In fact, we live in a “G-3” world — one that combines U.S. military power and consumption, Chinese capital and labor, and European rules and technology. The United States, the European Union (E.U.) and China are the three largest actors in the world, together representing approximately 60% of the world economy — with the E.U. being the largest of the three.Khanna and Leonard further maintain that Europe may have more in common with China than does the U.S.:
Europe, not America, is China’s role model for its state welfare systems, social democracy, low inequality, infrastructure, and commitment to sustainability. There are far more Chinese students in Europe than in America, and far more delegations of Chinese technocrats visiting European capitals.The chart does fail to treat the E.U. as a single, and therefore powerful, economic unit. But should Europe be treated as unified, given that European unity is under such stress? Here’s Janet Daley of The Telegraph (U.K.):
we are up against the unavoidable contradiction of the European federal project. . . The imperatives of federalism . . . come bang up against the basic principle of democracy: that elected governments should be answerable to their own electorates. . . Federalism cannot allow democracy to disrupt its objectives, and democracy will not permit federalism to ignore its anger and frustration.If the E.U. hangs together with its euro—not certain—any “G-3” today would certainly include Europe in place of Japan. But the “eclipse” that Arvind Subramanian sees in our future will in any case embrace the rise of India (on the chart by 2030) and Asia, not just China, with the region gaining at the expense of the West including Europe, not just the U.S.
[German Chancellor] Angela Merkel . . . cannot commit herself to endless bail-outs and the under-writing of infinite Mediterranean debt, just as the Greek government cannot deliver the European Union’s austerity measures—because the people of both these countries do not wish it. The irresistible force has met the immovable object[, meaning Europe must choose] between abandoning [democracy], or [abandoning] the euro.