Does the Future Belong to China?

[Roger Johnson]

[ May 04, 2005: Message edited by: Roger Johnson ]

[Jeroen Wenting]

I've held for years that the future lies in Asia.
Europe is economically and politically dead, the US has been sidelined and will likely slip into another long period of isolationism rather soon, Africa and South America are too weak politically/militarilly as well as economically to be a factor.

That leaves only Asia. In Asia India and the PRC are the largest players, with Japan a good third.
Seeing as the PRC and India recently decided to work together on a large scale economically and both have nuclear weapons and a massive standing army to back up any political pressure they're the most likely dominant factor in the region for the near to intermediate future.
As that region will soon be the dominant region on the planet, that makes the China/India coalition the dominant force both militarilly and economically on the planet in a few years' time.

[Frank Silbermann]

Most research in human intelligence suggests that the average Chinese has an IQ that is five points higher than that of the average European/American. That difference is significant. The future is theirs to win or lose.

Intelligence, of course, is not everything. America has prospered -- despite an average intelligence noticeably lower than that of Europe -- because it has an economic system that encourages (or at least allows) those Americans who are intelligent to sell the use of their brains to the highest bidders, thereby maximizing the value obtained from a scarce resource. America was fortunate to have been established during an era when the fashion in political philosophy was untypically wise and realistic about human nature. Nevertheless, the physical human capital in China has superior potential, even if their socio-political heritage is inferior.

[Pradeep bhatt]

Originally posted by Jeroen Wenting:
I've held for years that the future lies in Asia.
Europe is economically and politically dead, the US has been sidelined and will likely slip into another long period of isolationism rather soon, Africa and South America are too weak politically/militarilly as well as economically to be a factor.

That leaves only Asia. In Asia India and the PRC are the largest players, with Japan a good third.
Seeing as the PRC and India recently decided to work together on a large scale economically and both have nuclear weapons and a massive standing army to back up any political pressure they're the most likely dominant factor in the region for the near to intermediate future.
As that region will soon be the dominant region on the planet, that makes the China/India coalition the dominant force both militarilly and economically on the planet in a few years' time.

China is many times ahead of india. China will be super power.

[Frank Silbermann]

Originally posted by Jeroen Wenting:
the US has been sidelined and will likely slip into another long period of isolationism rather soon,

I think that's a realistic possibility. America's resources are limited, and becoming moreso all the time. America cannot solve the world's problems alone, and cannot lead if other nations will not follow. It may be all we can do to save our own liberty by becoming another Switzerland.

Do you think that those who have most sharply condemned America's interventionism in the battles against totalitarianism will welcome America's withdrawal from the world stage, or will they criticize that as well?

[Ashok Mash]

Does the Future Belong to China?

Dui! Shi! Hai!

[fred rosenberger]

Jeroen wrote

Europe is economically and politically dead, the US has been sidelined and will likely slip into another long period of isolationism rather soon, Africa and South America are too weak politically/militarilly as well as economically to be a factor.

That leaves only Asia.

Ummmm.... Australia?

I'm not saying the Aussies are or are not a major player. i'm just saying you forgot about an entire continent.
[ May 04, 2005: Message edited by: fred rosenberger ]

[Gerald Davis]

Originally posted by Frank Silbermann:
Most research in human intelligence suggests that the average Chinese has an IQ that is five points higher than that of the average European/American.

The main factor that made America great is it manages to utilize cheap labor force. If you think Henry Ford and the America fast food industry and you get the full picture. It was this type of system that brought wealth into the country. Intelligence was not required by the masses; a matter a fact intelligence is often over rated.

[Frank Silbermann]

Originally posted by Gerald Davis:
The main factor that made America great is it manages to utilize cheap labor force. If you think Henry Ford and the America fast food industry and you get the full picture. It was this type of system that brought wealth into the country. Intelligence was not required by the masses; a matter a fact intelligence is often over rated.

Thank you for further developing my point; the American system amplifies the effect of the few intelligent Americans (e.g. Henry Ford and Ray Kroc) by encouraging them to apply their talent to improve the effectiveness of great masses of less intelligent people. This allows America to prosper despite an average intelligence that is not particularly good.

Under a different political system, Henry Ford and Ray Kroc would have applied their intelligence within much narrower spheres of influence. Unless their level of intelligence were quite common, the energy of cheap unskilled labor would be largely wasted.

Fred Rosenberger: Ummmm.... Australia?

I'm not saying the Aussies are or are not a major player. i'm just saying you forgot about an entire continent.

