The year 2020 marked parity between the total Gross Domestic Product (GDP) of the G7 nations — the U.S., Canada, France, Germany, Italy, Japan, the United Kingdom, and the European Union — and the total GDP of the BRICS bloc of developing economies, whoes members are Brazil, Russia, India, China and South Africa.
However, three years later, according to Richard Wolff, professor of economics emeritus, at the University of Massachusetts, Amherst and currently a visiting professor at the New School University in New York, the BRICS economies grew faster than the G7 economies. Now, one-third of total world output comes from the BRICS countries, while the G7 accounts for below 30 percent. This shift represents a major change in the global economy that will inevitably bring about major political, cultural and economic consequences.
Following the BRICS summit meeting in Johannesburg, South Africa in late August, it was announced that six new member states were invited to join the economic bloc, which includes Saudi Arabia, Iran, the UAE, Argentina, Egypt and Ethiopia. The expanded BRICS group will now represent more than half of the world’s population and account for 43 percent of global oil production. Between The Lines’ Scott Harris spoke with Wolff, author of 11 books including, “Democracy at Work: A Cure for Capitalism,” and host of the weekly syndicated radio program Economic Update. Here he discusses the issues covered in his recent article, “The World Economy is Changing: The People Know, But Their Leaders Don’t.”
RICHARD D. WOLFF: Over the last three years, the total output produced by the BRICS nations led by China has risen to be about 33 percent of the world’s output. Those five countries produce one-third of the total output of the goods and services on this planet. Whereas the United States and its allies, the G7 fell from 30 to around 29 percent. In other words, the United States has now been surpassed in terms of its importance in the world economy by China and its allies. And this kind of a change is historically momentous because it signals, it measures, it is the mark of a change in the world economy in which the United States is no longer, and for the first time in almost a century, it is no longer the top dog, economically speaking.
It may still have the biggest military, but it is not the dominant economic power. And as most people know from economic power and size flows political, cultural and other kinds of influence.
And the irony is — and it’s a very tragic irony — that American politicians are so desperately focused on raising money from the rich people and getting votes from the general public that they have taken in recent decades to constantly saying things like “The United States is the most powerful economy in the world.” It isn’t. “The United States dominates the world economically.” It doesn’t. These things are not true anymore.
But the American people are kind of living through an exercise in denial, in not facing what this is and what it means. Not asking the obvious questions. How did this come about? Where is this difference going? How will this change affect my life, my job, my children’s future? These are the most important questions you can ask in economics. But we live in a country which is pretending to itself that it is not in this situation. It actually is.
And that’s one of the reasons, just to give you one example, why we are being surprised that most of the rest of the world is not taking sides in the war between Russia and Ukraine. The war that is really between Russia and the United States and its allies in economic terms, because the people in the rest of the world, in most of the countries in Asia, Africa, and Latin America have a greater economic interest in getting along with the BRICS nations, which include China and Russia than they have an interest in getting along with the United States and its allies. And to be safe, they’re not picking sides.
And if you are concerned about this, then my first urging is that you become aware of these economic changes and stop participating in the kind of denial that leads people to make very bad political, economic, cultural and military decisions. And you know, the historical message: Every other empire, the Roman, the Greek, the British, the Persian, the Turkish. They were born, they evolved over time and then they passed away.
The United States has been the global empire leader for a hundred years. It was born, it evolved over that time. It has now peaked and it is on a period of decline. And that’s a much harder experience for a people than the ride up was for most of the 20th century. But pretending it isn’t happening solves nothing.
Listen to Scott Harris’ in-depth interview with Richard D. Wolff (20:30) and see more articles and opinion pieces in the Related Links section of this page.
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