
What should the US and Europe do about the relative decline of their global influence? My guest this week, CGD senior fellow Charles Kenny, has a surprising answer in his new book, . His take? Embrace it. “The opportunities of a...
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A
Welcome to the Global Prosperity Wonk cast. I'm Lawrence MacDonald and I'm delighted to have with me in the studio today Charles Kenney. His latest book is the Upside of why the Rise of the Rest Is Good for the West. Charles, welcome to the show.
B
Thank you for having me.
A
Again, this is your fourth book and we were discussing before the previous books and I think that, well, we should say maybe the book before this was getting why Global Development Is Succeeding and How We Can Improve the World even more. But mention the first two books because I contend that one thing that is definitely getting better is your titles.
B
So the first book was called Overselling the Web and the second one was called Life, Liberty and the Pursuit of Utility. And I have to agree with you.
A
And we've gone from a little bit of rhyme with Life, Liberty and the Pursuit of Utility to some good, I guess, alliteration and rhyme. The Rise of the Rest is Good for the West.
B
Very memorable. The less I have to do with writing the titles, the better they get.
A
I want to start by asking you to read a paragraph that I read today as I was finishing up the book, because I think that it does a really nice job of summing up the main argument for readers who are reading along with us at home. It's on page 197.
B
Thanks. The opportunities of a wealthier world will also be far easier to grasp if the west stops trying to reverse the inevitable flow of its relative decline and moves to channel it Instead, rather than focusing on retaining or regaining top nation status on anachronistic measures of influence like aggregate output, policymakers would be better employed seeking to maximize America's and Europe's benefits from a richer, healthier, more educated and safer world.
A
So there we have it. The thesis of the book, as I understand it, is that the U.S. which is, you know, Americans, often celebrate USA as number one in the Olympics and elsewhere. And one of the measures of number one has been having the world's biggest economy. That's a place that we have either ceded or will soon cede to China. And you argue that it's not a meaningful measure and that like Britain, we should decline, accept our relative decline gracefully and embrace those policies that are going to make both us and everybody else better off. So I have nothing, no argument with that thesis because I never really thought that having the biggest economy in the world was a meaningful measure of anything. But I gather a lot of people do.
B
Yeah, I think so. I would accept that this book, probably a lot of people who know CGD well will go, yes, obviously. But I think in the broader world a lot of people do sort of think about the global economy in zero sum terms still that if China is up, we must be down. It's like if the Democrats are up, the Republicans must be down. If China is up, the United States must be down. In terms of global gdp, the difference between the two is there are only a certain number of seats in Congress, there's only one president at any one time. GDP doesn't have a limit to it. So it's not as if you take away $1 of GDP from the United States and you have to give it to China and we stay equal. The world has seen a massively expanding global economy and that's in the best interest of the United States to see it continue.
A
It's not only us chauvinists and geostrategic thinkers who take this point of view. Our colleague Arvind Subramanian's very successful book Eclipse argues that when China's economy surpasses that of the United States, so will its global power. And he makes a big deal out of this story of the waning of British influence with the Suez crisis, where Britain was still bestriding the world like a colossus, no longer had the economic basis to do it, and the Americans sort of put the Brits in their place.
B
I'm much in debt to Arvind. Arvind, amongst many CGD colleagues plays a big role in the book. And as you mentioned, his earlier book Eclipse and a lot of my forecasts for what the world will look like are basically lifted straight from his book.
A
So you use his GD growth projections, but you reach a rather different conclusion about what it means for the west and for Americans in particular.
B
Well, not a hugely different conclusion. I think Arvind is also basically thinks China growing is net a good thing for the planet. I would say that much like happened to the UK as its economy shrunk, the United States will lose some global influence. Absolutely. As China's GDP overtakes it and maybe eventually as India's GDP overtakes it. But I'd also say that if you look at Britain with less global influence, it's also just a much nicer place to live than it was when it did control a quarter of global trade. Controlling a quarter of global trade did not mean that most Brits lived above any modern Western poverty line. It did not mean that women had the vote in Britain. It did not mean that most Brits finished secondary school, let alone going to college. It did not mean that child mortality wasn't at levels that we'd find completely shocking today. Basically it was wonderful for the Prime Minister and for Queen Victoria to be able to call herself Empress of India. How much that actually did for everyday Brits is really arguable.
