mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
Economist Warns Bricophiles: Trees Do Not Grow To The Sky

Junk securities were bad enough; Goldman Sachs also favored the world with junk concepts during the last ten years.  The idea of BRICs (Brazil, Russia, India and China) as emerging economic giants soon to dominate the world launched a thousand columns and 36 million Google hits the last time I checked.

The Mead take: Russia isn’t emerging — it’s still in decline.  Brazil isn’t playing in the same league as India and China, and India and China tend to balance each other out rather than elevate either or both to the leadership of world affairs.

It’s easy to see why the Bric meme has legs.  A quick look at the economies of the developed world tells a pretty depressing story: debt crises, unemployment, and predictions of sustained slow growth abound.

Contrasted with development success stories over the past decade in emerging markets (drop Russia, add Turkey), it is understandable that so many in the punditsphere have predicted that these developing economies are on an ineluctable path towards overturning the international order that has existed since at least the Industrial Revolution.

Economist Dani Rodrik has some timely words of caution for the Bricophiles. Though many developing countries have recently experienced rapid economic growth, Rodrik observes that the recent past was an exceptionally favorable period — and that the good times don’t always last.

One of Rodrik’s key insights is that many of the predictions of today’s economic futurists are extrapolations based on recent history.  A bad mistake: the one thing we do know about the future is that it will surprise us.

Features Icon
show comments
  • Luke Lea

    My take: “Russia isn’t emerging — it’s still in decline. Brazil isn’t playing in the same league as India and China, and India [isn’t in the same league as China]. 🙂

  • David Hoffman

    If you want to know how accurate predictions of the future are likely to be, go back maybe 30-50 years and read what they were saying about out time.

  • Toni

    One of Rodrik’s insights struck me as pertinent to the US and other distressed economies of the West.

    “But igniting and sustaining rapid growth requires something more: production-oriented policies that stimulate ongoing structural change and foster employment in new economic activities. Growth that relies on capital inflows or commodity booms tends to be short-lived. Sustained growth requires devising incentives to encourage private-sector investment in new industries – and doing so with minimal corruption and adequate competence.”

    The US is having trouble sustaining middling economic growth because it lacks the very factors cited. Rampant corporate cronyism (practiced by both parties) is corruption laid down in law. The current administration lacks adequate competence to balance its regulatory pursuits with enabling an economic recovery.

    The history of economic success is the history of innovation and competition. What saps innovation and hobbles competition dampens economic success. That’s *really* an inconvenient truth.

© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service