There is a certain group in the United States that loudly and confidently proclaims our own decline, saying that relative to the rising behemoths of Asia, such as India and the oh-s0-scary China, we’re screwed. And that view, while not universally held, holds wide currency across the world. While it’s clear that there’s a number of economies in the world that are set to grow at rates we would think of as stratospheric in the US, there’s a few things that we have to remember.
First off, countries such as India and China are emerging from a much poorer starting point. The income of your average Indian or Chinese citizen is still far below that of any developed country, and it will likely remain that way for at least another century.
Second, development isn’t just about GDP growth figures. It’s about infrastructure. True, infrastructure can fuel GDP growth, but a lack of it can stifle it. And, a lack of it can also be deceptive. Meaning, things look like they’re going well, until they aren’t. Case in point: 350 million (higher than the population of the US) people in northern India lost power for more than eight hours today. The reason: a faulty electrical grid. And this past month in Beijing, which at this time four years ago, was the center of the world’s attention for the 2008 Olympics, has experienced flooding that, according to government estimates, has killed upwards of 70 people. Unofficial estimates put the death toll much higher.
My point is this: you can talk all you want about massive amounts of growth and engage in lots of vanity projects, but if you don’t have the nuts-and-bolts conditions right for a sustainable rate of that growth to take place, along with the infrastructure to support it, then that growth, over the long haul, isn’t going to be sustainable. And the US should take note of this as well. While our infrastructure is far superior to what exists in most of Asia, it’s not what it used to be. Significant investment in our energy, transit and communications grids could provide hundreds of thousands of jobs, along with providing a significant boost for the economy. For example: have you ever flown through LaGuardia airport? If you have, then you’ll know what I’m talking about. And if you haven’t, imagine an airport you’d expect to find in a third world country, except for the fact that it’s on the outskirts of the economic capital of the US.
And that’s just talking about physical capital. There’s a whole other area of capital, that being of the human sort, that goes into building a nation. Growth isn’t just about a GDP rate. It’s about having the physical plant in place to support it, and the skills in a population that knows how to run it.