Warren Cohen on the American diplomacy and East Asia - H-Diplo

 Depoimento de um grande historiador das relações internacionais e da política externa americana:

H-Diplo Essay 383- Warren I. Cohen on Learning the Scholar's Craft

H-Diplo Essay 383- Warren I. Cohen on Learning the Scholar's Craft

by George Fujii

H-Diplo Essay 383

Essay Series on Learning the Scholar’s Craft: Reflections of Historians and International Relations Scholars 
2 November 2021

Learning the Scholar’s Craft: Twists and Turns in the Life of a Very Lucky Man

https://hdiplo.org/to/E383
Series Editor: Diane Labrosse | Production Editor: George Fujii

Essay by Warren I. Cohen, University Distinguished Professor Emeritus, University of Maryland, Baltimore County and Michigan State University

Columbia College did not require a major when I was an undergraduate.  I didn’t take my first history course until my junior year, although I had worked earlier with Peter Gay, the great scholar of modern Europe intellectual history, when he was an assistant professor in the Government Department teaching Contemporary Civilization in Columbia’s core curriculum—lots of Freud.  I enjoyed the survey of American history and enrolled in a wonderful colloquium in American history my senior year—8 students, 3 professors, weekly essays.

As I approached graduation, I was unsure of what to do.  I had started pre-med, planning to become a psychiatrist, but my freshman chemistry class met Tuesday, Thursday, and Saturday at 8 in the morning and my lab was scheduled for 9-1 Saturday.  These times proved inconsistent with my social life to which I gave priority.  I considered going to law school and in my senior year applied to Yale.  My friends at Harvard and Columbia law schools were suffering and Yale seemed more humane.  I also applied to the graduate history program at Columbia and to the Fletcher School of Law and Diplomacy, which I did on a dare, having been told I had no chance of being admitted.  Yale put me on the waiting list.  I was outraged and withdrew.  They had admitted my cousin two years earlier and the Columbia faculty we shared thought I was the sharper of the two.  I was accepted by both Columbia and the Fletcher School.  Harry Carman, then the much beloved Dean Emeritus of Columbia College, said: “Cohen, you’ve lived all your life in New York, go to Boston.”  So I did.

Having applied to the Fletcher School, in the second semester of my senior year I enrolled in a beginning class in international relations taught by a young assistant professor, Ken Waltz.  Neither of us was particularly impressed by the other.  Forty or so years later, when he was generally acknowledged to be the leader in the field, we spent a few days together at a conference in Kuala Lumpur and delighted in memories of the course and of his first and my last year at Columbia.

At the Fletcher School, where I studied American diplomatic history, I developed close friendships with two Japanese students: Shijuro Ogata, who later became #2 in the Bank of Japan, and Chusei Yamada, who served as Japan’s ambassador to India and Egypt.  I became very interested in Japan—the food and the history.  After graduation, I enlisted in the navy and chose to serve as a line officer in the Pacific Fleet, hoping in vain to be deployed to Japan.  I enjoyed shipboard life (I was qualified to run a destroyer escort before I had a driver’s license) and toyed with staying in the navy, but I’d married along the way and we had a son.  Unable to perceive of how I could be a father when I was always somewhere in the Pacific, I decided to study for a Ph.D. in Japanese history.

At the time the leading scholar in Japanese history was Marius Jansen, who taught at the University of Washington.  My wife was eager to stay in the northwest and so I applied and was accepted in the UW Ph.D. program in history.  Unfortunately, when I arrived in Seattle, Marius had left for Princeton and there was no one there to replace him. 

Unable to study Japanese history.  I decided to start with American diplomatic history under the direction of W. Stull Holt—about whom I’d heard good things from a friend who’d taken a summer school class with him at Harvard.  Stull, who had been a fighter pilot in World War One, was outraged when he was not allowed to fly when he reenlisted in December 1941 (he served out the war as a colonel in intelligence with dozens of other historians).  His hostility towards the Japanese was at least equal to his hostility towards the Nazis.  He insisted that I study the Chinese language instead, claiming mistakenly that Japanese would then be easy.  And that was how I ended up focusing on Chinese-American relations.

