We call it globalisation and it is one of the two great economic stories of our time: that shift of economic power from the old developed world to the new emerging one. The other story is the nasty economic cycle we have just experienced. The two stories are linked because the failures of Western economic management that exacerbated the last recession have sped up the power shift.
There are, unsurprisingly, two very different takes on globalisation and two books by prominent bank economists exemplify these different responses.
In When the Money Runs Out, Stephen D King, group chief economist for HSBC (and until recently a columnist for this paper), charts the failures of Western economic policy over the past decade. He shows how we assumed the good times would continue for ever, and how policy-makers made matters worse. He notes how their failure has led to a collapse of trust not only in financial services, but in economic policy. Politicians in the West have promised services they cannot deliver. King argues that unless we learn from the past, the West is doomed to a long period of very low growth and rising mistrust. Globalisation goes into reverse.
The positive side of the story comes from Jim O'Neill who, when chief economist for Goldman Sachs, coined the acronym BRICs to describe Brazil, Russia, India and China. It is the measure of the power of an idea whose time has come that there is now even a BRIC summit. O'Neill's book The Growth Map, just out in paperback, sets out how the West can benefit from this historic shift in economic power.
Both books are beautifully written; both in their own terms quite valid. King's subtitle is "the end of Western affluence"; O'Neill's, "economic opportunity in the BRICs and beyond". It comes down to whether you prefer to see the bottle half full or half empty. If you are interested in this great story, read both.