Yet what happens to the world’s economy is not random—it’s about the change we choose. Globalization may have unleashed change of a scale, scope, and speed unprecedented in human history—but it has also given our species an unprecedented opportunity to act in concert in order to master the forces that buffet us.
The truth is that the world has seen a shift in productive power over the last two decades that is more dramatic than any since the Industrial Revolution, with more than 2 billion men and women joining the ranks of industrial producers, trebling the size of the world’s industrial economy. This year—for the first time in industrial history—the combined forces of America and Europe are being outproduced, out-manufactured, out-exported, and out-invested by the rest of the world. The corollary of this change is that the next 20 years will also see another worldwide revolution, this time in consumerism, and it will be dominated by Asian workers, who will treble the world’s middle class. This second wave of change will turn all the old certainties on their head: America, once the biggest consumer in the world, will face an Asian market twice its size. Germany will be just 4 percent of the world’s consumer spending and the U.K. just 3 percent—but Asia will be 40 percent. Asia’s spending potential will be a staggering $25 trillion.
This transition, to a world with multiple poles of growth, will be directly felt on nearly every Main Street, shop floor, and kitchen table. So, too, will the risks associated with a globalized financial system that remains perilously unregulated. The global flows of goods, services, and capital create global problems that can be answered only by global solutions and by a consensus between world leaders to reach binding agreements for the good of all nations.
The world needs to act in concert to tackle the threat of further financial crises, too. When our biggest banks came within hours of meltdown, we started to learn the hard and bitter lessons of a system that had developed beyond the control of individual nations. The crash made clear that vast flows of money had to be monitored across the globe, not merely within nations, that early-warning systems were needed from one continent to another, that banks must be properly capitalized, and that we could not hope to manage with merely local supervision the institutions that had outgrown national borders.
For a brief moment in 2009, during the London G20 summit, the world’s leaders showed an impressive resolve to act together to create a more prosperous and stable world. Their resolve grew out of the banking crisis and the threat of a global depression, but today that resolve has evaporated in a retreat into national shells.
There will be no climate-change agreement either, even though nuclear worries are escalating and the case for low-carbon investment becomes more obvious by the day. Nor will there be sufficient global support for the unemployed of the Middle East, North Africa, and sub-Saharan Africa (who together constitute the fastest growing of the world’s young), with all the problems of immigration and insecurity that such neglect will unleash. Global growth will be far lower than it otherwise needs to be, unless the world begins to understand that there is no solution to financial instability, diminished trade, and mass unemployment without a global deal for jobs and justice.