Business Books: The dark side of the 'flat' Earth Reuters

By Eddie Evans

Thursday May 22 2008  

NEW YORK, May 22 (Reuters) - The war against Islamic militancy is the wrong one, according to German journalist Gabor Steingart. The bigger threat to the West, he argues in his book "The War for Wealth" ($29.95, McGraw-Hill), comes from the rising economic might of Asia.

Steingart, the Washington correspondent for Der Spiegel magazine, is not the first to note that the wealth of the United States and other rich countries is flowing to Asia as jobs move in the same direction.

A measure of that flow is the U.S. trade deficit with China. Since the two countries completed a free-trade agreement in 1999, that gap has grown from $69 billion then to $256 billion last year.

But, according to Steingart, it's not just wealth and prosperity that Asia is building up. China and others are also building political influence and power, with the result that the West will cede global leadership to Asia.

After dominating manufacturing, Asian companies moved on to services, and next they will take over research and development, Steingart writes. It is only a matter of time before Asia starts to build up its military power, too.

And, while Asian workers are getting better jobs, Westerners who lose their jobs to overseas workers usually end up with a worse one, or none at all.

The United States and parts of Europe are already waking up to the consequences of globalization, reacting with a rash of protectionism such as the blocking in 2005 of the attempted purchase of U.S.-based Unocal by Chinese energy company CNOOC.

Steingart suggests a broader counterattack, calling for the United States and Western Europe to join together in a transatlantic economic treaty to offset Asia's growing might.

Author Thomas Friedman popularized the idea of a "flat" Earth in 2005 in his book "The World is Flat," noting that even though people can't easily move from country to country, jobs can.

Steingart's book, which was a bestseller in German, seizes on the dark side of the flat Earth. Subtitled "The True Story of Globalization, or Why the Flat World is Broken," it takes supporters of globalization to task for failing to see what he calls its inevitable consequences.

These supporters say that, overall, freer trade has resulted in more income being earned in the United States and other rich countries than has been lost overseas.

Steingart counters that only three possible scenarios can result, two of them negative for the West: a global economic crash, dominance of the world economy by Asia, or the renaissance of U.S. and European economies. (Reporting by Eddie Evans, editing by Richard Chang) Business

http://www.guardian.co.uk/business/feedarticle/7534735