Initially, the subject of my dissertation was going to be American perceptions of the Chinese Communists during World War II. I wanted to address the question of when the US Government realized the Chinese Communist Party (CCP) was likely to take control of China after the war.  Unable to get a fellowship to allow me to work in the State and Defense Department archives in Washington, I wrote instead about a group of historians and journalists known as “revisionists,” who, in the interwar period, had argued it was a mistake for the U.S. to have intervened in the First World War.  I had become interested in them because Ruhl Bartlett, a leading diplomatic historian with whom I did not get along at Fletcher, despised them.  I could do the research for this subject without ever leaving the UW library.  It was a little tricky because Stull had no use for them either.  The dissertation became my first book: The American Revisionists and the Lessons of Intervention in World War I.^[1]

My Chinese language proficiency (never great) declined in the year in which I wrote my dissertation and the year I taught at UC Riverside, but I had a stroke of luck shortly after I joined the faculty at Michigan State in 1963.  MSU had played a major role in the U.S. Agency for International Development (USAID) program on Taiwan that ended in 1964.  The presidents of MSU and National Taiwan University (NTU) wanted to maintain a relationship and decided on a faculty exchange.  NTU wanted someone in American history and no one else on campus had any interest in spending a year on Taiwan, so off we went—for what proved to be two wonderful years in which my wife and two young children learned to speak Chinese and my language skills improved.  I gained access to the archives of the Bureau of Investigation, where all the documents that Kuomintang intelligence had collected from the Chinese Communists were filed.  MSU asked me to stay a second year, and paid for me to spend the summer between academic years in Hong Kong at the Chinese Research Center, which had the finest collection of post 1949 Chinese Communist documents and publications.  There I became friends with Dick Solomon and Mike Oksenberg, who later served as China policy advisers to national security advisors Henry Kissinger and Zbigniew Brzezinski respectively.  I subsequently wrote the first two articles on the development of CCP policy toward the United States since the creation of the Party.^[2] Unbeknownst to me at the time, publication of my articles was funded by the CIA.

Two years after I returned from Taiwan, an American Council of Learned Societies (ACLS) grant allowed me to spend the summer in Washington, D.C., where I read in the State Department archives, gaining much of the information that helped round out what I had found in Taiwan and became the basis of my second book, America’s Response to China (now in its 6^th ed.) ^[3]  The book was published originally by John Wiley & Sons in a series edited by Bob Divine. The Wiley agent at UCR urged me to write it and offered an advance that was irresistible to me and my hungry family.  In the archives, I also came across material that contributed to my third, fourth, and fifth books.^[4]

It was in 1967 that I met Dorothy Borg, then at Columbia, who was probably the single most influential person in my career.  Dorothy was determined to create a new field, American-East Asian Relations, equivalent to American or Asian history.  Bob Scalapino, the leading Asianist at UC-Berkeley, had once explained to me that I had not been awarded a Ford Foundation research fellowship because I was neither an Americanist nor an Asianist.  Dorothy was determined to change that.  Scholars working in the field would be expected to master the language and culture of at least one Asian country as well as of the United States.  John Fairbank, then the country’s leading China scholar, and Ernest May of Harvard both supported her in this effort.  Indeed, John spoke of the need for such scholars in his American Historical Association (AHA) Presidential Address in 1967.  Dorothy oversaw the creation of an AHA Committee on American East Asian Relations—a committee that moved to the Society for Historians of American Foreign Relations (SHAFR) when AHA politics interfered with selections of its membership.  May was the initial chair of the committee, but it was Akira Iriye, who became a close friend, who was the driving force.  He chaired it after Ernest—and I chaired it after Iriye.  In 1971 I ran an AHA program on American-East Asian relations at Columbia.  In 1984, I entitled my SHAFR Presidential address “American-East Asian Relations: Cutting Edge of the Historical Profession.”