A
I'm going to make a little detour here because some of our listeners know you and many do not. And you obviously have what would sound to the untutored American ear like an English accent. So I want to get personal here because I think I often refer to you as our resident optimist. I'm not the only one who does that. But I think that you're background informs how you see the world. And I'm thinking about two things here. First, the international milieu that you come out of and you have actually a chapter in here in which you basically encourage Americans to get the heck out of the United States and take advantage of the rest of the world. But if you don't mind, tell me a little bit, tell our listeners a little bit about where you came from, what your family's comprised of now.
B
Sure. So my mum went to Vassar and was in the Vassar choir and was on a tour of Britain where my dad lived at the time, singing.
A
So your mom's American?
B
My mom's American.
A
Their eyes, you have to say my mom is American.
B
My mom. Sorry. Oh gosh, don't have me try and do an American accent. It'll all go horribly wrong. People will turn off in droves. But their eyes met across a crowded concert hall and they fell in love and so they got married. And so I have been in the immensely fortunate situation from birth of being a citizen of the United States and a member of the European Union, if you will. So I'm, you know, born very, very, very lucky that way.
A
And your own marriage has continued this international tradition?
B
Indeed. I came back across the Atlantic and married Pamela who's an American but also has rights to Argentine citizenship because her father is from Argentina. My brother met his now wife in Hong Kong and they. She's American, you know, she's American but with Chinese ancestry. He's British, Anglo, American. So sort of from all sides. I get the advantage of a global world.
A
You get the advantage of a global world. And you are the father of, is it two.
B
Two daughters who are obviously, you know, I suppose theoretically at least have rights, are Argentine, US and British and probably Irish citizenship. And my brother in law and his wife, another American, Scottish, in that case, transatlantic relationship. I now have a niece born two Daughters born in the United States and a niece born in the uk.
A
So I'm thinking also of the age of your beautiful daughters because from time to time I get the good fortune to see you walk past when they visit the office. And yesterday was a snow day and you said, I'm not going to be here. I think I'll be sledding there. How old?
B
Six and three.
A
Yeah. So I remember when my own children were close to that age. And it's a really good time to be an optimist when you're the father of wonderful small children. So congratulations to you on that.
B
Well, thank you. And they are wonderful small children.
A
So my question then is, you know, has that given you rose colored glasses? You're on top of the world. You're from an international background, you have all these benefits, you've got these wonderful small children who I'm sure are, you know, looking forward with great delight to the world ahead of them. But the world can be a pretty grim place.
B
Absolutely. And you know, I won the birth lottery and my kids, frankly, have won the birth lottery for the human species. I am in an incredibly fortunate space. And I certainly don't mean to suggest there aren't lots of people in the world living lives of absolute misery. And what makes it even more shocking is that we know how to do something about that, and, you know, we haven't. That there are still people living on less than $1.25 a day when we have ways to deal with that problem, I think is absolutely shocking. That there are still hundreds of thousands, millions of kids each year dying from very easily prevented diseases is shocking. I would just say that over the last 20, 30 years, we've seen more progress against those evils of poverty than any time before in history by a huge margin. And there are lots of reasons to think that we can continue seeing that progress in the future.
A
This, of course, is the message of your prior book, Getting Better, and I urge people to read that. I think it's a very important statement, leads very well into the Upside of Down. And it occurs to me as you're talking about there's still great immense suffering, we have the means to overcome it. That there's a little bit of a bait and switch in the Upside of Down because it ostensibly addresses Americans and then sort of says, you know, the same argument applies to Europeans, that it's okay that other countries are growing fast and to make the most of that, you need to embrace certain kinds of broadly construed internationalist policies. But your real agenda Here is not that Americans and Europeans should feel okay and adjust well to their relative decline. Your real agenda is that they should embrace policies that are going to improve the lives of people who are still in misery.
