An interesting post written by Joseph Lazzaro on Tuesday indicated that many economists think that the economies of Brazil, Russia, India and China, known as the BRIC economies, will supplant the United States and European nations in terms of world power and economic strength. While this may be true to a degree, I have a message for those emerging economic powerhouses: they had better be careful.
Dear Brazil, you have resources you can't yet even contemplate. However, you have been whacking through your opportunities at a very rapid pace. You have no idea about what political powers you should align yourself with. Can you reign in your pirates, your poachers, your drug lords? Can you effectively protect even just one of your trees?
Dear Russia, you scare me. The world knows more of your organized crime than it knows of your present government. You move more capital through your black markets than through your own ports. You turn your backs on true enterprise in exchange for quick profit.
Dear India, are you aware that the improvement you now see is just a thin mask over the face of exploitation? If you could see the contrast between what you should have and what you are getting, you'd be ashamed that you're selling yourself so cheaply. You are the target of corporate fat cats who have placed their bets on your hunger. They seek to bring us to your past, rather than to bring you to our present.
Dear China, you are a military communist power, playing a free market capitalist game. You have the strength to build yourself up, yet you have no idea how to compassionately police economic freedom. As your people become accustomed to the release from shackles that prosperity brings, will you be able to keep their growing minds satisfied and complacent in your 40-year old Chairman Mao framework? How long can you hold them at bay with your good intentions?
It may be true that world economic power is shifting. It may be true that world politics will be forced to adjust in reaction to new growth and investment. Today isn't the 1800s, or 1950, or even 1994. Simple logic and history will tell you that healthy economies don't move out and move on, especially so when new growth is more than ever dependent upon established strengths.
New economic growth is necessary and welcome, wherever it may happen. Perhaps someday the term "third world" will be a term long forgotten. Yet the one mistake which could bring the entire world economic growth proposition to an immediate screeching halt would be the single mindless error of forgetting exactly who it is that has been writing the checks for so long. A tree cannot grow strong new branches as it withers at the root.
Gary Sattler is a freelance, free market blogger and patriot.
Reader Comments (Page 1 of 1)
6-18-2008 @ 9:15PM
Aravind said...
He conveniently chooses to forget who is feeding the current growth in US: Chinese buying up US treasuries, Brazil helping energy prices by investing more into finding new oil and using ethanol, India buying more products and services from US. These countries are necessary for US investors to diversify and grow capital. Who is to blame for the credit crisis that is threatening global financial stability? Look at how your banks are burying you alive with poor mortgage and other debt instruments.
American companies are investing in India because they can sell their products and services to Indian market and gain shareholder value by using human capital. Why don't you tell the fat cats to stop going around these countries looking to exploit poor people and natural resources with impunity?
6-19-2008 @ 4:24AM
B. Harrison said...
The way of the world, just like with corporations, etc., is "what have you (sic. the USA) done for these countries TODAY?"
Don't expect "the world" to remember what the USA has done for anyone in the past, that is "ancient history". All they care about is "today and tomorrow"; how quickly the past is forgotten.
As our economy and our world power deminishes, that just heightens the tendency for everyone to "forget" about what the USA has done in the past. In the big league of wolld politics and economies, the only relevance is our CURRENT position. Unfortunately our political and corporate leaders lost sight of that quite some time ago.
When you are down, all of the bullies want to kick you to make themselves look good. Our politicians and our corporate "leaders" were too concerned with quarterly profits to consider the long term impact of their irresponsible actions.
J.P. Morgan managed to not get involved in the subprime mortgage loan debacle; and they are coming out on top of this fiasco. Just think of where the USA would be today without our current economic crisis, or the debacle with the war in Iraq. Our problems are rooted in our failed political and corporate leaderships
6-19-2008 @ 12:25PM
Victor Spear said...
It is interesting that Mr. Sattler refers to himself as a 'free market' blogger. And it is clear he has never been a real student of history - a qualification that is sorely needed for sidewalk artists with psuedo-theories that are based on a mere 50 -100 years of data or less.
Did he forget:
a. The Americas was accidentally founded as an economic colony when Christopher Columbus negotiated with Spain to chart an alternate route to India ? And he wasn't trying to outsource anything but desperately procure food, spices, gold and trading partners amidst a deadly economic deflation that plagued Europe
b. In the prior century China was an economic agricultural powerhouse with the East Indies companies (Dutch, English) fighting bitter battles for trade routes from a starving and disease prone Europe. History repeats - check the label on your underwear now and see where it is made ? The alternate then is to not wear any.
c. Brazil is the fifth largest country in the world with twice as much resources as the entire North and South American continent combined. The Portuguese discovered that three centuries ago. The market was called 'emerging' then.
d. Russia, the largest country, has more mineral wealth and oil than the rest of the planet. They just haven't got round to exploiting it, since they have just finished their (failed) experiments in alternate political theories and free-markets don't open up on schedules that arm chair theorists like to believe exist.
e. Literacy rates are declining at double digits in key areas - guess which country ! Today, more English is spoken in South East Asia, notably with an original accent today, than the entire population of America. Let's not even compare computer literacy.
f. In 1929, there were 75 known millionaire maharajahs from a certain country that consumed all 6 years of production orders from the Rolls Royce companies ? (There were zero orders from a depression ridden economy in the US)
g. In 1981, 8 of the top 10 banks in the world were Japanese and gold reached US$ 800 in the late seventies. A major US bank almost collapsed. Middle East money was pumped into another. Nine broker-dealers (they call themselves investment banks also) burnt thmeselves up. They are retrying that feat again this year to prove it actually can happen statistically every 15 years.
h. The DOD has outsourced a multi-billion dollar military tankering fleet to Europe. Guess where most of the raw components for those sub-assemblies will come from ?
h. The 'emerging' economies are actually recovering economies if you care to go back 500 years. However, in one's short lifespan (70+) years, this is too much to worry about. What is the fastest submerging economy today ?
i. The average work week is 37 hrs in the US. In some countries they do not have an average. Work is daily, lifelong. Try a 1.5 hour commute on a bicycle once in a while. This is a daily routine in many emerging economies. No they don't have 8 passenger SUVs driven around with a single driver flying around at 65 mph - leave that to the US to still define what off-road and utility actually means where milk and gasoline are at the same price and drinking water is the fastest growing commodity price.
j. Yes America still is the greatest economic powerhouse in the world and will probably be that way for another 50+ years. Few would have any data to dispute that despite the rhetoric. However it only replaced the other economic successes in other parts of the world during the last 105 years. After WWII, Americans decided to kick butt, cut the bull talk, roll up their sleeves and get to work.
The result is visible. What is also visible is also an unbelievable lack of acknowledgment for similar activity in other corners of the world.