In 1969, Borg organized the first Japanese-American conference on Japanese-American relations 1931-1941, the papers for which became the prize-winning book, Pearl Harbor as History.^[5] She asked me to present an essay on the influence of private groups such as the National Council for the Prevention of War, the American Committee for Non-Participation in Japanese Aggression, and the Committee to Defend America by Aiding the Allies, on American policy.  The counterpart Japanese essay was written by Sadako Ogata, wife of my Fletcher School friend (and later Japan’s ambassador to the UN and UN High Commissioner for Refugees).  Eager to impress Borg, I probably did more research for that article than any other I’ve written.^[6] Out of that research came the ideas for two subsequent books, the poorly named Chinese Connection—a title forced on me by my publisher despite the fact that much of the book was about relations with Japan (my original title was “China, Japan and the Three Wise Men”—May thought it would end up shelved with books on religion. My research indicated the importance of the peace movement and led in part to my Empire Without Tears.

I had come across Dean Rusk’s name in my research on U.S.-China relations and was puzzled by how a man who was so obviously able could have performed so poorly as secretary of state.  When the Sam Bemis-Bob Ferrell series on American Secretaries of State was ready for Rusk, I volunteered to write it.  I had long been interested (perhaps as a remnant of my early interest in psychiatry) in how exceptionally able men went wrong:  Harry Elmer Barnes in American Revisionistsand George Sokolsky in The Chinese Connection, as well as Rusk.  In the course of writing the book, I had several meetings with Rusk.  We had agreed that I would send him sections of the book as I wrote them and he would call my attention to any errors or omissions.  He would not question my judgments.  The process worked well until we got to the chapters on Vietnam when he decided that he would rather watch the Georgia v. Georgia Tech football game on TV than talk about what I had written.  He wrote to me after the book was published taking exception to my conclusions—which, in retrospect, may have been a bit harsh.

Of all the books I’ve written and all the money the Luce Foundation committed to my work and conferences Iriye and I chaired, the Foundation’s leadership was most pleased by East Asian Art and American Culture, published in 1992^[7].  Akira was always pushing me to focus more on culture in my writings.  But the major force behind the decision to write the book was an unsuccessful effort to save my marriage, which had been strained by my research travels and time spent writing.  My wife was a studio artist with a deep interest in Asian art history.  We had written a joint article for one of Iriye’s University of Chicago symposia and Luce gave us a large grant to write the book.  The domestic problem was not solved, but Asian art historians and curators loved the book (more than diplomatic historians, few of whom other than Akira and Frank Ninkovich, understood what I was doing).  At a conference at which I spoke at the Frick in 2012, I was astonished to learn from the keynote address by the Metropolitan Museum of Art’s Asian art curator that I had created a new subfield of art history.

I’m not sure how the idea for the Cambridge History of American Foreign Relations emerged.  Akira, Walter LaFeber, and I were thinking about celebrating our 50^th birthdays by each writing one of the volumes.  Walt would obviously write the second volume, from the Civil War to World War One.  Akira would prepare the third, from the First World War through the Second.  I thought I might try the first after a conversation with Ernest about using contemporary IR theory to write about the late eighteenth and early nineteenth centuries.  Then I asked John Lewis Gaddis to write the Cold War volume, but he demurred.  I decided to write it instead, and to ask Bradford Perkins from the University of Michigan to write the first one.  Perkins was older than we were, but he was in a class by himself as a scholar of late-eighteenth and early nineteenth century American diplomacy.  Initially, Brad was too busy, but a few years later he asked if we were still interested and we went ahead with it.  My Cold War book^[8]was intended to give more stress to Asia, less to Europe.  I obviously succeeded: May reviewed the series favorably for Foreign Affairs, but expressed wonder how anyone could write about the Cold War without mentioning West German Chancellor Konrad Adenauer.

John Gaddis and I had become friends at one of Borg’s conferences and when he obtained funding from the MacArthur Foundation for the Cold War History Project, he asked me to join him with primary responsibility for the Asian side and he made the project an extraordinary success.  We were joined by Sam Wells, then deputy director of the Woodrow Wilson International Center for Scholars, when we decided to base the operation at the Center (where I at later became director of the Asia Program).  I always teased John about being what passed for a liberal in Texas.  He found my later writings on American foreign relations too critical, especially when I wrote about the presidency of George W. Bush.

Toward the end of the twentieth century, I decided to write a book for which I had few qualifications: East Asia at the Center: Four Thousand Years of Engagement with the World.^[9] I had been struck by the discovery of Chinese pot shards in a thirteenth-century village I visited after a safari in Kenya.  I enjoyed the reading, and found all sorts of things that astonished me.  The book was well received, with few references to the arrogance displayed.  I am currently preparing a second edition.

