Economic power shift from Western to Eastern hemisphere

West to East

Current Global Economic Trends and Their Lasting Effects: The Value Shift to the Eastern Hemisphere

Since the beginning of the Modern Age, when global commerce first became a reality, the Western Hemisphere has had a much greater share of the world's wealth and value capacity than the eastern half of the world. This was centered in Europe, at first, and could arguably said to persist even as far back as the Ancient Greeks and Egyptians, who were able -- along with successive nations and cultures living around the Mediterranean -- had many disparate trading partners with vastly different goods. The Mediterranean, however, actually served to connect the Eastern and Western worlds, and trade was still limited to those civilizations that actually bordered this interconnecting sea. It was Europe's spread into the New Worlds of what are now North and South America that led to Western domination of the global economy, and in many ways that marked the beginning of the economic Modern Age.

Though this presents an oversimplified view of a complex global history, the continued effects of Europe's spread throughout the Western Hemisphere can be easily seen today. The most Europeanized countries -- the United States, Canada, and even South Africa serve as examples -- are among the wealthiest along with many European countries, as these have had consistent and strong patterns of fairly balanced trade between them for centuries. Now, however, the economic tides are shifting, and one must question what the effects of this shift will be.

Growth is now occurring at a much faster rate in the Eastern half of the world than it is in the Western, both due to large trade imbalances with Western trading partners (notably the United States) and a rapid growth in the amount of trade occurring between countries in the Eastern Hemisphere (Hoge 2004; McRae 2008; McWarner 2009; Chaddha 2010). The long-term implications of thus shift are difficult to predict with any real specificity or certainty, but some trends and trajectories see quite clear. By reflecting on the history of the Western world's economic dominance and examining the reasons behind the economic shift to the East that is occurring right now, it seems likely that several nations in the Eastern half of the world will eventually emerge as the new superpowers, with Western countries as dependent on the East as the East has been of the West, and with many other countries in both hemispheres remaining largely impoverished and struggling to catch up with the developed world.

Current Trends

These things are all starting to happen now, as a matter of fact, and sometimes in not-too-subtle ways. The United States, which is exemplary of the Western world because it is, as of now (or relatively recently) the only real superpower and the country most thoroughly Westernized in terms of losing its manufacturing industry, is wholly dependent on many Asian countries for the provision of raw materials and finished goods, and on Middle Eastern countries for fossil fuels. There is a massive trade imbalance, with the United States (and certain other Western countries) importing far more than they export (Bloomberg 2005).

This imbalance leads to the rather dangerous phenomena of economic "coupling," where countries becomes do dependent on trade from another specific source that a disturbance in that source causes a rippling effect on the "coupled" countries (Schlesinger 2009). Thus, the tumble that the United States economy took several years ago was able to trigger a major hiccup in economies of its major trading partners, as it suddenly became less feasible for the United States to import as many goods as in previous years (McReae 2008; Schlesinger 2009). In addition, the United States is "coupled" to Eastern countries that provide an increasing proportion of consumer goods and certain services via telecommunications (Schlesinger 2009). Though the United States is in less relative danger from the failure in a single economy as it has multiple trading partners, this might not be the case in the long-term.

The negative effects of globalization that have left many countries impoverished and stripped of their natural resources, the destruction of many indigenous ways of life, and/or subjected to ongoing civil wars and infighting can definitely be seen happening now, and it is likely that these trends will continue into the new economic era, as well. Though the Eastern world's economy is picking up as a whole, there are several countries -- most notably India and China -- that are far outstripping their immediate neighbors (Bloomberg 2005). The Eastern Hemisphere is not advancing evenly, that is, just as the Western Hemisphere did not over the past several centuries. Instead, the dominant powers in the Western Hemisphere essentially forced their neighbors into economic partnerships.

This is most likely what will occur in the Eastern Hemisphere as well, and there is already some evidence that this is occurring. Though trade is occurring in large and ever-increasing amounts between many Asian countries, a majority of the goods in this trade are moving in one direction -- out of major powerhouses like China and India -- while cash is moving in the opposite direction (Hoge 2004; Bloomberg 2005; Chaddha 2010). For now, the more developed countries in the Eastern world still have fairly abundant natural resources as they have not been tapped to the same degree as the Western world's; eventually, increased production will start to make these resources scarce and there is little doubt that the powerful nations will look to the weaker nations as resource wells, again repeating the pattern that unfolded in the Western world. This promises to increase the problems of globalization.

Conclusion

The major difference between the economic shift from the West to the East that is occurring now and the rapid ascendance and growing cohesion of Western economic power over the last several centuries is the lack of any new an unexplored (and unexploited) territory. For Eastern economies to find this, they would have to turn to that final frontier -- space. It is unlikely that any global power will be able to utilize resources from orbiting asteroids and other planets any time soon, of course, but who knows -- perhaps this is where the truly long-term future of certain countries lies.