Sonic Boom: Dramatic Global Economic Growth

WALL STREET JOURNAL -- The big idea behind [Greg Easterbrook's new book] "Sonic Boom: Globalization at Mach Speed" is that globalization—celebrated, reviled and analyzed for at least a decade now—has hardly begun. The world, Mr. Easterbrook believes, is on the verge of a period of pell-mell integration that will dwarf anything before now, and a good thing too: The coming age of global integration, he argues, will produce riches that none of us can imagine and scatter them more widely than ever before.

AMAZON.COM REVIEW -- Probably the international recession is ending--so what comes next? A Sonic Boom is what comes next. Dramatic global economy growth is likely to resume, especially in the developing world, where growth is needed most. Prosperity should start back upward. Goods and service will continue getting better and cheaper. That’s the boom part. But job anxiety and economic insecurity will accelerate, too. Even as the global economy recovers, we may not feel especially good, because economic change will keep coming faster. That’s the sonic part. A sonic boom is powerful, but also nerve-shattering.

History teaches that when some crisis interrupts larger trends, as soon as the crisis concludes, the larger trends resume. Before the international economic crisis that began in late 2007, the larger trends were robust global growth and rising economic insecurity. Look for both trends to resume in a Sonic Boom world.

Many aspects of a Sonic Boom world will be wonderful. Faster, cheaper communication; easy global access to information and knowledge; rapid innovation, including for green energy; increasing freedom, especially women’s freedom; greater awareness of other cultures. Women’s freedom will itself double the world’s supply of ideas! And the more we know about each other, the less nations and cultures will fear each other, meaning militarism should decline.

MP: The top chart above shows actual, annual real GDP growth for the world from 1981 to 2008, and projected real GDP growth from 2009 to 2014, using data from the International Monetary Fund (IMF). Following three years of below-trend growth in 2008 (3%), 2009 (-1.06%) and 2010 (3.10%), above-trend growth is expected for years 2011-2014. Also, the trend line shows that the world economy will add a full percentage point of real economic growth in less than 25 years, going from about 3% in 1990 to 4% by 2014.

The bottom chart above shows world real GDP per capita in 2009 dollars, from 1981 to 2014, using IMF data for world GDP and U.S. Census Bureau data for world population. Following a 2.2% decline in per-capita real GDP in 2009, positive growth is expected to resume in 2010, as the long-term upward trend continues so that by 2014 real per-capita GDP will be almost $10,000, almost double the level of the early 1980s.

Bottom Line: Given a long enough time period for some perspective, the recent financial and economic troubles will probably look rather insignificant in comparison to the long-term positive trends in global output, measured by world real GDP growth rates and real world GDP per-capita. It's been said that "the media constantly dwell on minor problems without celebrating the broader, more upbeat context in which they exist." The trends outlined by Easterbrook and those shown in the graphs above are definitely part of the broader, more upbeat context of an unprecedented period of global wealth creation, increased prosperity, and significant reductions in poverty.