One of my great interests has long been human rights.  I’ve been involved for many years with the American Civil Liberties Union (ACLU), Amnesty International, Doctors Without Borders, Human Rights Watch, the National Association for the Advancement of Colored People (NAACP) Legal Defense Fund, Planned Parenthood, and others.  When I went back to the Rockefeller Center at Bellagio in 2000, I began work on series of essays on twentieth-century people whose efforts I admired: Margret Sanger, Jack Greenberg (NAACP Legal Defense Fund), Muslim feminists, Chinese dissidents, Aung Sang Suu Kyi, Eleanor Roosevelt, Vaclav Havel, Pope John XXIII (my personal favorite) and others.  Of course, I included Gandhi and Martin Luther King.  In the course of my research I discovered that some of them were less saintly than I had imagined.  Sanger’s interest in eugenics and Gandhi’s relationships with women were appalling.  Once again, the publisher insisted on a title I didn’t like: Profiles in Humanity: The Battle for Peace, Freedom, Equality, and Human Rights.^[10] Along those lines, I was outraged when the Board at Cambridge University Press refused to use the title I had chosen for a collection of essays I edited on the Chinese takeover of Hong Kong.  I called it “Red Star over Hong Kong.”^[11]  The Board apparently feared it would offend the British authorities responsible for the deal.

Along the way, I edited eight volumes, some with Akira, usually derived from conferences on American-East Relations that one or the other of us chaired.  I also co-edited one with Nancy Bernkopf Tucker (my second wife—thanks to Dorothy who introduced us and to Bellagio where it all began many years later) on Lyndon Johnson’s foreign policy.  In that book she wrote the essay on China and I was left with the Middle East.^[12]

Other than Profiles and the 5^th and 6^th editions of America’s Response, and my 2000 Reischauer Lectures for Harvard,^[13]most of my writing in the last 20 years has been focused on American policy.  I wrote America’s Failing Empire ^[14]at the request of Ron Edsforth, a former student who was editing a series for Blackwell.  I wanted to explain the weakness of the U.S. approach to foreign affairs after the Cold War and to reveal the foolishness of policies pursued by President Bill Clinton and by George W. Bush in his first administration—the book was published in 2005.

My most recent book, A Nation Like All Others,^[15] was written as a result of pressure from friends and my editors at Columbia University Press—all of whom were eager to shake me out of the paralysis I suffered after Nancy’s death.  Back in the 1960s, the University of Chicago Press had a series on American Civilization and the editor, Daniel Boorstin, asked Stull Holt to write the volume on American foreign policy.  Stull wanted to wait until the war in Vietnam was over and it took too long.  He never was able to write it.  I thought that as his former student, it was my responsibility to write the short one-volume history of America in world affairs, beginning to end (c.2018)—although I wrote it for Columbia rather than the University of Chicago Press.  I intended it to be my last book, filled with my idiosyncratic reflections on American policy from the eighteenth century to the present.  The title tells the story; how I came to realize how my youthful vision of American exceptionalism eroded.

I had one additional experience over the years of possible interest to young historians.  I’ve written hundreds of book reviews and somewhere along the line I became frustrated by the word limitations imposed by the journals.  I think the American Historical Review was giving me 600 words.  I discovered to my delight that I could write them for the Times Literary Supplement, the Los Angeles Times Book Review(back when it was the best in the country) and others and be allowed 1500-2000 words.  And, unlike academic journals, book reviewers for these publications actually got paid for them.

Finally, I want to note that much of what happened in my career was fortuitous and I benefitted at least as much from good luck as from ability.  I won a taxi-cab company scholarship that allowed me to go to Columbia and the Fletcher School.  I got my Ph.D. in 1962 when there were jobs aplenty—and when publishers often begged one to take advances and write a book for them.  My first book, American Revisionists, probably would not have been publishable in an era like this one.  And I was fortunate to encounter Stull Holt, Dorothy Borg, Akira Iriye, Nancy Bernkopf Tucker—and others named in my acknowledgments.