B
Busted.
A
I mean, when I actually look at the policy prescriptions, I'm thinking in particular of the trade discussion, which I found fascinating, where you talk about the US and the Europeans dragging their feet, disengaging from the wto, going for these bilateral or multilateral agreements, and in particular how the US trade policy has now been captured by Big Pharma, Hollywood and the tobacco industry. And so every agreement that we go into is pushing for longer and more stringent intellectual property. Right. Protection, which is something that Big Pharma wants for its medicines and Hollywood wants for its production and for greater access for American tobacco. I mean, that's pretty small thinking. And it's also very bad for the people who are on the receiving ends of those deals.
B
But let me. While I admit that perhaps my primary interest really remains developing countries, and that's one of the reasons I'm at CGD and delighted to be here, the great thing about how the world has changed over the last 200 years is the idea that there's a sort of trade off between being cosmopolitan, being generous to others and being selfish to oneself has gone away. Owen Barter, who runs the Commitment to Development Index here at cgd, talks about the CDI that way. He says that sure, you can see the Commitment to Development Index as a measure of how generous are rich countries towards poor countries, but actually that's not a very good way of looking at this measure. That really what it's about is rich countries thinking about their own long term best interests which actually happen to match up in a positive sum world happen to match up with what is good for developing countries. So to take the example of intellectual property rights at the moment, in a very narrow sense, you might argue that the United States would do well pushing its obscenely long copyright terms on the rest of the world. Because at the moment the United States runs a trade surplus, if you will, in intellectual property. So it gets more money in royalty payments than it pays out, for example. That's true now. But as the rest of the world gets richer, as they innovate more themselves, that US trade surplus and innovation is going to shrink. Now it's going to be great for the United States, right? There's more inventions for everybody. Quality of life will go on and so on and so forth.
A
More and better Bollywood.
B
More and better Bollywood, absolutely. But Actually, in the long term, the United States doesn't really. It's not in the United States interest to look for these hugely long copyright and patent terms because in the long term we'll be receiving as much of our intellectual property as we are selling.
A
That's going to come around and bite us in the behind.
B
Absolutely. So what my call is for is not, oh, let's be compassionate. My call is let's be sensible about where we're going in the long term and think of our long term best interests. As it happens, our long term best interests align with doing good things for development. But that's almost coincidence because I threw.
A
Out the tobacco trope. Tell me the long term best interest in tobacco because you cite Tom Boykie who was previously here and is now at the Council of Foreign Relations with to me, very alarming and disturbing fact that nearly every U.S. bilateral trade agreement has included some battering down of regulations on tobacco to make it easier for American companies to do what they can no longer do here, which is to advertise their product and get people addicted.
B
Yeah. And in the long term, I don't think it is good for the United States to have the reputation of a country that would rather put a few trade dollars ahead of the public health of its trading partners. You don't want to be the ugly American in that way. The United States as a place and as a people is hugely is loved around the world. People love US Movies, people have high opinions of individual Americans.
A
People are nice. When I travel, I'm sometimes a little embarrassed being a liberal, but mostly people are pretty nice.
B
Yeah, US Policy doesn't have such a good image around the world. And as we go forward, that kind of gap between views of U.S. policymakers and views of U.S. people I think matters more and more because actually one of the things that's going to make the United States remain a dynamic economy in the future is actually just being a popular and great place to live. That's the way you attract the best talent. That's the way you attract tourist dollars. That's the way you get better trade deals, that kind of thing. So really we need to focus on being nicer again. Not just because it's the right thing to do, but because it's a sensible thing for us to do long term.
