The world now needs to agree on a financial and economic strategy for prosperity far bolder than the Marshall Plan of the 1940s, writes Gordon Brown, former prime minister of the United Kingdom.
The following contribution was authored by Gordon Brown, former prime minister of the United Kingdom.
"In 2008, at a time of financial peril, the world united to restructure the global banking system.
In 2009, as trade collapsed and unemployment rose dramatically, the world came together for the first time in the G20 to prevent a great recession from spiraling into a great depression.
Now, facing a low-growth austerity decade with no national exits from long-term unemployment and diminished living standards, the world needs to come together in the first half of 2011 to agree on a financial and economic strategy for prosperity far bolder than the Marshall Plan of the 1940s.
Time is running out on the West, because both Europe and America have yet to digest the fact that all the individual crises of the last few years – from the sub-prime crisis and the collapse of Lehman Brothers to Greek austerity and Ireland's near-bankruptcy – are symptoms of a deeper problem: a world undergoing a far-reaching, irreversible, and, indeed, unprecedented restructuring of economic power.
Of course, we all know of Asia's rise, and that China exports more than America and will soon manufacture and invest more as well. But we have not fully come to terms with the sweep of history.
Western economic dominance– 10% of the world's population producing a majority of the world's exports and investment – is finished, never to return. After two centuries in which Europe and America monopolised global economic activity, the West is now being out-produced, out-manufactured, out-traded and out-invested by the rest of the world.
Otto von Bismarck once described the patterns of world history. Transformations do not happen with 'the even speed of a railway train,' he said. Once in motion they occur 'with irresistible force'. If the West fails to understand that the real issue today is responding to the rise of Asian economic power by renewing its own, then it faces the grim prospect of steady decline, punctuated by brief moments of recovery – until the next financial crisis. Throughout it all, millions will be without jobs."
To read the op-ed in full, please click here.
(Published in partnership with Project Syndicate.)