 

Warren I. Cohen is Distinguished University Professor, Emeritus, at the University of Maryland, Baltimore County and Michigan State University.  He has written 13 books and edited eight others.  He is currently preparing a new edition of East Asia at the Center.  He has served as editor of Diplomatic History, president of the Society of Historians of American Foreign relations, and chairman of the Department of State Advisory Committee on Historical Diplomatic Documentation.  He has been a consultant on Chinese affairs for various governmental organizations.

Notes

[1] Warren I. Cohen, The American Revisionists and the Lessons of Intervention in World War I (Chicago: University of Chicago Press, 1967).

[2] Cohen, “Development of Chinese Communist Policy Toward the United States, 1922-1933,” Orbis 11 (1967): 219-237; Cohen, “Development of Chinese Communist Policy Toward the United States, 1934-1945,” Orbis 11 (1967): 551-569.

[3] Cohen, America’s Response to China, (New York: John Wiley & Sons, 1971).

[4] Cohen, Chinese Connection: Roger S. Greene, Thomas W. Lamont and American-East Asian Relations (New York: Columbia University Press, 1978); Cohen, Dean Rusk(Totowa: Cooper Square Publishers, 1980); Cohen, Empire Without Tears: America’s Foreign Relations 1921-1933 (New York: Alfred A. Knopf, 1987).

[5] Dorothy Borg and Shumpei Okamoto, eds., with Dale K. Finlayson, Pearl Harbor as History: Japanese-American Relations 1931-1941 (New York: Columbia University Press, 1973).

[6] Cohen, “The Role of Private Groups in the United States,” in Borg and Okamoto, ed., Pearl Harbor as History,421-458.

[7] Cohen, East Asian Art and American Culture (New York: Columbia University Press, 1992).

[8] Cohen, America in the Age of Soviet Power, 1945-1991 (Cambridge: Cambridge University Press, 1993).

[9] Cohen, East Asia at the Center: Four Thousand Years of Engagement with the World (New York: Columbia University Press, 2000).

[10] Cohen, Profiles in Humanity: The Battle for Peace, Freedom, Equality, and Human Rights (Lanham: Rowman & Littlefield, 2009).

[11] Cohen and Li Zhao, eds., Hong Kong Under Chinese Rule (Cambridge: Cambridge University Press, 1997).

[12] Cohen and Nancy Bernkopf Tucker, eds., Lyndon Johnson Confronts The World: American Foreign Policy 1963-1968 (Cambridge: Cambridge University Press, 1995).

[13] Cohen, The Asian American Century (Cambridge: Harvard University Press, 2002).

[14] Cohen, America’s Failing Empire (Oxford: Blackwell Publishing, 2005).

[15] Cohen, A Nation Like All Others (New York: Columbia University Press, 2018).

• Read more or reply

Back to top

Please help us keep H-Net free and accessible. $25 from each of our subscribers would fund H-Net for two years. Click here to make a tax-deductible donation online.

Contact the Help Desk: help@mail.h-net.org.
Manage notification settings by visiting My Profile > Notifications on the Commons.

 

Think Again: BRICS - Antoine van Agtmael (Foreign Policy)

Think Again: The BRICS

Together, their GDP now nearly equals the United States. But are they really the future of the global economy?

BY ANTOINE VAN AGTMAEL | Foreign Policy, NOVEMBER 2012

"The BRICS Are in a Class by Themselves."

Yes and no. There is no question that the BRICS -- Brazil, Russia, India, China, and the group's newest member, South Africa -- are big. They matter. In terms of population, landmass, and economic size, their pure dimensions are impressive and clearly stand out from those of other countries. Together, they make up 40 percent of the world's population, 25 percent of the world's landmass, and about 20 percent of global GDP. They already control some 43 percent of global foreign exchange reserves, and their share keeps rising.

COMMENTS (8)SHARE:

Share on twitterTwitter

 

Share on redditReddit

 

More...

