20:21 Vision: the lessons of the 20th century for the 21st by Bill Emmott

Don't worry too much about the prospect of a future shaped by US-led market capitalism, advises Hamish McRae: the alternatives might be worse

This is the right time to be publishing a book about the future written by a rational optimist. Whatever our own take on the Middle East, terrorism, asylum-seekers, inequality – all the social and economic concerns of any sentient human being – it is good to have this "now" set in its historical perspective. We need to be reminded that the world is not only richer than ever before, but also better educated and better informed. We need, too, to be reminded how, for much of the past century, large swathes of the world lived under the scourge of Communism – and many millions died as a direct result of its policies.

Bill Emmott is editor of The Economist, and therefore in an ideal position to take this long view. His structure is to take the history of the last century to see what can sensibly be said about the future of this. His argument is that only two questions for this century really matter. "Will America continue to lead the world and keep the peace? Will capitalism's strengths outweigh its weaknesses sufficiently to encourage people and their governments to keep faith with it, through thin times as well as thick?"

Emmott answers these by writing what is, in effect, two books. One is about American power, and he has a clear answer to that: Yes. The other is about what is known about the process of wealth creation – why, in particular, some parts of the world made the leap from developing-country levels of wealth to developed in one generation, and why others failed to advance at all. On that, his answer is less certain.

On American power, his view is that there will be no serious challenge for a generation at least, probably much longer. Europe is not only too disorganised; it has no real ambition to challenge the US as a superpower. China might, but not for many years, if only because its economy remains puny beside that of the US. Were it to try to challenge the US, this might become the most dangerous moment of this century.

The other two candidates look even less likely challengers. Japan will remain on the sidelines of world power, even if it does become somewhat more militaristic, which it may. And international terrorism, even if equipped with weapons of mass destruction? Emmott believes "terrorism can be contained, even if it cannot be entirely quelled".

This view of the US as the benign policeman, the powerful force for good, making the world safe for the rest of us, will jar on some people. Emmott's argument is that it has been America's willingness to operate through multilateral organisations, such as the UN or IMF, and its lack of direct territorial ambitions, that distinguishes it from other empires.

It dominates the world in a way no other country has done in the history of humankind, with the possible exception of Rome. Yet the US still seeks to operate alongside its allies and through the mandate of the UN.

In Emmott's eyes, this dominance is almost completely benign. The issue for him is not whether the world benefits from the Pax Americana; rather, it is whether the US can succeed in imposing order on the world and whether it will be prepared to continue in this role.

This is not the fashionable view on the Left Bank of the Seine – or, of course, the West Bank of the Jordan. Even those of us who do fundamentally agree with his perception of the US as a force for good feel uncomfortable about many of its actions.

But the challenge for those who attack this welcoming of US dominance is to state what they would prefer. A bi-polar world with power shared with a touchy and often brutal China? An EU left both to defend itself and to police unstable regions near its borders? Emmott approvingly quotes Winston Churchill: "The Americans will always do the right thing – after they've exhausted all the alternatives."

His views on the nature of wealth creation are less sharp. Yes, he defends market capitalism against claims that it is unpopular, unstable, unequal and unclean. He argues that better regulation should cope with many causes of its present unpopularity. He also argues that we learned enough from the catastrophe of the Depression of the Thirties to avoid any repeat performance.

On inequality, he points out that in general, economic inequalities narrowed within countries during the past century, but widened between them. The solution to the first is improvement in public education – we are in an economy that demands highly skilled workers – coupled with an effort to ensure that those who fall by the wayside are looked after by those who succeed. We know what to do.

The solution to inequality between different parts of the world is harder to tackle. Emmott believes that the lessons from poorer countries that have made the leap to developed status show that policies to encourage greater economic freedom will lead to greater prosperity. How you generate good economic governance is another matter.

Finally, on the environment, Emmott is more self-confident. Problems, by and large, are not the fault of capitalism; they are the fault of government. He is generally on the side of Bjørn Lomborg, author of The Skeptical Environmentalist, who argued that most problems have been exaggerated by the Green lobby, though we should be sensitive to the problems of climate change.

On this second theme, more readers will want to be satisfied. Whatever doubts people might have about American power, most would like the world to become richer, and inequalities narrow, if that were possible in a sustainable manner. But it is a more complex question and even The Economist's legendary self-assurance seems to desert its editor.

Hamish McRae is chief economics commentator of 'The Independent'