Australia might _become_ an ethnically Asian country, for better or worse. Otherwise, with respect to potential it falls into the same category as Europe, as Australians tend to imitate European trends.

[Alan Wanwierd]

Originally posted by fred rosenberger:
Ummmm.... Australia?

Australia may be a continent, or in some circles can be considered to be a part of Asia, but whichever way you look at it Australia is econimically insignificant!

we have a population of <20million, which put into perspective is less than the population of 1 decent sized European or Asian city... and certainly is a tiny drop in the ocean compared with populations of India, China etc etc..

[R K Singh]

Originally posted by Adrian Wallace:
we have a population of <20million, ..

I doubt that population plays any role in being major player in world politics.

Its about how much a country can interfere in others matter and how much value is given to her voice. How much it can control the world to be in its favor.

Is it the beginning of another polarization of the world ??
Which I doubt cause history repeats itself but not so soon.

So lets wait and watch, what is next on international politics.

[Manick Batcha]

Will India overtake china??There is possibility

http://www.financialexpress.com/fe_full_story.php?content_id=87158

[R K Singh]

Originally posted by Manick Batcha:
Will India overtake china??There is possibility

http://www.financialexpress.com/fe_full_story.php?content_id=87158

I was fearing this :roll:

[Axel Janssen]

Originally posted by Gerald Davis:


The main factor that made America great is it manages to utilize cheap labor force. If you think Henry Ford and the America fast food industry and you get the full picture.

Were American workers cheap
I don't think so. 2 brothers of my grandpa emigrated to US after WW1. Like my grandpa they worked all their life as craftsmen. They had far more buying power than my grandpa.
Bigger house, summer cottage, first car bought in the 30ties (my grandpa never owned one), more kids. I remember having seen the old T-Model in a barn nearby the summer cottage in central Wisconsin in the late 70ties.
And we all know that inteligence is not everything, especially in business, but isn't the big group of qualified engineers one of the strong point of the chinese economy?
Also lets remember that they are starting from really low levels. Some time in the future they will find frontiers where rapid growth rate will come down to more average levels. Japan went through long crisis in 90ties, too.
[ May 05, 2005: Message edited by: Axel Janssen ]

[Dave Lenton]

There's no doubt that China is moving out of the shadows. If you look at the long term history of China, the 20th Centaury is something of an anomaly - for most of the rest of its history, China has been a massive superpower.

It won't just be China though which becomes more powerful on the international scene. Many people believe India will, but there are other possibilities - countries like Brazil, Indonesia and Malaysia have potential. Its also likely that Russia and Japan will step up again into large scale international influence at some point.

Is this a good thing though? On the one hand, improving people's quality of life is a good thing..... but it comes at a cost. At the moment the American lifestyle produces 1/4 of the world's greenhouse gasses with a population of just under 300,000,000 people. What happens when the combined 2,300,000,000 people of India and China want the same lifestyle? Do we have enough resources, and enough environmental capacity to cope?

If there are not enough resources to go around (and environmental damage could reduce the amount of available resources), there could be a tremendous struggle for these resources, either in the field of economics or violence.

There will be political ramifications of more superpowers as well. Its been a long time since the world had more than two superpowers, and it there could be a period of political instability until a new balance is reached.

[R K Singh]

Originally posted by Axel Janssen:

Bigger house, summer cottage, first car bought in the 30ties (my grandpa never owned one), more kids.

I never knew that man labour was not cheap even in early 19s

[Manick Batcha]

India set to rank third by 2040

Given the comparative advantage of a skilled workforce available at low costs, backed by huge foreign exchange reserves and foodgrain surplus, India has a historical opportunity to fulfil the predictions, says Abhijit Roy.



A HUNDRED years is a long time in the life of a nation. In 1940, India was a poor country under foreign yoke. By the year 2040, if things go according to prediction, India will be the third largest economy in the world with a reasonably high per capita income. This is as per the recent Goldman Sachs study titled `Dreaming with BRICs: The Path to 2050' authored by Dominic Wilson and Roopa Purushothaman. The report places Brazil, Russia, India and China (identified as BRIC countries) among the fastest growing economies over the next 50 years.

So how is this prediction earthshaking? The World Bank publishes estimates of gross national income (GNI) in terms of nominal as well as purchasing power parity (PPP) of various economies.

According to the World Bank, India had a nominal GNI of $477 billion and a PPP GNI of $2,913 billion in 2001. This yielded a per capita GNI of $460 in nominal terms and $2,820 in PPP terms.

