How the Rise of the Developing World Will Help Americans

In his new book, Philip Auerswald argues the economic crisis will eventually give way to unparalleled global growth.

The Coming Prosperity, Philip Auerswald, a professor at George Mason University's School of Public Policy, brings a message of hope and optimism to the ongoing debate over economic growth and prosperity.

In his new book, 

Where others see the U.S. economy being overtaken by China and falling victim to long-run decline and economic stagnation, Auerswald argues that the world as a whole is on the verge of a new period of unparalleled prosperity. Powerful new technologies, new industries, and new modes of connecting to the global economy, Auerswald says, will spread wealth and well-being from the "advanced" nations to billions more people from China, India, and Brazil to emerging economies across the world. 

Auerswald took some time out to talk with Cities about The Coming Prosperity and what it might mean for American communities.

First off, what in a nutshell are the drivers of the coming prosperity?

There’s one single driver of the coming prosperity, and that’s the productive power of people.

To some extent, this is an old story. Since the Industrial Revolution, waves of innovations have allowed a significant share of the human community to live lives far more rewarding than the “nasty, brutish, and short” norm of centuries past. We’re in that group.

What’s new about right now—our historical moment—is the majority of the world’s population is finally joining this previously elite group. In our lifetimes, billions of people will at last be connecting to the global economy. In so doing, they will derive benefits from centuries of technological and institutional innovation from which they’ve previously been excluded.

This isn’t just a good thing. It’s arguably the best thing that’s happened in human history.

Why specifically do you disagree with economists and others who believe that we are entering an age of prolonged stagnation and decline?

It all comes down to who is “we” and what is “prolonged.”

If we’re talking about the world as a whole over the next quarter century and beyond, the trend really is unambiguous. And, by the way, none of this requires wishing away the very real threats to future prosperity posed by climate change, water scarcity, reduced biodiversity, and other 21st century challenges. If people are the problem, people are also the solution.

If the “we” is people in the United States and the “prolonged” is the next decade, then the “Great Reset” that you first described three years ago in the pages of The Atlantic captures the dynamic more accurately. That reset isn’t easy… and it’s not getting easier anytime soon. So, yes, the next five or ten years in the U.S. may continue to look like stagnation, even decline. But that appearance will only be part of the story.

Fareed Zakaria has also talked about the "rise of the rest," how will the rise of India, China, and Brazil particularly affect the United States and the everyday lives of Americans?

These accounts tend to emphasize first the threat that the “rise of the rest” poses to the United States as dominant economic power, and second the urgency of an American “response.” In my view, for we in the U.S. to look at the “rise of the rest” as a threat is a bit like a farmer living in Woodstock, New York, in 1968 complaining about the noise coming from the music festival down the road. The whole scene must have been a big disruption to business as usual. But what anyone in the vicinity of Woodstock in 1968 really should have wanted to do is join the excitement.*

The same applies here. We are living through the most dynamic and promising era in human history. The action is happening just down the road. We—Americans, Europeans, Japanese, and other winners of the last round of the global birth lottery—should get excited about participating.

Economists like to talk about competition and individual effort, you devote an entire chapter to the notion of "collaborative advantage." How would you explain it?

I’m talking about the challenge of complexity. Here, I fully agree with Tyler Cowen: the easy problems facing society have been solved. We may well have picked the low hanging fruit of technological change. Flush toilets and electric power, for example, were huge innovations. We have not improved on either very dramatically in the past century.

On the other hand, the fact that the majority of the world’s population still does not have access to modern sanitation and reliable electric power is evidence of the challenge of complexity that we’re facing in the 21st century. Billions of people are waiting for the services and amenities of life that the richest sixth of the world takes for granted. But their wait is about to end.

That’s where collaborative advantage comes in. What do you (reader, this time) know about life in a village in Ghana, or Cambodia, or Ecuador? If you’re like me, the answer is: not much. So how are you and I going to be part of this greatest ever opportunity to create value with, and for other people? Well, presumably you bring some distinct talents to the game. We all do. But you’re going to need a partner—and maybe more than one.

Where are we going to find these partners? All around us. Everywhere we look. Because everywhere we look in the United States of the 21st century, we’re going to find people with deep connections to other parts of the world. We’re going to find recent immigrants and their children. We’re going to find globally connected professionals of all types. We’re going to find these people in greater numbers in the United States, as a proportion of the overall population, than in any other part of the world.

These people—the newest Americans, and the most globally connected Americans—possess relational capital of enormous value to the United States in the 21st century. They are the heart of our collaborative advantage.

Our readers are interested in cities, but your book does not address cities or city-regions specifically. Do you have a sense of how you expect the coming prosperity to affect cities, and how do you see cities fitting into your overall theory?

Cities are where the future will be shaped. We don’t solve the challenge of water scarcity without cities. We don’t solve the challenge of climate change without cities. Cities pose some of our greatest puzzles, but they also quite clearly provide many of our greatest answers.

Success in the 21st century isn’t really about finding opportunity, or even creating it. It’s about affiliating with opportunity where it already exists, then discovering ways to connect, create, contribute, and ultimately collaborate. That’s what happens in cities.

*An earlier version of this post included the wrong year for the Woodstock music festival.

Photo credit: JJ Studio/Shutterstock

About the Author

  • Richard Florida is Co-founder and Editor at Large of CityLab.com and Senior Editor at The Atlantic. He is director of the Martin Prosperity Institute at the University of Toronto and Global Research Professor at NYU. More
    Florida is author of The Rise of the Creative ClassWho's Your City?, and The Great Reset. He's also the founder of the Creative Class Group, and a list of his current clients can be found here