A
We're going to take a quick break. I love reading your stuff, Charles. I love talking to you. You lift me up because I am by nature perhaps a little more pessimistic than you are. But I can't resist attempting to poke holes in your thesis as much as I want to believe that it's true and find it incredibly persuasive. So when we come back, I have to what I think might be tough questions for you. This is the Global Prosperity Wonkcast from the center for Global development. I'm Lawrence MacDonald and I have the pleasure today of chatting with Charles Kenny about his new book the Upside of why the Rise of the Rest is Good for the West. We will be back in a welcome back to the Global Prosperity wonkast. I'm Lawrence MacDonald. My guest today, Charles Kenny. He is the author of the Upside of why the Rise of the Rest is Good for the West. Charles, I said before the break that I was going to try to poke holes in your theory, but to put it even more cruelly, maybe and more vividly, poke a hole in your balloon. And I have two questions. The one won't surprise you, but I'm going to do the maybe surprising one first, and that is I feel very discouraged about the United States and it's not because our aggregate output is going to be smaller than China's. I feel discouraged about the United States for reasons that have to do with the capture of our political system by special interest and the infusion of money into American politics and the rise of ideology. And you know, this is not something CGD works on. But it if people are paying attention, they know all these things about Washington and it does have implications for US International policy because if we look at the example of tobacco and the trade deals that we discussed before the break, it's not that Americans have said we would like the United States to use its trade power in bilateral negotiations to batter down restrictions on tobacco marketing. It's because particularly well heeled interests have found the right people and the right ways to go about this to make trade policy work for them and against the interests of the United States. But we see this again and again in domestic policy. So while the relative decline of the US with the rise of the rest is not a concern, how do you feel about this other concern that the United States is become enfeebled and sort of corrupt in a way that is not necessarily illegal. We've basically legalized corruption. I'm fond of saying it's not a democracy, it's an auction.
B
This book does focus very much on the international dimension and it doesn't tackle, except in passing, a lot of incredibly serious issues the United States faces. I say that I don't think the rise in inequality in the United States is necessarily driven by globalization, although is partially, frankly driven by the lack of policy response to globalization in the United States. But I don't talk much about the fact that the poverty rate, however you measure it in this country, suggests that a whole bunch of people, maybe a seventh of the population, is no richer than they were when Johnson declared a war on poverty 50 years ago. That's an incredible failure of the US political system, in my opinion. And I, I don't talk much about it in the book and it's one amongst many and you've mentioned some others. I would say I'm not willing to give up hope, not even domestically, for all of the problems with Obamacare, for all of the fact that the reaction to the 2008 crisis could have been better, faster and more complete. Congress did get some stuff done and some fairly big stuff. I think when push comes to shove and it's urgent enough, things can perfectly but better than the doubters might have expected. And I hope that that's the kind of spirit that kind of gets us through the transition from being top nation to being one of the top nations. I hope that's true. Now, I have to admit just last week, as Nancy pointed out on the CGD blog, Congress decided that it wasn't actually going to do anything about funding the International Monetary Fund. Now, the imf, not a perfect organization, but I think has played a very important role in keeping the euro and stopping a complete financial crisis in Europe. Re emerging is a pretty important US Global economic goal. You know, the fact that Congress would basically take away one of our key players in that fight, say, you know, we don't care about it, and that.
A
Wouldn'T even cost us anything. The money's already been put on the table. All we had to sort of say is, yes, please proceed. Yes, somewhat analysis was sort of in favor of let's just get this done right.
B
So, you know, I don't want to be too rosy eyed about this. I accept there are problems. But you. My hope is we can bully through. It will not be pretty, it will not be elegant, and it will not be perfect, but the United States will do enough that not only can it benefit from this growing world, some also it won't stand too much in the way of the rest of the world getting better in the future.
