WESTERN ECONOMIC SHRINKAGE A REALITY AS ASIA RISES

Erle Frayne D. Argonza


Magandang araw sa kapamilyang global! Good day to fellow global citizens!

For three decades already, I have been echoing a prognostication that was already current stock within sociology, about the ‘decline of the west’. Let me return to the same theme, as the rapid decline of the West and the fast rise of Asia is now a reality of the current historical juncture.

Just a couple of days ago, the Philippine Daily Inquirer’s or PDI’s opinion pages published an article by the past recent premier of the UK, Gordon Brown (PDI, 7 January 2011). Titled “Reviving the West,” it was a rather straightforward admission of the techno-economic decline that the West had undergone and the rapid ascent of Asia as the global economy’s growth driver.

As Brown succinctly stressed, “Time is running out of the West, because both Europe and the United States have yet to digest the fact that all the individual crises of the last few years—from the sub-prime crisis and the collapse of the Lehman Brothers to Greek austerity and Ireland’s near-bankruptcy—are symptoms of a bigger problem: a world undergoing a far-reaching, irreversible and, indeed, unprecedented restructuring of economic power.”

That was the former premier speaking, a technocrat and economic manager prior to his premier stint, so it does carry weight as much as those of the globe-trotting former US president Bill Clinton. Gordon went on to demonstrate his deep knowledge of the rising middle class consumers of Asia who altogether will make the greatest consumers the world over in the foreseeable future.

Said Gordon:

Of course, we all know of Asia’s rise, and that China exports more than America and soon will manufacture and invest more as well. But we have not fully come to terms with the sweep of history. Western economic dominance—10 percent of the world’s population producing a majority of the world’s exports and investment—is finished, never to return. After two centuries in which Europe and America monopolized global economic activity, the West is now being out-produced, out-manufactured, out-traded, and out-invested by the rest of the world.

That indubitably is an empirical substantiation of the thesis long held by Western social forecasters about the ‘decline of the West’. Oswald Spengler, Arnold Toynbee, Daniel Bell, Alvin Toffler, and John Naisbitt have churned out voluminous prognosis and forewarnings about the same thesis within a century’s span…and that thesis is now a reality.

In the middle and last portions of Brown’s article, he admonished Americans in particular to re-invent the ‘American dream’. The way to the revival of the West, with the USA showcasing the compass, is to re-structure the economy altogether. Accordingly, the nascence of over a billion middle class Asian consumers is a huge opportunity for America to re-invent itself and revive a strong economy.

Brown also forewarned America’s politicians, notably the Right, about criminalizing external forces, such as China’s currency, as culprits behind the decline of the US economy. Intervention measures such as currency wars are flawed, precisely because they fail to address the internal factors that are truly the causes of the economic decline.

To a great extent, I do agree with the evaluations and interventions of Brown. Fact is, I have already begun to echo the theme that America and Europe ought to reverse the policies of liberalization, privatization, and deregulation that led to de-industrialization, agricultural decay, infrastructure decay, and the rise of a ‘virtual economy’ based on predatory finance (vulture funds, derivatives or hedge funds). As I had been saying all along, the West should go back to the principles of the ‘real economy’ where wealth is produced from agriculture, manufacturing, infrastructures, transportation & communications, and science & technology.

As a matter of fact, I have been among Asian analysts and development practitioners who have urged the Americans to go back to the economics of New Deal propounded by the late Franklin Delano Roosevelt. Likewise should the tried & tested policies upheld by Alexander Hamilton, Abraham Lincoln, Frederick von List, and John F. Kennedy, policies that impelled the rise of the physical economy and brought bountiful prosperity to Americans (read: created a predominant middle class), be put to the fore in rebuilding America.

Gordon resonates somehow with the ‘physical economy’ framework, even as he heralded the need for a new Marshall Plan for the world. Accordingly, the Plan could help to recast the banking system that was dirtied by its engagements in speculative financing and contributed to creating financial bubbles. The Western peoples should better listen to him, more so the youth who will be tomorrow’s Western leaders.

Let me re-echo the same message I have been saying all along: that prosperity should be a win/win phenomenon. No one here in Asia would ever want the USA and Europe to go back to the era of ‘cave man’ economy of hunting & gathering. I’d be happier many more times if the West should re-invent itself, cease from playing the destructive game of win/lose logic in order to prosper, and move back to reconstruct its physical economy altogether.

Asian spiritual masters, who incidentally also discoursed on economic doctrines (i.e. Baha’ullah, Gandhi, Vivekananda, Sarkar, Sri Aurubindo), left us all the legacy of building prosperity through the way of peace, cooperation, and mutual-help. It’s time for the Western peoples to retool themselves, by throwing away the binary and destructive thought system they inherited from their forebears, and by learning from Asia’s spiritual and intellectual giants.

[Philippines, 09 January 2011]

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