industrial revolution and the consumer culture of capitalism (e.g. the US) it seems to me to be a second, but parallel issue rather than part of a larger international financial shift to the East. Further, while the consumption doctrine must be laid at the feet of the US, there is no evidence that a Communists Russia or China would have been any more environmentally friendly. Indeed, I would argue that the great workers’ paradises have been and are more of an environmental disaster than the US.

Despite the organization, I agree with the doom for the US scenario. Education outside of University level is atrocious and I don’t want my kids in anything resembling public schools in the US. Also, long term planning in the US also seems to equate to a two term president rather than a view of decades that is more common in Asia. Finally, the rate of personal savings (oxymoron?) in the US and the national debt must be brought under control immediately. Regardless of the rise or fall of the rest of the world, these three issues must be resolved or the US as we know it will end for ever.

I have three specific problems with the conclusions. Prestowitz spends 250 pages convincing us that the world as we, American’s, know it is coming to a speeding and disastrous end. Yet he glosses over the one statistic that makes the American Dream still viable. In his chapter on Indian growth he lauds the fact that India has something that neither China, Brazil, Russia nor the EU have—a young population and a relatively high birth rate. This is one of the saving graces for the slower-than-the-Chinese-on-the-world-scene Indians. Yet this same demographic, when identified for the US has little or no potential value at all and warrants only a mention in passing. Indeed, by 2025 only India and the US will have median population ages under 50! The US at 40 and India at 37. If this is a long term saving grace for India, why not for the US as well?

Problem number two is the complete hopelessness of his solutions. He offers a number of things that should happen to reverse the trends, not just for the US but for the rest of the world as well—but almost every one has the caveat: “this probably won’t happen, but it should.” Well, how about realistic solutions? If there is no way that the US or other countries has the political appetite to change, proposing such solutions is of little or no value.

Finally, my question to Mr. Prestowitz and all the other US doomsayers (not that I disagree with their conclusions) is: so what if we’re not number 1 anymore?! I’m not sure that China, India, Brazil and EU with more power, more money and more education relative to the US is a bad thing. Sure we probably couldn’t invade Iraq unilaterally again, but if the Dollar is too strong, and the US needs more export markets, and competition for markets is really a good thing (like we’ve been preaching for the last 50 years), why is the rise of these other powers wholly bad? I live in China now—a stronger, more educated China with more money and more responsibility to the world community would not just be a good thing, it would be fantastic!

Certainly the US needs to save more and get out of personal and collective debt. We must, as global citizens, address the environmental problems that do not recognize political boundaries. US education needs to improve. But 3 billion new capitalists are going to play a role in shaping the decisions and actions of more than just the US government in the next 25-50 years. Great book, weak ending.


David A. Dayton is the CEO of Silk Road International (SRI), an U.S.-owned and managed international procurement agency based in China. Click here to visit SRI's Website.

Our valuable Editor David A. Dayton has been with us since Monday, 02 November 2009.

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