THE CONSEQUENCES OF DIFFERING ECONOMIC CULTURES

Why do divergences of economic outcomes matter? They matter in three distinct areas: capabilities, exploitable grievances, and governance. Relatively affluent nations can afford stronger militaries, and have greater economic clout. Relatively poor and vulnerable states can be drawn to weapons of mass destruction, and provide fertile ground for terrorism. And authoritarian societies on the rise often are predisposed to excessive coercion because they are either intoxicated with power, or use compulsion to compensate for their inefficiency. Liberal economic theory teaches that widening inequality shouldn't cause discord because rich and poor alike can benefit from democratic free enterprise. However, divergence creates inflammatory grievances, providing incentives to alter the rules of games, played out through the fog of partisan public cultural engagement.

There are too many imponderable forces at work to precisely forecast when, where and how divergence will generate this or that conflict. However, as we said in Chapter 2, we see four coming threats to American security that are a product of these divergences. These threats are ones we can foresee and it is imperative for an American president to make the effort to see the economic component of driving each of these threats. We recognize that differing economic cultures mean considerably different economic experiences among America, Europe, Japan, China, and Russia and the rest of the world. We also include Japan here due its strong economy, military potential, and its historic animosity with China.

America and Europe are representative of the West.