US, Not China, to Dominate 21st Century'

US, Not China, to Dominate 21st Century'

Guy Sorman speaks at a forum hosted by the Institution of Global Economics in Seoul, Thursday.
By Yoon Ja-young
Staff Reporter


The United States will continue to dominate the world, and China is not as threatening as it seems, said Guy Sorman, a world-famous intellectual.

``The U.S. economy has been the leading economy for more than one century now,'' the French writer and columnist said at a forum titled ``Why the U.S. Will Continue to Lead the 21st Century,'' organized by the Institution for Global Economics in downtown Seoul, Thursday.

Sorman has written many books that preach the ideals of creativity and modern capitalism. Among his latest books are ``Made in USA'' and ``The Empire of Lies.''

He compared the U.S. economy with that of Europe and pointed out why it will continue to dominate.

He defined the U.S. as the land of ``destructive creation.'' ``When the company doesn't work or isn't profitable anymore, it is destroyed and restructured,'' Sorman said. The spontaneous reaction in Europe, on the contrary, would be to protect the company, according to the French intellectual.

``It is easy to get into business, but also easy to go out of business. The bankruptcy law is the key element of flexibility of the U.S. economy, and is a major instrument of the economic dynamism.''

Sorman also cited the strong division between politics and economy as a major strength of the United States. ``There is no economic minister in United States, because the government doesn't consider they should intervene in the free market, and also because the economic minister wouldn't have any instrument to influence the economy.''

He added that low taxation expanded the competitive edge of the United States, while Europe is spending more for welfare systems.

He said China is not a competitor for either Europe or for the United States. ``China, which was an extremely poor country, has a high growth rate, but this is not extraordinary. The only new aspect is size.''

He said China's low labor cost has restrained inflation in the West. ``China is not a threat but an incentive for growths,'' he said, adding that China is a very unpredictable country. ``Institution is not there.'' He said the system was chosen by leaders, without approval from people.

Regarding labor market, Sorman said immigration, both legal and illegal, is giving an infinite supply of labor to the United States, keeping wages lower than in Europe. ``Thus businesses not so modern or high-tech are also doing well in the United States. Textiles and electronics, for example, have choices between producing in the United States or resorting to abroad.'' He also pointed out that there are very few strikes there as the labor market is very flexible.

The French writer said the increasing price of oil has no impact on the U.S. economy as it has many possibilities for substitution, and as its new facilities are becoming less energy dependent.

He also pointed out that there seems to be no currency to substitute dollars for now. ``It is a huge privilege. Entrepreneurs can borrow money easily.''

Relative tolerance on monopolies, as seen in the case of Microsoft, and the quality of higher education are other major characteristics of the United States, according to the writer. ``You cannot understand the dynamism of the United States without understanding that this country is producing ideas.''

chizpizza@koreatimes.co.kr