Three Billion New Capitalists: The Great Shift of Wealth and Power to the East

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Three Billion New Capitalists: The Great Shift of Wealth and Power to the East

By Clyde V. Prestowitz
Basic Books, 2005
321 pp. $26.95
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In this stark portrait of a coming economic crisis, the veteran trade analyst Prestowitz writes that the postwar era of U.S.-led globalization is giving way to a global economic restructuring headed by China and India. He is alarmed, because those nations are not simply integrating into the Western world economy; they are shaking its already "battered and strained" foundation, playing by different rules and growing quickly. Prestowitz is all the more worried because the United States is not prepared for this momentous shift. One failing is the mismanagement of the U.S. economy, manifest in low household savings, high budget shortfalls, and unsustainable trade deficits and foreign borrowing. But the deeper problem for Prestowitz is that the United States has no national strategy to protect its industry, skilled workers, and technological leadership. Echoing his earlier work, he argues that the United States' laissez-faire economic ideology and confidence in its technological and productive supremacy have prevented Washington from grasping the coming crisis and from developing a programmatic national response. Unfortunately, Prestowitz's actual policy recommendations are a bit skimpy -- as is his exploration of the global implications of the shift in wealth and power to the East.