The Realities of the G-20

For a long time we've heard that it is somehow immoral that the US consumes a large portion of the World's product. We hear that the US is a small part of total population while we consume an "inordinate" percentage of the world's goods and output. Some of those critics have taken the next logical step that the right solution to this "problem" is to have us consume less. But from my perspective, that has always been an unsatisfying answer.

The G-20 which began its meetings today, which includes the economies of Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States is a reflection of an alternative way to think about the world. It grew out of the G-7 who were for a long time referred to as the most developed nations of the world. But as NPR suggested this morning the G-20 will now represent about half of the world's GDP. That is a big change from even a decade ago.

The upper chart is how many think of this issue - or they array the population of the world with per capita incomes. Somehow many observers think that the BLUE countries are somehow taking from the other countries that are not blue. They see life and the world economy in a zero sum vision - if one country advances others will not. The better way to look at it is in the lower chart, which shows over time that some nations consumed different shares of the world economy. Ultimately we should be thinking about shrinking the US share by growing the other shares.