0.3 Globalization  (Page 4/9)

In any case, the most recent wave of globalization that has drastically altered the face of the world economy since about 1980. The world economy of 2013 bears little resemblance to the world economy of 1950, or even 1980: consider this very short summary of the rapid evolution of the world economy under recent globalization.

Many countries were flat on their backs after World War II and the Korean conflict. At that time they had few good prospects. Some have now become powerful economic engines. Some are surprises; some we now take for granted. In the latter category: in 1954, South Korean per capita income was equal to Zambia’s per capita. By 2005, Korea’s per capita income was 39 times that of Zambia. Korea, with 1/20 the population of India, had a GDP total size almost equal to that of India in 2005. India itself has done well since it began its slow process of deregulation two decades ago, moving away from the “license raj” of 1947-1990.

In 1982, China’s per capita income was equal to India’s. Today, even with India’s strong economic record since 1990, Chinese GDP per capita was twice that of India. We can place the Chinese experience in further perspective. A favorite Mao Tse Tung slogan was: “surpass Britain, then America.” In 2007 China’s economy surpassed not only Britain but also France in size . China has the 2 ^nd largest economy in the world and could surpass the U.S. in size by 2030.

Consider also Southeast Asia—almost all countries there have prospered as never before. In the period 2005-2008, Indonesia, Malaysia, Vietnam all had growth close to 6%. Thailand was a laggard: “only” 4.7% percent.

In Latin America Chile displayed unusual economic strength from 1983-2014. Brazil has been growing but began sputtering in 2013. Argentina is sliding toward yet another collapse (a recurring development since Dictator Juan Perón’s first term in power beginning after World War II). Bolivian development has once again stalled, while Hugo Chavez and his successor ruined the Venezuelan economy. Mexico struggles with deep divisions, but has experienced growth in recent years.

What of Europe under globalization?

“Eurosclerosis” gripped the continent for the years from 1990-2005. Per capita GDP in the continent’s three largest economies before 2007 had been falling relative to the U.S. On average, per capita income for Germany, France and Italy together was 80 percent of the U.S. in 1990. By 2005, per capita income in these three together was only 68 percent that of the U.S. If current trends continue, the average U.S. citizen will be twice as rich as a German or Frenchman by 2025. Since 2011, significant growth in Germany has resumed. Except for Germany, and to an extent Poland, Europe has experienced relatively few benefits of recent globalization. See Alexandra Spitz-Oener, et al. (2014, Winter), “From Sick Man of Europe to Economic Superstar: Germany’s Resurgent Economy”, Journal of Economic Perspectives, 28(1): 167-188.