A
Okay, you've persuaded me on that one. Now for the polar bear in the room. And you know this is coming because you know that, you know, I'm preoccupied sometimes with climate change. You have, I think, an excellent chapter on climate Change and on environmental constraints in general. And I'm just going to accept the first point because I totally agree with it that the notion that we're going to have peak anything and run out of minerals or resources of any type was I think just not borne out by history. We have these long term declines in the price of commodities because technology keeps making it easier to extract them. And you also argue that improved productivity in agriculture and better utilization of water means we're not really going to face resource constraints. But then we have this big bugaboo, the polar bear in the room, which is the overloading of the atmosphere. And one that I think you don't mention at all is the acidification of the oceans, which is of course related problem as carbon is absorbed into the oceans. Why should my 21 year old daughter in San Francisco, who shares my alarm about this, not feel alarmed? How should she feel optimistic?
B
She should feel alarmed. I think that there are all sorts of reasons out there why people fear the rise of the developing world population, I don't know, military dominance, that one job, there is one less job here that are wrong. There is one somewhat legitimate fear about a growing global economy and especially in growing developing countries, which is if they grow the way we grew up, we are going to toast the planet. And I think there's no two ways about it. And as you say, it's not just toasting the planet, it's acidifying the seas. I mean there are a bunch of knock on effects and this is something that we should be very concerned about. My reason for optimism, such as it is, is that developing countries aren't growing the way we used to grow. If you look at the largest producer of solar cells in the world, it's China. If you look at the largest consumer of solar in the world, it's China. Solar cells in the world, it's China. They are already taking steps way in advance of any steps we took until we were way richer to deal with environmental problems. If you look at popular opinion polling in China, the percentage of people who say yes, I'm willing to give up some of my money in order to improve the environment is twice what it is in the United States. There are reasons to believe that developing countries are taking this stuff way more seriously than we did. Now that alone is not enough. And it's not enough for two reasons. One is we do not want to fix the climate on the back of the poor, poor people, especially in Africa, they consume far, far, far, far, far less energy than we do. Todd had that wonderful Todd Moss, CGD had that wonderful blog a while ago, pointing out that his fridge uses more electricity than the average African consumes in a year in a.
A
This is his new high efficiency fridge.
B
And this is his new high efficiency fridge. So we should not stop them getting access to electricity. We darn well should help them get access to electricity in a manner that is sustainable because that's in our own self interest and we're not stepping up to the plate. So I'm not saying it's all perfect. I am saying there are reasons for hope. And it is somewhere where, once again, the United States has a leadership role still. Even if it's not going to be the largest GDP in the world forever, it's still a massively rich country that has a vital global role to play, not only in dealing with its own carbon emissions and sustainability problems, but helping the rest of the world get on to a sustainable carbon path. I absolutely agree with that.
A
There's one passage in your environment chapter that I actually liked quite a lot and that was where you talked about the fact that the solution may not come from a globally binding deal, but from a series of ad hoc initiatives. And you have a whole string of things and you do a really lovely job and I'll probably mess it up. But you paraphrase Margaret Mead, her famous quote, of course, and you say, you know, have no doubt that a small number of committed states can change the world. Indeed. Nothing else. No, nothing else ever has. And of course, what Margaret Mead would say, individuals. Yeah, or citizens. But then you go on to give some examples of small states doing things both in the past and in the current situation. And I guess there has been so much focus within the climate policy community on the global talks and they have been so disappointing. They have essentially, like the trade talks, failed. Sketch for me some of the alternative, an alternative scenario where we could get action to rapidly reduce emissions, but maybe not ever have a global agreement.
B
Right. So, I mean, one of the historical examples I use is the slave trade. Right. Actually, the world didn't come out against the slave trade. A couple of countries decided, right, that's it, we're getting rid of the slave trade. And it kind of happened. I don't think climate change is that easy. Having said that, a couple of countries.
A
Being uk, which used its navy then to suppress the transit in particular.