In PPP terms, India was already the fourth largest economy in 2001 after the U.S., China and Japan. As Japan had a GNI of $3,246 billion in PPP terms that year, it is expected that India will soon overtake it to become the third largest economy in PPP terms.

However, India's per capita income continues to be abysmally low, both in nominal and PPP terms. The difference between the predictions of the investment bank's study and current PPP estimates of the World Bank is that according to the Goldman Sachs study, the Indian economy could be larger than that of Japan by 2032 in terms of nominal U.S. dollar.

The study predicts that the size of the BRIC economies could exceed that of the G-6 countries, consisting of the U.S., Japan, Italy, France, Germany and the U.K., by 2039. Of the G-6 countries, only the U.S. and Japan may remain among the six largest in U.S. dollar terms by 2050. China could be the largest economy by 2041.

Table I provides US$ GDP projections while Table II provides per capita US$ projections of the BRIC countries as well as that of the U.S., Japan and Germany.

Basis of prediction


The study assumes that the rise in GDP in US$ terms of the BRIC countries will come from a mix of rise in real GDP and currency appreciation. The Goldman Sachs study basically uses a growth model in terms of labour, capital stock and the level of `technical progress' or `total factor productivity' to arrive at growth projections. Further, the model of real exchange rates is calculated from the predictions of labour productivity growth. This is because currencies tend to rise as higher productivity leads economies to converge on PPP exchange rates.

The BRIC economies at present are way below their PPP rates. It is true that a pegged exchange rate (for example, the Chinese yuan peg against the dollar) may distort the picture. In practice, the study presumes that real exchange rate appreciation may come from a combination of nominal appreciation and higher inflation.

About two thirds of the increase in US$ GDP terms will come from higher real growth with the balance through currency appreciation. The BRIC's real exchange rates could appreciate by up to 300 per cent over the next 50 years, or at an average 2.5 per cent a year. India's exchange rate is assumed to appreciate by 281 per cent during this period.

The present economic powers are mainly the U.S., the European Union countries and Japan. Given the size of the population of the BRIC countries, their long-term economic success would also have a major impact on the power equations in the world.

Changing demography


According to the study, India has the potential to grow the fastest among the four BRIC countries over the next 30 to 50 years � higher than 5 per cent over the next 30 years and close to 5 per cent as late as 2050.

A major reason for this is that the decline in working age population will happen later for India and Brazil than for Russia and China. For example, it is predicted that in 2010, India will have a high 53.9 per cent of its population in the age group of 15-59 years.

The predictions are not unreasonable. As the report points out, South Korea's GDP increased by nine times between 1970 and 2000; these projections are tame by comparison. In fact, except for Brazil, the other three economies are already achieving this kind of growth rates.

A basic assumption of the study is that the BRIC countries maintain policies and develop institutions that are supportive of growth. These include sound macro-economic policies and a stable macro-economic background (low inflation, supportive government policies, sound public finance and a well managed exchange rate), stable political institutions, openness and high levels of education.

The BRIC report is timely, especially in the Indian context. Recently, India witnessed its foreign exchange reserves crossing US$ 100 billion. However, this is not an unalloyed blessing as there has been considerable upward pressure on the rupee.

This year India will probably achieve a GDP growth rate of around 7 per cent, mainly on the back of a rise in agricultural output on account of bountiful rains.

However, if the country is aiming for a growth rate of around 7 per cent per annum over the next decade, then it will need an investment rate of about 28 per cent given an Incremental Capital Output Ratio (ICOR) of 4.

To achieve an investment rate of 28 per cent, the country will have to increase its domestic savings rate to around 25-26 per cent and meet the balance from a current account deficit.

By running up a current account surplus and building excessive reserves will not increase GDP growth rates. For higher growth, policies that result in foreign exchange inward remittances in various forms being invested in the Indian economy will have to be introduced. Given the low per capita incomes and widespread poverty, the `India Shining' campaign seems rather premature.

Historical opportunity


Given the comparative advantage of a skilled workforce available at low costs, backed by huge foreign exchange reserves and foodgrain surplus, India has a historical opportunity to fulfil the BRIC report predictions.

However, many things can go wrong even with reasonable projections, especially over a long time horizon. In the case of India, both the government and the private sector need to increase investments in education.

Fiscal deficit also needs to be brought down with a mix of expenditure control and better tax compliance. India cannot be complacent on the economic reforms front.

