It may seem a bit audacious to include the phrase “global prosperity” in a mid-2003 book title. In fact, many friends have suggested that I substitute the word “anxiety” for “prosperity” to sell more books. Titles with pessimistic or alarmist expressions like “The End of,” “The Decline of,” or “The Crash of ” invariably catch more attention and register more sales, and unfortunately too many of them fill our bookstores.
However, it’s exactly at such a time that readers need a reality check. Not a reality based upon what’s covered on CNN or printed in the newspapers; these are often simplified sound bites pandering to our collective economic and social insecurities. Rather, a factual reality based on successful trends in so many areas of human existence. Believe it or not, the world is growing measurably more prosperous everyday. Not understanding how these wealth trends filter into the world, or America’s unique position amid this abundance, merely contributes to our anxiety and obfuscates the actual issues of globalization.
I have three intentions expressed through this book. First, I want to document the tremendous progress—or “wealth”—made in the last 200 years, particularly since 1950. Human history has been a long, sad tale of struggling with scarcity. Up until 200 years ago, most of our species lived very similar agricultural lives. Since then, the scarcity conundrum has been slowly and miraculously unraveled, with human capital unleashing an astounding ability to produce more of the things we need and desire. In the last two or three generations, these trends have accelerated. As I explore in the book, wealth and prosperity mean more than money; they are larger concepts that encompass everything from better education, improved health, greater democracy, and greater choice. Much of this advancement is the result of increased knowledge and human capital, burgeoning technology, economic growth, and excess financial capital that mutually reinforce each in other in a virtuous cycle.
Second, I attempt to describe how this wealth creation process has profoundly altered—and should continue to alter—the human experience. While factories may be closing down in the U.S. and other wealthy countries, many more are opening in boomtowns scattered among developing nations, from Latin America to Asia. New forms of democracy and wider-ranging political demands are reshaping governments everywhere. Mobile non-nuclear families are replacing traditional households; middle-class enclaves are sprouting up everywhere; women are more participatory in social life than ever before; new and old religions are fading, rising, and morphing everyday. What humans need and value in this century is very different than 200 years ago, or even three or four generations ago; and the stratification of needs, values, and lifestyles in the world is greater today than it has ever been.
Third, I wish to suggest that by analyzing these life-altering processes and changes, we’ll all be better equipped to cooperate and continue prospering globally, hopefully with less anxiety. The new economic order of the 21st Century relies almost entirely on well-intentioned cooperation and coordination—for international trade, intellectual and cultural exchange, and collective security. No country, even a hyper-power like the U.S., can achieve greater, long-lasting prosperity on its own. Moreover, no nation can afford to shut itself off from globalizing forces no matter how frightening, foreign, and incomprehensible they may seem.
The U.S. has been thrust into the epicenter of these seminal changes, not merely as an economic and military superpower, but a social, cultural and political—or civilizational—vanguard as well. Through technology beamed into living rooms around the world, our American society is a lightning rod—perhaps the lightning rod—for both the enthusiastic embrace and the violent rejection of this 21st Century world. Frequently, strong opposing views occur within the same countries or societies, and even within the same individuals. We Americans love our wealthy, free capitalist system, but we may feel guilty and apologetic about our materialistic existence. We love our SUVs but hate our dependence on foreign oil and the entanglements it brings. We love abundance and choice, but we worry over environmental degradation.
There are similar mixed emotions in the developing world: Yes, many idolize and dream about the cushy American way of life and hope for a prosperous future of greater ease and material comfort. At the same time, they cling fiercely to their own traditions, even sympathizing with Al-Qaeda terrorists seeking to destroy the U.S., a country often perceived as a modern imperialist driven its own self-interests. Americans should remember that our country endured 200 tumultuous years of unjust and often violent history to reach its current state of freedom, tolerance, diversity, and wealth—and we still have much progress to make. We cannot expect traditional values and perceptions to be dropped so quickly elsewhere, particularly in ancient cultures that can be measured in millennia, not centuries.
