Europe is a mess; many European nations are in recession or face sluggish growth prospects. Across the Atlantic, the U.S. is plagued by high unemployment, modest growth and a trillion dollar deficit.
After 500 years of predominance, the West is facing some huge challenges. At least that's the premise of Harvard professor, Niall Ferguson's latest book,
The good news, according to Ferguson is, "we're not absolutely doomed to decline." The bad news, when things turn south it'll happen in a hurry. "Things don't decline gradually, they tend to fall off a cliff," Ferguson tells The Daily Ticker's Aaron Task and Henry Blodget in the accompanying clip. "We don't have as much time as people assume."
In a nutshell, the West is struggling right now because of a decline in the same ideas that propelled us to dominate the global economy. To borrow a phrase from technology, Ferguson calls these ideas the "Killer Aps."
There are six he highlights in the book: competition, science, property rights, modern science, consumption and work ethic. Unfortunately, Ferguson says while the rest of the world has copied that model, the West has rested on its laurels.
Big declines in competitiveness and work ethic are especially troublesome. "The fact that these new workers from Asia work very hard and have very rapidly rising productivity is the key part," he says. "The average South Korean works nearly a thousand hours more a year than the average German." That does not bode well for Europe and can easily happen in America as well.
He sees proof of this in his classrooms. I fear most teenagers in the West have a certain complacency about the future," notes Ferguson. In the interview he recaps a conversation he recently had with his 17 year old son that captures the thought well. He tells his son, "there are probably about 26 Chinese boys your exact age who are working twice as hard as you to have the lifestyle that you think you're just going to be handed on a plate."
As said earlier, that doesn't mean the West's demise is set in stone. He notes that while China does have a growing middle class and educated class, they still lack basic property rights and self representative government that is also key to the formula. Until, those are granted, China will face its own difficulties.