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In history books and amongst historians it’s been said that the 19th century belonged to Britain and the 21st Century was America’s. The question now is who will exert the most influence internationally in the 21st century. Within the next 20-30 years what we are going to witness is going to change the western world as we know it. Currently there is still only one super power, namely America, but there are many would be pretenders to that throne, chief amongst them are India and China.

In order to become a superpower that possesses an overwhelming political and military strength internationally a country needs simply gigantic financial resources. America has always been able to use the carrot and stick approach over the last one hundred years when acting on the International stage. On one hand its vastly superior military has twice intervened to end world wars, as well being the first to develop important weapons of deterrence - the thermonuclear weapons of the 50’s and 60’s for example. No state has ever matched this. Russia (then known as the U.S.S.R) is still recovering from its attempt to build a military force as powerful as the Americans; quite simply Russia bankrolled its army without having anywhere near the resources the Americans had and thus there was ever only going to be one winner in the cold war. On the other hand where military intervention would prove too risky or too expensive America can use its ultimate weapon by imposing economic sanctions against their would be adversaries, such as has been witnessed with Cuba. But let’s look a little closer at how powerful an economic force America really is.

The Gross Domestic Product (GDP) is the sum of the entire final production obtained in a year by a country. GDP in short measures the economic power of a given country. In 2001, the World GDP was close to $31 billion. The world economy relied on three principal democratic centres of the planet, the U.S.A ($10 Billion), the E.U ($8 billion) and Japan ($4 Billion). The world economic power has been highly concentrated in America’s favour for the last hundred years, however times are changing. Despite some comments, the E.U, even if Russia GDP was added, would still lag far behind the U.S in terms of financial clout. History books reveal that every so often, the global economy experiences a shift in its centre of gravity from one country or continent to another, the Greeks to the Romans, the British to the Americans. Right now in Europe we are experiencing one of the greatest flights of manufacturing jobs in history, the last time possibly being when the textile industry in the U.K was uprooted and moved to India in the 18th Century. Where are these European manufacturing jobs going and more precisely why are they going?

First one must ask the more important question how did a country such as America come to economically dominate the world when its only been in existence for over 200 years? The British Empire surely had a few hundred-year head start? The comparisons between the U.S then and China now are striking. The growth of America in the 19th century was achieved largely through exporting to Europe huge volumes of cheap agriculture produce – wheat and cotton amongst others. This was cheaply produced (slavery was only on the verge of being abolished) using vast, and cheap, arable land - in stark contrast to the high cost of land and labour the Europeans had to deal with. In this economic battle, there was only ever going to be one winner. This ultimately led to mass recession in Europe resulting in emigration to the U.S, poor rural areas largely dependent on agriculture were the worst affected such as in Ireland. Ultimately this gradual recession in Europe resulted in increasing urbanisation and centralisation of labour in Europe which would eventually result in the rise of socialism and communism. Today, China is exerting the same influence through its increasing dominance in manufacturing, and it is arguable that the global political ramifications will be just as monumental.

Already there have been calls both in Europe and America for governments to protect local manufacturing jobs from China and technology jobs from India; it was even made into an election issue by John Kerry when running for President. How can any country compete with college-educated workers working for a mere fraction of western costs? In addition China and India’s unquenchable demand for more oil in order to fuel their growth is a major concern with oil suppliers already finding it difficult to meet demand.

The emergence of new potential super powers such as China and India is a worrying development, not merely the fact there could be a clash but rather the questions that they are asking us in the western world. The chief question being how far are we in the western world willing to enter into cost cutting battles which are ultimately detrimental to the well being and prosperity of our own citizens. The stand off between Russia and America during the cold war was based purely on which side could obtain military superiority; it was an ideological clash based on who had the most military might. The methods chosen in order to develop this military might by both sides were entirely different; the Americans relied on capitalism, the Russians on communism. The Chinese and the Indians have learned from the mistakes of the Russians and have chosen capitalism (China has clearly embraced the economics of capitalism in the last decade).

Remember that, although from 1880 to 1914, the world experienced a golden age of free trade and the US became the world’s largest economy, the rest of the world reacted with war, mayhem and protectionism that lasted from 1914 to 1954.Would you bet against some similar upheaval happening again? Would you bet that millions of manufacturing and technology workers worldwide will just lie down in the face of redundancy and accept peacefully the ascendancy of China and India? Would you?

Guest Article submitted by James O’Leary.