Fareed Zakaria, editor of Newsweek International, and former editor of Foreign Affairs, spoke this evening at Seattle’s Town Hall about his new book The Post-American World.

He spoke for about 35 minutes and then took questions from the audience.  Here’s a summary of his remarks:

The modern world has undergone three major shifts in power.

• First, during the 15th century, the rise of Western Europe, brought about by the Renaissance, the Enlightenment, and the Industrial Revolution. 
• Second, starting at the end of the 19th century, the rise of the United States as the dominant economic, political, military and cultural power in the world.
• Third, what we are now living through, the "rise of the rest."  

The "rise of the rest" has been driven by three great forces:

• The collapse of communism, which among other things, left no viable alternative to the free-market, trade-based economic model.
• The rise of global capital markets, a very recent phenomenon.  We forget that 25 years ago many currencies weren’t even convertible.
• Technological advances especially in computers and communications which have enabled global supply chains. 

The result:  synchronous global growth.  In 2007, 124 countries experienced economic growth rates greater than 4%.   This has important consequences such as more people eating more protein driving commodity prices to a 200 (yes, two hundred) year high. 

It also means the US no longer dominates the way it used to, in ways both great and small.  The world’s richest man is no longer an American.  Today it’s Carlos Slim, a Mexican.  The world’s largest casino is in Macao not Las Vegas.  The world’s largest shopping mall is in Beijing.  The US no longer dominates economically, politically or militarily, either.

Ironically, the rise of the rest is an American success story since it was America that advocated and fought for open markets, free trade, free flows of capital since at least the end of the Second World War.

Problem is, just when the rest of the world is opening up, the US appears to be closing down.  For example, immigration.  Always a source of dynamism and creativity in the US and a key competitive advantage against the rest of the world, today we’re having a hard time attracting and keeping immigrants here.  Zakaria noted, by way of contrast, that immigration is critical to Europe and Japan to counter population trends in those countries.  In five years, he said, Europe looks like Florida demographically.  Japan already does.  These places have never figured out how to properly integrate immigrants into their communities.  What they really want are immigrants who don’t actually come from foreign countries.  The US, and a few other countries like Canada, Australia and the UK, have figured this out, to their great advantage. 

Three priorities for the next president:

• Reposition foreign policy to recognize the strategic power shifts now taking place in the world.  Look at Iraq, Afghanistan, Iran, as part of the larger trend.  Stop obsessing about the "War on Terror"  Yes, there are terrorists who pose a threat, but that threat is not existential for the US and is posed by only a very small extremist minority.  Stop the fear mongering.
• Deal with the problem of energy.  80% of past CO2 emissions were put into the atmosphere by the West, 80% of future CO2 emissions will be put there by India and China.  Cooperation by both groups is going to be required.
• Fix health care.  Americans are risk takers, but they do not wish to take risks with the health of their kids.

Zakaria is fundamentally an optimist.  He believes globalization is a success story because "the rest" are discovering modernity in their own countries and now they have a stake in the proper functioning of the global economy and the international community.  Even though it no longer dominates the way it once did, the US must not succumb to the temptation to withdraw.  To lead the world, he says, the US must be part of it.