Reading Fareed

15 September 2009, 1410 EDT

Recently, I’ve been reading and mostly enjoying Fareed Zakaria’s The Post-American World. It is a remarkable book, offering sweeping analysis of all sorts of global trends. Not just anyone could have tackled this project and it is definitely to Zakaria’s credit that he has put together a well-written and interesting book about an important topic — the apparent long-term relative decline of the U.S. and the rise of the “rest” of the world (especially China and India). “The great shift taking place in the world might prove to be less about culture and more about power” (p. 86; author’s emphasis).

I’ve been considering the book’s adoption in my spring 2009 master’s level seminar on international relations. Zakaria’s book has deservedly received a great deal of praise and he’s appeared in all sorts of media to promote it. Plus, it was famously carried around by Barack Obama in May 2008.

In fact, because the book is so well-known, I’m not going to offer a proper review here. Instead, I will list a few book notes — examining a few claims in the text that grabbed my attention as I was reading. For instance, on p. 202 Zakaria notes that “Americans are borrowing 80 percent of the world’s surplus savings and using it for consumption.” Shame on us, I thought — especially given more pressing global needs.

Usually, I wrote something in the margin to mark these insights — often a question mark, but sometimes an exclamation point. On occasion, I think Zakaria follows the conventional wisdom too closely. At other times, he can be a bit sloppy. Most of the time, however, Zakaria is level-headed and offers smart analysis.

In any case, my first question mark is on p. 28 of the paperback edition, as Zakaria notes (and emphasizes) that

“In recent years…[oil] prices have risen because of demand from China, India, and other emerging markets, as well as the continuing, massive demand in the developed world.”

However, journalist Matt Taibbi says this simple market explanation of recent oil price increases is false. Oil was not in short supply and demand was not behind the surge in prices:

the short term flow [of oil] has actually been increasing. In the six months before prices spiked, according to the U.S. Energy Information Administration, the world oil supply rose from 85.24 million barrels a day to 85.72 million. Over the same period, world oil demand dropped from 86.82 million barrels a day to 86.07 million. Not only was the short term supply of oil rising, the demand for it was falling — which, in classic economic terms, should have brought prices at the pump down.

So what caused the huge spike in oil prices? …the root cause had almost everything to do with the behavior of a few powerful actors determined to turn the once solid market into a speculative casino. Goldman [Sachs] did it by persuading pension funds and other large institutional investors to invest in oil futures — agreeing to buy oil at a certain price on a fixed date. The push transformed oil from a physical commodity, rigidly subject to supply and demand, into something to bet on, like a stock. Between 2003 and 2008, the amount of speculative money in commodities grew from $13 billion to $317 billion, an increase of 2,300 percent. By 2008, a barrel of oil was traded 27 times, on average, before it was actually delivered and consumed.

Elsewhere, Zakaria relies on other economic data provided by Goldman Sachs.

I think my first explanation point was placed on p. 39, as Zakaria seems to share a critical-constructivist view of political authority:

“Today, no solution, no matter how sensible, is sustainable if it is seen as illegitimate. Imposing it will not work if it is seen as the product of one country’s power and preferences, no matter how powerful that country.”

Perhaps this will become the convention wisdom in post-neocon Washington?

Zakaria sometimes has a knack for explanation that minimizes the kind of hyperbole often used to sell books. Just after describing the past and predicted successes of India (“over the past fifteen years…the second-fastest-growing country in the world”), the author tempers this by noting that “it also has three Nigerias within it — that is, more than 300 million people living on less than a dollar a day” (pp. 131, 133). Later, he notes that 800 million Indians earn less than $2 per day (142).

However, on other occasions, Zakaria could have offered a bit more explanation to assure greater accuracy. Why did he quote unnamed Indian oficials who assert that the country has “a perfect record of nonproliferation” (160)? India has made valid points accusing others of hypocrisy, and may well have a perfectly consistent record on that score, but failure to join the NPT is a pretty strong strike against this claim.

Despite the nits I have picked, Zakaria’s The Post-American World is worth your time and could provoke a great deal of discussion in an IR seminar for advanced undergraduates and master’s students. It is likely not sufficiently theoretical (nor rigorously empirical) to be considered for adoption in a class for doctoral students.