The Post-American World: Release 2.0 (40 page)

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A note on terminology: For such a straightforward idea, gross domestic product (GDP) is a surprisingly complicated measurement. Although tradable items like iPhones or Nikes cost roughly the same from one country to the next, goods that can’t flow across borders—such as haircuts in Beijing—cost less in developing economies. So the same income goes much further in India than in Britain. To account for this, many economists use a measure of GDP called purchasing power parity (PPP), which substantially inflates the incomes of developing countries. Proponents say this better reflects quality of life. Still, when it comes to the stuff of raw national power, measuring GDP at market exchange rates makes more sense. You can’t buy an aircraft carrier, fund a UN peacekeeping mission, announce corporate earnings, or give foreign aid with dollars measured in PPP. This is why, in general, throughout this book I will calculate GDP using market exchange rates. Where PPP is more appropriate, or when the only numbers one can find are in that form, I will make a note of it.

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I say two billion because the rural poor in South Asia, China, and Africa are not, in any significant sense, participating in the global economy. But millions of them move to the cities every year.

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So it is understandable that we are still thinking through its consequences.

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In this chapter, I use many examples involving China and India as a proxy for the non-Western world because they were among the most advanced Asian civilizations of the preindustrial era. Everything that is true about their slipping behind the West in the fifteenth and sixteenth centuries applies to most of the non-Western world.

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Throughout this chapter and others, GDP estimates from before 1950 come from Angus Maddison, whose book The World Economy: A Millennial Perspective is an important source for income, population, and other figures from the deep past. All of Maddison’s numbers are in PPP dollars. For long-run comparisons, this is appropriate.

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Archaeological records provide one more interesting piece of evidence. Skeletal remains from the eighteenth century show that Asians were much shorter than Europeans at the time, indicating poorer nutrition (and, by implication, lower income).

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Disasters raised living standards by killing off large numbers of people, leaving fewer people to share the fixed pool of income. Growing wealth, on the other hand, caused people to have more babies and live longer, so incomes fell, as, over time, did population. This is called the “Malthusian trap.” You can see why he’s considered a pessimist.

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Not entirely. The gender difference persists. While successful Indian men in government and business now routinely wear Western dress, many fewer prominent Indian women do the same.

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China’s official military budget would put it third in the world, after the United States and the United Kingdom. But most analysts agree that many large expenditures are not placed on the official budget, and that, properly accounted for, China’s military spending is second—though a very distant second—to that of the United States.

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This is a tough statistic to get exactly right because researchers have used different yardsticks (PPP, 1985 dollars, etc.). But the basic point that China is below the threshold for democratic transition is accurate.

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Matteo Ricci was the missionary who brought clocks to the Chinese emperor in the late sixteenth century.

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Unadjusted for purchasing power. The PPP figure is $3,300. The comparable numbers for China are $4,800 (market) and $8,300 (PPP).

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The foreign secretary is the senior-most foreign service officer (bureaucrat) in the ministry.

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In a recent book, Nehru: The Inventor of India, the UN diplomat and scholar Shashi Tharoor writes that, in 1952, Nehru refused a U.S. overture that it take over the permanent seat on the UN Security Council then held by Taiwan. Instead, he suggested that the seat be given to China.

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Observers from fourteen foreign navies were in attendance, eagerly taking in the spectacle. One of them, the German rear admiral Prince Henry of Prussia, looked on enviously from the deck of his British-built battleship, which had recently been downgraded to a cruiser. He and his brother, Kaiser Wilhelm II, desperately hoped to catch up with Britain in naval power—a story that ended badly.

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During one of the crises in which Britain eventually gave in, over a boundary between Venezuela and British Guiana in 1895, the colonial secretary, Joseph Chamberlain, angrily pointed out, “Britain is an American power with a territorial area greater than the United States itself and with title acquired prior to the independence of the United States.” (He was referring to Canada.)

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These numbers are based on market exchange rates, not adjusted for living standards. The numbers in PPP dollars would be 19 percent in 1913, 27 percent in 1950, 22 percent in 1973, 22 percent in 1998, and 19 percent in 2007. The PPP numbers also show the same pattern, of American power being relatively stable at around 20 percent of global GDP.