Even with the kind of prediction provided by the report, India's per capita income will continue to be the lowest among the four BRIC countries, and far lower than those of the developed nations.

One interesting aspect of the predictions is that by 2030, the largest economies of the world may not be the richest, in terms of per capita income.

Year 2000 2015 2025 2040 2050
Brazil 4,338 4,664 7,781 16,370 26,592
China 854 3,428 7,051 18,209 31,367
India 468 1,149 2,331 8,124 17,366
Russia 2,675 8,736 16,652 35,314 49,646
Japan 32,960 38,626 46,391 55,721 66,805
USA 34,797 45,835 52,450 69,431 83,710
Germany 22,814 29,111 32,299 40,966 48,952



Year 2000 2015 2025 2040 2050
Brazil 762 952 1,695 3,740 6,074
China 1,078 4,754 10,213 26,439 44,453
India 469 1,411 3,174 12,367 27,803
Russia 391 1,232 2,264 4,467 5,870
Japan 4,176 4,858 5,567 6,039 6,673
USA 9,825 14,786 18,340 27,229 35,165
Germany 1,875 2,386 2,604 3,147 3,603

[john wesley]

and we have the Yellowstone super volcano due.... one sneeze and America would be wiped out from face of the earth ....literally

[Frank Silbermann]

Originally posted by R K Singh:
I doubt that population plays any role in being major player in world politics. Its about how much a country can interfere in others matter and how much value is given to her voice. How much it can control the world to be in its favor.

It's hard to believe, but 300 years ago the Dutch were a major world power.

About thirty years ago National Lampoon magazine did a satire on "The Protocols of the Elders of Zion" with an article alarming people about the Dutch conspiracy to take over the world. As I recall, their plan was to render our youth soft and fat from too much cheese and chocolate, and to sell us electric shavers that are programmed to grind up our faces when issued the secret command. Then their soldiers would come over here and saw all our doors in two. The article "outed" a number of Dutch infiltrators who had risen to great power in America (including the Theodore and Franklin Roosevelt).

[Ashok Mash]

Originally posted by john wesley:
and we have the Yellowstone super volcano due.... one sneeze and America would be wiped out from face of the earth ....literally

Yellow Stone! I wonder if the pressure built up under Yellow Stone region has anything to do with the ever increasing combined weight of Chinese and Indian population on the other side of the planet!

And chances of foreign investors and returning expatriate Indians stepping on Yellow snow on the streets of Indian cities (and taking their money out of India) is as regular as a clock-tick compared to the probability of an super eruption at Yellow stone!

[peter wooster]

Do I smell a bubble?

A few years ago everyone said that the IT industry had nowhere to go but up, we were living in a "new economy", now it's China and India that are the "new economy".

In the past it's been silver, real estate or tulips, the rule is that nothing can grow forever at a high rate, something has to give.

You know it's a bubble when no one will even consider the possibility.

[R K Singh]

Originally posted by peter wooster:
Do I smell a bubble?

I smell a bubble too ..

[Roger Johnson]

Originally posted by Manick Batcha:
India set to rank third by 2040
Given the comparative advantage of a skilled workforce available at low costs, backed by huge foreign exchange reserves and foodgrain surplus, India has a historical opportunity to fulfil the predictions, says Abhijit Roy.

who is Abhijit Roy?

[R K Singh]

Originally posted by Roger Johnson:
who is Abhijit Roy?

did you read that ??

[Roger Johnson]

Originally posted by R K Singh:


did you read that ??

no i did not, did you? comment regarding india from an indian will be mostly likely biased
[ May 05, 2005: Message edited by: Roger Johnson ]

[R K Singh]

Originally posted by Roger Johnson:
who is Abhijit Roy?

He is Investment analyst :roll:

[R K Singh]

Originally posted by Roger Johnson:
no i did not, did you? comment regarding india from an indian will be mostly likely biased

[R K Singh]

I mean true..

[john wesley]

Originally posted by Ashok Mash:


Yellow Stone! I wonder if the pressure built up under Yellow Stone region has anything to do with the ever increasing combined weight of Chinese and Indian population on the other side of the planet!

And chances of foreign investors and returning expatriate Indians stepping on Yellow snow on the streets of Indian cities (and taking their money out of India) is as regular as a clock-tick compared to the probability of an super eruption at Yellow stone!

