It so happens that the Caucasians are the most dominant people and they with the exception of Russians have discovered all modern institutions, like, democracy, capitalism, WTO, UN, IMF and World Bank etc. Russians though they can not compete economically are militarily very powerful and have contributed to fundamental arts and science.
The most important thing is that only comparable nation-states and people should be compared. The Africans can not be compared with Americans. The difference between the performance between America and Africa is that of race though race itself is the reason of origin of differences in institutions. It is the race that begets institutions on its own and it is those institutions and their expansions which is the cause of prosperity and growth in many nations. The Americans can be compared with the British, French and Germans. The differences among them are due to differences of laws and constitutions, sizes, languages and social institutions. The US has biggest size, has most versatile natural resources and has vast human resources both because of nationals and because of immigrants and is therefore most prosperous and most powerful.
The world appears to be growing because many among the Western nations want to grow more. In this respect the growth of BRICS is derivative. Even though the majority of BRICS is non-democratic or at least not as democratic as the Western nations are, the fact is that they are growing. Except Communists Party, China has not invented any institution of its own but it is growing at the highest rate. The reason has to do with the constant investments that Americans and other Westerners are making in China since the late seventies. The Chinese Politburo directly or indirectly regulates the limits of foreign shareholding. Therefore, with the help of joint ventures Chinese businesses get shareholding, people get decent salary and the government earns taxes and foreign capital. Since both Chinese and Russians have signed 123 Agreement with the US, they can also get sensitive technologies in space, defense and other strategic field.
By investing in BRICS, the Americans and other Westerners get huge returns on the same investment in product and service development, shareholders get returns, public gets diversity of products and cheaper products and governments other than taxes get additional foothold in world affairs and the values of the USD and the Euro gets increased. The investment is mutually beneficial. Therefore, even though Chinese are neither Caucasians nor they are democratic but because of others’ wish to grow they also grow. Of course, in the whole process Chinese entrepreneurs also generate their own businesses.
Chinese growth story is irreversible as long as the West wants to grow. It should be noted that capital withdrawal is accompanied by technology withdrawal and because of copyright issues the products can not be produced by those countries from which relationship is broken. So fundamental point is the fair race and then it is the institutions. If a nation-state lacks both it is very difficult for it to grow.
The slowdown and partial recession that is observable in Western world does not hint at all at its demise. The point is that the West can not create enough job opportunities and growth internally being at a very advanced stage of growth as per the earth’s standards. This is only partially true that reason for slowdown is that the Westerners have invested heavily in emerging markets; it is blatant selfishness, if they do not invest the they would grow by lesser rate and emerging markets would also not grow. As a result the potential of the capital will be wasted.
The income inequalities are rising worldwide, particularly in the US. This can be explained as the following. The business-community and top management invests all across the world and earns profits everywhere whereas a middle class American worker can earn by doing work at only one place. The investors can not withdraw capital fully even in case of economic catastrophe in the West. But otherwise their growth of wealth is exponential whereas the growth of salary of average worker is hardly non-linear.
The argument that rich Americans do not pay taxes properly is also not correct. The fact is that they pay taxes all across the globe wherever they do businesses. And Federal government should have signed treaties avoiding double taxations. Once tax is paid by them bringing money back to the US contributes to the cause of the nation. Since they have already paid tax for that money they can not be expected to pay taxes again. The fact is that the West should never depart from the path of capitalism: in order to distribute one should posses and that possession comes from generating wealth. Increasing taxes so that the nation-state becomes welfare state and acts like a guardian is no remedy. There should not be too many hidden and indirect taxes either.
The fact is that capitalist will not withdraw their investment from second producing and emerging markets, unless and until the State Department and foreign offices of other Western nations withdraw guarantee for their investment. The reason is that such withdrawal would undermine their capital, would interfere with the functionalities of the capital and the capital would not expand horizontally and vertically either. Capital should go where it is demanded most and where it gets maximum returns: the emerging markets. The capital can add to all kinds of local and global asymmetries. The capital withdrawal can also lead to disorder and chaos in the second producer nations and would harm the interests of investors. As a result taxes may go up in the West. But yes, the Westerners should invest in themselves too.
The value of capitalism externally is measured by the Western companies’ and governments’ abilities to maintain hopes and contain inflations. But in today’s world in order to let the capital grow the economic inflation may become a mandatory tool. The Americans would like to have the powers to diktat the price to the outside world. The local currencies in order to keep pace with the Western world may many times become inflationary. Very few among them have the ability to maintain the constant rate of inflation in view of the globalization and Westernization. Americans would always like to see that the number of consumers and the total amount of consumption increase at a proper rate. That’s why they can interfere with other nations’ policies.
The argument that the world power is shifting towards the non-West is not correct. Even if the system of special drawing rights (SDRs) is accepted this will be due to the fact that Americans and other Westerners governments and companies hold very huge amount of local currencies. It would be only slight democratization of the global economy. The race will always persist. The US and through it the rest of the West is irreversibly dominant if the US is able to invent alternate to fossil fuel and it is also able to develop and deploy a reliable NMD.
The world is already divided into fours categories: the leaders, the followers, the derivative powers and laggers. All can not be first producers, obviously, but all among the rest can not be second producers as well. It requires size, vast natural resources and skilled human resources in order to become second producers. It is a question of race as far as followers are concerned. After the Caucasians it is Mongoloid, Hispanic, Indian, Arab etc. After the invention of internet and other high-tech communications, the dominance and asymmetries are only going to be enhanced. If the world, particularly the BRICS, does not understand it then there will be fight between non-economic inflations of the Rest and non-economic returns of the West. Nobody can snatch the powers from those who are the first producers; pretence can only increase predation. All Americans and Europeans should understand that capitalism is good for them and for the rest too.