The Post-American World: Release 2.0Ian Bremmer- You made clear from the opening sentence of The Post-American World that you do not believe that America faces some kind of inevitable, irreversible decline. But how can US policymakers ensure that the rise of the rest actually strengthens the United States?Fareed Zakaria - If more countries thrive in the existing global system, it means a larger world economy – more consumers and producers, investors and inventors. That’s great for America. As Europe boomed after World War II, America boomed with it. The rise of Japan and Korea and Taiwan has not meant the decline of America. But the key has been that we have to be able to adjust and adapt. The US economy was enormously productive in the 1950s and 1960s – leading the world in almost every way, from technology to infrastructure to mass education. Our problem is that we no longer lead the world on many of these dimensions – think of infrastructure or K-12 education – and the rest of the world has been hard at work catching up. So, the fault lies not in our competitors but in ourselves. The good news is, if we can rectify these mistakes, we should still do well in the emerging world.Bremmer- Given everything that has happened since 2008—the financial market meltdown, the Eurozone crisis, the Arab Spring—have you become more confident or less that the United States can successfully transition from its previous role as global hegemon to a new role as the most powerful among other powerful countries?Zakaria- There are two distinct (though related) challenges for Washington in a Post-American World. The first is economic, which I outline above. The second is political. Here the structural challenge might seem daunting. Political power is not like economic power. In economics, others can grow and that can be good for you – win, win. In politics, power is relative. As China and India and Brazil and Turkey all prosper and gain strength and confidence, whose dominant influence are they cutting into? The US. But even here, the picture is actually quite hopeful for America. The truth is, only America has power along all dimensions – economic, military, political, cultural. And that gives it great strength, particularly as an agenda-setter. Also, the rise of these other countries creates uncertainty and anxiety in the international system. If the United States plays its cards well, it can be the crucial stabilizing force in the system. You can see that dynamic at work in Asia where China’s rise has unsettled many Asian countries and they look to America to play a stabilizing role. It’s a new diplomatic challenge for America, to be more of a catalyst and broker than hegemon and arbiter. It emphasizes brains more than brawn. Let’s hope we’re up to it.Bremmer- How can policymakers overcome the polarization of American politics to get this right?Zakaria- That’s the Trillion dollar question. America’s economy and society remain dynamic. It’s political system is broken. First, recognize the problem. Stop mouthing slogans about how we have the world’s greatest democracy. Our system is now highly dysfunctional and corrupt. We need to fix it.Bremmer- Among rising states, which do you think have the most staying power and why? Will some of the rest be left behind?Zakaria- China is in a league apart from every other rising power. It has the scale – in terms of sheer numbers—to have a huge global impact. It is also run by a competent elite, technocrats who plan for the long term and are moving China up the value chain. They are making huge investments in education and infrastructure, which will pay off over the long run. I agree with you that China continues to have a long-term political challenge, how to combine a vigorous and open economy with a closed and bureaucratic political system. But so far they have managed to balance it – I think they will need to make much larger political changes in the next decade than they have in the last decade.Bremmer- How well do you think America is responding to China’s continued rise?Zakaria- American business has been responding well to China’s rise, helping it but also benefitting from it. American society is more closed and parochial than American business and so there has been little contact, which is a pity because we can always learn from others. Washington, at a foreign policy level, has actually done quite well in its handling of China. It has encouraged the integration of China into the global economy, it has tried to get China to be more rule-based and more committed to producing (rather than consuming) global public goods. And it has carefully and systematically shored up its alliances with key Asian countries, from India to Japan to South Korea to Australia, which is an important hedge against Chinese expansion. All in all, a solid performance.Bremmer- You devote a chapter to India’s growing prominence. Are you optimistic that India’s government will help spur the country toward the next stage of its economic development? Or is this still a country where progress will come mainly in spite of government?Zakaria- China grows because of its government, and India grows in spite of its government. I don’t expect much improvement in India’s public policy. The infrastructure will continue to lag, the education system will be poor, the government will keep doling out subsidies, and tax and regulatory policy will be uncompetitive. But Indian businesses are world class. They manage under very difficult conditions to perform amazingly well. They manage capital efficiently, understand global markets and brands, and have high quality management. India has good demographics, with lots of young consumers. India’s story is a bottom-up story, rather than China’s top-down story. But don’t kid yourself. Ultimately, you need good government policy to go to the next stage. Unless there is massive and intelligent investment in human and physical capital, India will lag behind China substantially. Whether in India or America, bad government will be a huge limiting factor on a country’s success, no matter how dynamic the society and the economy.