B
Yeah, I don't think it's quite so easy with climate change, but I do think, you know, the fact that California is setting emissions targets, the fact that Europe did the. That fact, the immense global effort for for profit reasons to develop better renewable fuels, better renewable energy sources. When you sort of add these things up, maybe they come to most of the way. I don't think, certainly not so far have they come all the way. I think they've probably come maybe, you know, halfway in the most optimistic accounting. But you, you come some way and if we can keep on doing more of that, I think we can get there. And David Wheeler, ex of cgd, had this proposal on carbon added taxes. You don't actually need the world to agree on a carbon tax. All you need is certain countries to say that's it, we're going to tax the carbon content of your products. So there are ways to deal with this problem, research, carbon added taxes, so on and so forth that don't take a global agreement. And frankly, as you say, given the way the global agreements are looking at the moment, maybe that's where we ought to be putting our focus.
A
I think we're going to leave it there. I can't urge you enough to get and read Charles Kenny's book. We are going to have a launch of the book here. Nancy Birdswell, our president, will be hosting that. Charles is going to read a bit and discuss the book and then we'll open it to questions from the floor. And that is Charles, do we know the date? 28 the 28th. We're going to correct this if it's wrong in the wonk cast on the written page, but we do intend to get this out before then. And if you're in or near Washington and you can possibly be here, I urge you to attend. And I suspect if you come with or buy a copy of the book that you can probably persuade Charles to sign it for you. Is that right, Charles?
B
Sure.
A
This has been the Global Prosperity wonk cast from the center for Global Development. My guest today is Charles Kenney. We've been discussing his new book, the Upside of why the Rise of the west is Good for the West. You can find the wonk cast online on itunes and on Stitcher. That's my favorite way to hear it. Just search for wonkcast or CGD and sign up to hear a new interview every week. Until next time, I'm Lawrence MacDonald. Thank you for listening.
Date: January 27, 2014
Host: Lawrence MacDonald, Center for Global Development
Guest: Charles Kenny, author and CGD Senior Fellow
Main Theme:
Exploring Charles Kenny's book, "The Upside of Down: Why the Rise of the Rest Is Good for the West," the episode challenges zero-sum thinking about global economic shifts. Kenny argues that the economic growth of developing countries benefits the West and the world at large, and outlines policy choices that can lead to shared prosperity.
Charles Kenny discusses the core thesis of his latest book: as countries like China and India rise economically, the West need not fear relative decline. Instead, the United States and Europe should embrace global development, shaping policies that are mutually beneficial rather than defensive. The conversation weaves Kenny’s personal story, optimism about global progress, critiques of Western policy, and the urgent challenges of climate change.
Summing Up the Argument
Kenny reads a key passage encapsulating his central thesis:
Zero-Sum Thinking Debunked:
Historical Comparison:
On Optimism and Privilege:
Broadening the Audience:
Critique of US Trade Policy:
Generosity & Self-Interest Intersect:
Ugly American Concerns:
Concerns about US Democracy:
Kenny’s Response:
Climate Risks Acknowledged:
Reasons for Hope:
Fairness to the Poor:
On Climate Diplomacy:
| Timestamp | Segment Description | |-----------|--------------------| | [01:26] | Kenny reads his thesis from the book | | [02:42] | Discussion on zero-sum thinking and global GDP | | [04:24] | The real impact of national economic dominance (UK historical example) | | [06:48] | Kenny’s international family background | | [09:36] | Optimism about global progress against poverty | | [11:21] | Critique of US trade policy and narrow interests | | [12:23] | Alignment of generosity and self-interest | | [14:07] | Long-term interests: Tobacco policy and reputation | | [17:54] | Concerns about US democracy and special interests | | [18:14] | Kenny’s nuanced optimism about US political system | | [22:00] | Climate change as the legitimate global fear | | [23:54] | Energy poverty and fairness in climate action | | [27:12] | Alternatives to global climate deals (ad hoc action) |
Tone: The discussion is frank, optimistic but realistic, self-aware, and often lightly humorous. Kenny’s “resident optimist” persona is balanced by clear-eyed awareness of ongoing challenges—from endemic poverty to environmental threats to US political dysfunction.
Takeaway:
The rise of developing countries is not a threat, but an opportunity, for the West—provided it rethinks its policies in a way that is mutually beneficial, forward-looking, and rooted in both self-interest and common humanity.