The Post-American World - Fareed Zakaria [95]
Everyone Is Playing the Game
Let me begin with an analogy drawn from my favorite sport, tennis. American tennis enthusiasts have noted a worrying recent trend: the decline of America in championship tennis. The New York Times’ Aron Pilhofer ran the numbers. Thirty years ago, Americans made up half the draw (the 128 players selected to play) in the U.S. Open. In 1982, for example, 78 of the 128 players selected were Americans. In 2007, only 20 Americans made the draw, a figure that accurately reflects the downward trend over twenty-five years. Millions of pixels have been devoted to wondering how America could have slipped so far and fast. The answer lies in another set of numbers. In the 1970s, about twenty-five countries sent players to the U.S. Open. Today, about thirty-five countries do, a 40 percent increase. Countries like Russia, South Korea, Serbia, and Austria are now churning out world-class players, and Germany, France, and Spain are training many more players than ever before. In the 1970s, three Anglo-Saxon nations—America, Britain, and Australia—utterly dominated tennis. In 2007, the final-sixteen players came from ten different countries. In other words, it’s not that the United States has been doing badly over the last two decades. It’s that, all of a sudden, everyone is playing the game.
If tennis seems trivial, consider a higher-stakes game. In 2005, New York City got a wake-up call. Twenty-four of the world’s twenty-five largest initial public offerings (IPOs) that year were held in countries other than the United States. This was stunning. America’s capital markets have long been the biggest, deepest, and most liquid in the world. They financed the turnaround in manufacturing in the 1980s, the technology revolution of the 1990s, and the ongoing advances in bioscience. It was the fluidity of these markets that had kept American business nimble. If America was losing this distinctive advantage, it was very bad news. The worry was great enough that Mayor Michael Bloomberg and Senator Chuck Schumer of New York commissioned McKinsey and Company to do a report assessing the state of New York’s financial competitiveness. It was released late in 2006.20
Much of the discussion around the problem focused on America’s overregulation, particularly with post-Enron laws like Sarbanes-Oxley, and the constant threat of litigation that hovers over business in the United States. These findings were true enough, but they did not really get at what had shifted business abroad. America was conducting business as usual. But others were joining in the game. Sarbanes-Oxley and other such regulatory measures would not have had nearly the impact they did had it not been for the fact that there are now alternatives. What’s really happening here, as in other areas, is simple: the rise of the rest. America’s sum total of stocks, bonds, deposits, loans, and other instruments—its financial stock, in other words—still exceeds that of any other region, but other regions are seeing their financial stock grow much more quickly. This is especially true of the rising countries of Asia—at 15.5 percent annually between 2001 and 2005—but even the Eurozone’s is outpacing America’s, which clips along at 6.5 percent. Europe’s total banking and trading revenues, $98 billion in 2005, have nearly pulled equal to U.S. revenues of $109 billion. In 2001, 57 percent of high-value IPOs occurred on American stock exchanges; in 2005, just 16 percent did. In 2006, the United States