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6 of 8 people found the following review helpful
1.0 out of 5 stars Khanna's delusion, July 14, 2011
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This review is from: The Second World: How Emerging Powers Are Redefining Global Competition in the Twenty-first Century (Paperback)
Khanna's main theory: the EU and China are taking over the World and the US is falling off the First World. For him, most everything the EU and China do is great. While the US can do no right. This is even the case when the undertakings are identical like promoting civil rights. If the EU does it, it is superior governance. When the US does it, it is ineffective meddling. This book is similar to Emmanuel Todd equally delusional After the Empire: The Breakdown of the American Order (European Perspectives: A Series in Social Thought and Cultural Criticism) written in 2004. While Khanna's magic societies are the EU and China. Todd's are the EU, Japan, and Russia. Another member of this genre is Clyde Prestowitz who wrote Trading Places: How We Allowed Japan to Take the Leadin 1988 or how Japan was number 1. More recently, Prestowitz revised his magic society to be China in his Three Billion New Capitalists: The Great Shift of Wealth And Power to the East written in 2006. These authors make the same errors. They cherry pick the data to capture only the strengths of their magic societies and the weaknesses of the US. They extrapolate into the future and generate poor analysis.

Magic society theories routinely fail shortly after the book release. Japan experienced an ongoing economic stagnation just a year after the release of Prestowitz's "Trading Places" in 1988. Similarly, Russia's economic and demographic outlook has very much dimmed ever since Todd's "After the Empire" released in 2004. Additionally, on both economic and demographic counts the EU is not faring well despite Todd and Khanna's love affair with it.

Here are a few facts to benchmark the competitiveness of the EU, US, and China. Using the politically correct statistics of the IMF relying on purchasing-power-parity (PPP) method, between 1980 and 2010 China has grown enormously. And, on a PPP basis its share of world GDP has risen from 2.2% to 13.6%. It has grabbed those shares more from the EU than the US. Over the same period, the EU share dropped by 34.7% or from 31.3% to 20.5% of World GDP. Meanwhile, the US downtrend was milder with a decline of 20% from 24.7% to 19.7% of World GDP. The IMF forecast through 2016 indicates China's share of world GDP on a PPP base will grow to 18.0%. Meanwhile, the EU and US will be tied at 17.8%. In other words, the three economies would be of the same size (on a PPP basis). However, China's economic size is due primarily to its larger population (5 times the US). Once you adjust for that, China is barely a Second World country. Let's look at the 2010 IMF statistics on GDP per capita on a PPP basis. On this measure, the US [GDP per capita (PPP basis)]is still 55% higher than the EU and over 6 times greater than China.

Now, that we have established the facts let's contrast those with Khanna's vision.
His idealization of the EU is limitless. He states "The EU is easily the most popular and successful empire in history... Europe... is partially Islamic. A successful empire cannot be racist." Khana completely overlooks that Muslim populations within the EU are marginalized and radicalized into terrorism. A bit later, Khana adds: "The EU is now the most confident economic power in the world... its superior commercial and environmental standards have assumed global leadership... It is often said that "America breaks and the EU fixes." The statement about "America breaks" is surreal. The American fixes have saved Europe in WWI, WWII, and Kosovo. Meanwhile the EU has not fixed anything on the world stage.

Let's give China some love. Khanna expands on Chinese "peaceful rise" as he states "the more confident China becomes, the more it cooperates." Peaceful rise also suggests that "overconsumption and pollution are dangerous." Well, how about overproduction and pollution?! Even Asian gangs are better: "Their ruthlessly efficient drugs, weapon, and money-laundering operations make American gangs seem amateurish."

Sometimes, Khanna states paradoxes without knowing it. "China is so confident in America's lack of appeal that US presidential elections are televised live, perhaps for entertainment... America ranks as the most disliked country in China... while Chinese have become a major brain gain of the US." Another choice quote: "The Chinese state is strong enough that it can afford to allow the media to be critical... media reporting on natural disasters without prior approval is banned." Later Khanna states: "China is building a mega-economy based both on mass production and consumption." But, Chinese economic growth is mainly export lead.

Khanna's disdain for the US is profound. He deems the US solely responsible for the rise of leftist leaders through Latin America. The US has failed to economically integrate the Americas because "America still focuses too much on regulating markets and too little on building them." This statement when coupled with Khanna's idealization of super-regulated European capitalism makes for an absurd contradiction. He also holds the US responsible for Mexico's society devolving in corruption and drug warfare. Later, he blames the US for the rise of terrorism in Islam. In other words, no one bears any responsibility for their own bad behavior. It is all the American's fault.

Khanna dedicates a good part of his concluding chapter in denigrating the US further. He cherry picks the weakest spots of the US and pretty soon turns it into Armageddon. Here, the US is all about its failing health care system, obesity epidemic, Katrina government fiasco, mediocre primary education, lack of gun control, high incarceration and crime rates, failing of auto industry, Detroit, etc... Khanna selectively skips on any of the US strengths including an outstanding university system, hotbed of technological and scientific innovations, a first class venture funding, an adaptive culture of entrepreneurship that attracts the most capable immigrants worldwide including Chinese and Europeans.

Regarding the Middle East, Khanna's narrative is also off. He suggests that the area has all the "[human capital] talent to develop itself." Later he states: "Arabs will not be left out of globalization; they are shaping it." "Arab Muslims... ascribe greater importance to economic than spiritual [religious] ends." And, later he states: "more than ever, the Arab world has all the elements..., common form a natural geopolitical bloc." He omits the inherent sectarian hatred within this fragmented religion (Islam). Khanna adds that Islam is spreading rapidly in modern regions due to its mass appeal to converts. Later he states, "Dubai is set to triple in size by 2015." Instead, Dubai World filed for bankruptcy in 2009, less than a year after the printing of this book.

For a far superior and nuanced treatment on the exact same subject, I recommend Zakaria's The Post-American World: Release 2.0. For a more realistic US outlook, check out Kotkin's The Next Hundred Million: America in 2050. If you think this competition of empires is obsolete, read R. Florida's excellent Who's Your City?: How the Creative Economy Is Making Where to Live the Most Important Decision of Your Life.
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