This civilizational unmooring underpins much of the current anti-globalization and anti-American sentiments (indeed, they are often intertwined). It certainly is convenient to have some clear target for rage. It is far easier for foreign nations and individuals to lash out at the U.S. government, an American hedge fund, or multinational operators than to address difficult domestic issues of economy and taxation, budget deficits, social repression, or trade competitiveness. Poorer countries are in the awkward position of wanting to attract investment from wealthier ones and export goods to those markets. Therefore, they start from a disadvantaged position that may lead to a variety of fears and resentments. Likewise, it is easy for Americans to lash out at big business (companies whose stock many of us own in retirement accounts, directly or indirectly), protectionist foreign governments, and “backward” policies overseas. We want access to inexpensive imported goods and cheap gasoline, but we don’t want to deal with the social and political responsibilities that may come with such commercial entanglements. Often we are insensitive to—or even blithely unaware of—the needs, values, and lifestyles of less fortunate countries, and our actions may be seen as arrogant, boorish, antagonistic, and self-righteous.
This individual and national confusion unfortunately taints the globalization debate here and abroad, where the focus is often on anecdotal successes or failures. However difficult it may be, we must remember that the long-term, universal benefits of globalization—the raising of human living standards on all fronts—are indisputable. Anxieties and economies may ebb and flow in the short run, but the responsibility to manage these progressive evolutions and revolutions—with worldwide human prosperity as the goal—should be our consistent aim in both government and the marketplace.
Since so many people have become interested in the globalization debate in recent years, I’ve attempted to keep the material fairly broad, fluid, and useful for the general reader. The chapter endnotes serve not only to identify my research sources, but also as starting places for further exploration by readers. There are so many perspectives and facets of this wealth and globalization debate; I hope that these references will spur additional research and discussion into the pressing questions of our time.
Books like this always require an immense amount of support, and I can only attempt to acknowledge the gracious assistance and guidance received during this project. Several writers, scholars, and market practitioners have spent time chatting with me about specific ideas and issues that populate the book including Sam Ahmad, Gerard Baker, Federico Bauer, David Brooks, Charlie Calomiris, Joyce Chang, John Edmunds, Albert Fishlow, Frank Fukuyama, Derik Gelderblom, Steve Hanke, Craig Karmin, Naomi Klein, Enrique Krauze, Albert Laverge, Michael Lewitt, Price Lowenstein, Ted Merz, Pedro Molina, Paul Zane Pilzer, Lynn Patterson, Virginia Postrel, Jeff Sachs, Amity Shlaes, and Jim Twitchell. Dr. William Robert Fogel of the University of Chicago deserves special mention. He is one of the more human-oriented economists, who proved to me that, occasionally in life, one can get a free lunch. Lisa Anderson and Steven David provided excellent feedback on early drafts and many of their suggestions have been incorporated into this final version. There are also many debts owed to scholars I’ve never met except through their writing. Among these, I must thank Lynn White, Jr., the great historian at UCLA, whose work on medieval technology and social change has inspired so much of my multi-disciplinary interests.
On the publishing front, the Financial Times Prentice Hall team has been exceptionally encouraging and accommodating. My publisher Tim Moore and his team—Russ Hall, Jerry Votta, Talar Boorujy, Donna Cullen-Dolce, and Rick Winkler—have worked closely with me from day one of the project. My agent, Henning Gutmann, also deserves thanks for shaping my original proposal and approaching the FT team with my ambitious topic. Jon Beckmann, who helped organize and edit my first book, fortunately did not tire of my shortcomings and provided similar support for this book as well.
I owe much to my Columbia University students, and it is to them that I dedicate this book. Many of the themes have been debated with them over the last decade. A few students have assisted me with specific research including Lisa Bryant and Stephanie Meade. Gretchen Heefner, in particular, supplied heavy lifting in early drafts and Arif Joshi dutifully mined for difficult data in many chapters.
A certain amount of psychic support is always necessary for projects like this. My day-job colleagues—Mike Gagliardi, Lisa Sherk, Denise Simon, Ken Glynn, and Rich Crochet—deserve much praise for helping my research while keeping our business bliplessly on track. They, along with other colleagues such as Hernando Perez and Christina Almeida, have also contributed many economic, financial, and political, and cultural insights over the last decade. Kat Arturi, my assistant, assembled and packaged multiple versions of the manuscript, and kept the project organized when things were almost spiraling into chaos. Deb Killmon kept my energy levels high through the last year and a half, and David Rapkin has been an excellent early-morning sounding board for dozens of factoids strewn throughout the book.
There’s probably not a big idea in the book that hasn’t been bantered about with some members of my family at one time or another, and my brother-in-law Matt Hill has been part of many of those discussions for nearly two decades. Finally, a special thanks to my wife, Andrea, who never reminds me that book editing wasn’t part of our wedding vows. Her valuable comments have helped smooth many arguments that you’ll read, and there’s probably not a page in the book untouched by her hands.