Well, when every one here was writing off America I too though of another very real reason to write off America. However, deep down I still believe America has enough to keep leading until 2040 � Chinese can be production champ but not a leader. India, , well she is been grossly overestimated. Whatever �new economy� they talk about is just a byproduct of the outsourcing industry �you would be surprised to know actual figures of software/services for the domestic market.
[ May 05, 2005: Message edited by: john wesley ]

[Jeroen Wenting]

I didn't forget Australia. Australia has never played a real role in the world (except possibly as a place to base US and Dutch submarines to attack Japanese shipping during WW2) and I don't see them taking a more active role in the future.

[Roger Nelson]

I do not see china overtaking or even being close to america in the near future, though it may be a force you cannot ignore.
I believe compared to all other nations, the US has got it fundamentals right.
i.e. a nation that encourages innovation, enterprenuership, freedom of rights, transparent justice system, less corruption, overall an enviroment for success to thrive.
I think as longs as US sticks to this it would be difficult for any other nation to compete.
comparing china there's always the government factor, who knows when chinese people may need a new form of government, and that may introduce new changes/possibilities.
And India IT software services looks good , will this trigger making a great economy? a lot of work needs to be done on the government, corruption, infrastructure

[R K Singh]

Originally posted by Roger Nelson:
i.e. a nation that encourages innovation, enterprenuership, freedom of rights, transparent justice system, less corruption, overall an enviroment for success to thrive.

Do you know even Pakistan supports all this [forget that it is ruled by a dictator... opssss sorry Militry head ]

So what so special about US other than money
[ May 08, 2005: Message edited by: R K Singh ]

[Gerald Davis]

England also supports those values also; however, military spending is for too high at 11% of all taxe income.

[Roger Nelson]

Do you know even Pakistan supports all this [forget that it is ruled by a dictator... opssss sorry Militry head ]

I think the difference lies in the fact that supporting is one thing, and getting it practically implemented is a different ball game, and I guess once you have the fundamentals right money automatically follows :-)

England also supports those values also; however, military spending is for too high at 11% of all taxe income.

A lot of developed european nations may have the right government, infrastructure, etc but the economy is not thriving as the US.
I guess england may have stopped becoming competitive after industrial revolution, but US have been always innovative, bringing new technology in to the markets and selling it out to the world.
I think though population(consumer) and size(resources) may be key factors, but its always been suprising how smaller countries like japan and singapore have larger economy compared to other bigger nations?
size does not matter? -)

[R K Singh]

Originally posted by Roger Nelson:
I guess once you have the fundamentals right money automatically follows :-)

Any support for statement

[Dave Lenton]

Originally posted by Roger Nelson:
I believe compared to all other nations, the US has got it fundamentals right.
i.e. a nation that encourages innovation, enterprenuership, freedom of rights, transparent justice system, less corruption, overall an enviroment for success to thrive.
I think as longs as US sticks to this it would be difficult for any other nation to compete.
comparing china there's always the government factor, who knows when chinese people may need a new form of government, and that may introduce new changes/possibilities.

Although these characteristics will give a nation a tremendous advantage on the international stage, they may not be the only path to superpower. The USSR was a superpower for quite a while missing quite a few of the above. Going further back into history, there are examples such as pre-war Japan, ancient China, Rome etc which have all been super powers without some of these characteristics.

Despite that, I do think that these kind of characteristics will make the US powerful for quite some time.... although this is not assured. The basis of US power is its economy. Who knows what could happen if the world economy was to undergo something like the Great Depression of the 1930's again. In such a situation, countries which rely on an economic power base may be at a disadvantage in comparison with countries with alternative routes to power. Before the world wars, the British Empire was an economic power house, with tremendous power. To a person at the start of the 20th centaury, it would have been unthinkable that the UK would not be a superpower for a long time, but life has a way of proving assumptions wrong. Who could have predicted the two world wars, the worst pandemic in recorded history, major political upheaval, revolutions etc which changed everything? Just about anything could be around the corner......

[Axel Janssen]

Originally posted by R K Singh:


Any support for statement

Ravish,

I think this refers to something called "neo"-liberal agenda in our time.
Can't understand how comes that ideas more than 200 years old are prefixed with neo

State should not do "sophisticated" fine tuning with lots of laws and assistance programs to foster economic development, but provide security and some basic institutions like currency and basic rules over which market economy can run.
The free market automatically drives the factors of production where they are most effective for growth of the country.
Too much fine-tuning with laws and assistance programs create only vested interests in some artificially created privileges for people who contributes themselves little for national development.

As far as I am informed: Hasn't India deregulated a lot elements in their economic & trade politics 15 years ago?

[Axel Janssen]

Originally posted by Roger Nelson:

smaller countries like japan and singapore have larger economy compared to other bigger nations?
size does not matter? -)

Careful.
Population according to world fact book from CIA:
Japan: 127,417,244 (July 2005 est.)
United States: 295,734,134 (July 2005 est.)
China: 1,306,313,812 (July 2005 est.)
India: 1,080,264,388 (July 2005 est.)

If you call Japan a small country, Indians and Chinese can come and call USA a small country. Would Americans like that

no anti-american intentions. Just math stuff.

Axel

[Frank Silbermann]

Originally posted by Dave Lenton:

Although these characteristics will give a nation a tremendous advantage on the international stage, they may not be the only path to superpower. The USSR was a superpower for quite a while missing quite a few of the above. Going further back into history, there are examples such as pre-war Japan, ancient China, Rome etc which have all been super powers without some of these characteristics.

A government's power is limited by the wealth and manpower at its disposal. Manpower is measured in size, skill, and morale.

America is very prosperous, so its government is able to put a great deal of wealth at its disposal without requiring too much sacrifice. There are few, if any, countries that have _both_ more people _and_ a higher average education level. (Several countries are stronger in one measure but weaker in the other.) It has long added to its population by assimilating immigrants. And a great many Americans are still patriotic.

Another factor is that America has been rather thrifty in its use of power. By this I mean that in international relations the U.S. tends to set rather limited goals (accepting win-win agreements), and tries not to apply more power than necessary to achieve them. For example, the goal of the U.S. is not to turn the Iraqis into the American vision of an ideal society, or to confiscate their oil wealth, but simply to eliminate the worst horrors of Saddam's regime and convince Iraq to stop being a regional troublemaker. The Soviet Union, Nazi Germany, and Imperial Japan, in contrast, forced other countries to choose between resistance to the death versus complete and utter submission.

Of course, a government can also become powerful by increasing the proportion of a country's manpower and wealth that it puts at its disposal, through high taxes, confiscation of property, conscription of labor and soldiers ("more guns, less butter"). The 17th century Dutch, the 19th century English, and 20th century America were unusual among world powers in that they relied on this approach much less than most world powers.

A country can also add to its wealth and population by conquering and looting weaker countries. The U.S. added to its natural wealth by expanding westward in its first century, but for the last hundred years has not relied on expansion. Russia similarly expanded under the Czars, and the Soviet Union never stopped trying to expand until it collapsed.

Despite that, I do think that these kind of characteristics will make the US powerful for quite some time.... although this is not assured. The basis of US power is its economy. Who knows what could happen if the world economy was to undergo something like the Great Depression of the 1930's again. In such a situation, countries which rely on an economic power base may be at a disadvantage in comparison with countries with alternative routes to power. Before the world wars, the British Empire was an economic power house, with tremendous power. To a person at the start of the 20th centaury, it would have been unthinkable that the UK would not be a superpower for a long time, but life has a way of proving assumptions wrong. Who could have predicted the two world wars, the worst pandemic in recorded history, major political upheaval, revolutions etc which changed everything? Just about anything could be around the corner......

Yes, but the basis for the U.S. economy is its culture -- its political, religious, and social philosophy. This was also true for 19th century Great Britain.

The two world wars reduced British power by depleting ability to raise armies. That was fatal for its status as a colonial empire, but it could have remained an economic powerhouse. What happened is that the spiritual basis for England's power -- the Protestant work ethic -- dissolved along with its Protestant religious fervor. Poor people feel no shame in taking charity, and the children of the wealthy squander their wealth on luxuries. Even though who inwardly continue to harbor the old beliefs have lost their assertiveness.

America remains prosperous because large numbers of people retain a mentality much like that of 19th century England. Much of the political discord in this country is between those who want to keep things that way, versus those who want America to follow in Great Britain's footsteps.

[Roger Nelson]

A government's power is limited by the wealth and manpower at its disposal. Manpower is measured in size, skill, and morale.

I agree, gone are the days where countries could expand using there military strength, in this civilized and closely connected world, geographical boundaries are well defined, and any agression militarily will always be frowned upon and gets a lot of bad press.
on the contrary, having a healthy trade equation, makes a country powerful to some extent.
During the last century, the american economy have been booming which had endowed the american consumer with huge purchasing powers, which naturally creates a market in the US for other countries to sell their goods.
Probably on a smaller scale,the chinese and indian consumers are getting empowered with the manufacturing and IT booms, and no doubt deodorizing two billion armpits seeems so enticing :-)