Jim O'Neill of Goldman Sachs put the spotlight on the rise of the original four of these big new economic powers when he gave them the name BRICs in 2001, and their collective growth began to soar. But in reality their economic success had been a long time coming. Twenty years before that, when I was at the World Bank's International Finance Corp. (IFC), we were identifying the opportunity to rebrand these countries, which, despite their enormous economic potential, were still lumped together with the world's perennial basket cases as "underdeveloped countries" stuck in the "Third World." At the time, Third World stock markets were simply off the radar screen of most international investors, even though they were starting to grow; I gave them the name "emerging markets." Local investors were already quite active in Malaysia, Thailand, South Korea, Taiwan, Mexico, and elsewhere, as homegrown companies became larger and more export-competitive while market regulation became more sophisticated. But until the IFC built its Emerging Markets Database and index in 1981, there was no way to measure stock performance for a representative group of these markets, a disabling disadvantage when stacked against other international indices, which were skewed in favor of developed countries such as Germany, Japan, and Australia. This brand-new research on markets and companies provided investors with the confidence to launch diversified emerging-market funds following the success of individual country funds in markets such as Mexico and South Korea.

The BRICs, however, took much longer to get ready for prime time. Until the beginning of the 1990s, Russia was still behind the Iron Curtain, China was recovering from the Cultural Revolution and the Tiananmen Square unrest, India remained a bureaucratic nightmare, and Brazil experienced bouts of hyperinflation combined with a decade of lost growth. These countries had largely muddled along outside the global market economy; their economic policies had often been nothing short of disastrous; and their stock markets were nonexistent, bureaucratic, or supervolatile. Each needed to experience deep, life-threatening crises that would catapult them onto a different road of development. Once they did, they tapped into their vast economic potential. Their total GDP of close to $14 trillion now nearly equals that of the United States and is even bigger on a purchasing power parity basis.

Here's the problem, however, with asking whether the BRICS "matter": Big is not the same as cohesive. The BRICS are part of the G-20, but not a true power bloc or economic unit within or outside it. None is fully accepted as "the" leader even within its own region. China's rise is resented in Japan and distrusted throughout Southeast Asia. India and China watch each other jealously. Brazil is a major supplier of commodities to China and has relied on it for its economic success, but the two powers compete for resources in Africa. Russia and China may have found common cause on Syria, but they compete elsewhere. And though intra-BRIC commerce is growing rapidly, the countries have not yet signed a single free trade agreement with each other. Then there's South Africa, which formally joined this loose political grouping in 2010. But being a member of the BRICS doesn't make it an equal: South Africa doesn't have the population, the growth, or the long-term economic potential of the other four. Indonesia, Mexico, and Turkey would have been other logical contenders -- or South Korea and Taiwan, for that matter, which have comparable GDPs but much smaller populations than the original BRICs.

The BRICS are also nowhere near economically cohesive. Russia and Brazil are way ahead in per capita income, beating China and India by a huge amount -- nearly $13,000 compared with China's $5,414 and India's $1,389, according to 2011 IMF data. And their growth trajectories have been very different. What's more, the BRICS face stiff competition from other emerging powerhouses in the developing world. While China and India seemed to have a competitive edge for a while due to their low labor costs, countries like Mexico and Thailand are now back on the competitive map. And while growth in the BRICS seems to be slowing, many African countries are receiving more foreign investment, may be more politically stable, and are at long last moving away from slow or no growth toward much more robust economies.

ALEXEI NIKOLSKY/AFP/GettyImages

"The Continued Rise of the BRICS Is Inevitable."

True, but their growth is slowing. Forecasts by Goldman Sachs and others project China will overtake the United States in GDP before 2030. China, meanwhile, dwarfs the other BRICS, whose combined economic size isn't expected to catch up to China during that period. The BRICS will approach the total size of the seven largest developed economies by 2030, and by the middle of this century they are projected to be nearly double the size of the G-7.

BRICS consumers are also beginning to rival their American counterparts in terms of total purchasing power. More cars, cell phones, televisions, refrigerators, and cognac are now sold in China alone than in the United States. Even with slower growth, the economic engine of the BRICS should be more important than that of the United States or the European Union for most of the 21st century.

Then again, there's no guarantee that the BRICS can maintain their torrid growth rates. Just as their expanding economies took the world by surprise over the past decade, the big shock for the next decade may be that they will grow less quickly than assumed. Japan, South Korea, and Taiwan have already shown that growth rates slow down once a basic level of industrialization has been reached. The unquenchable thirst for "goods" tends to moderate when basic infrastructure is in place and consumers want more health care, education, and free time.

To some extent, this is already occurring. Leading Chinese economists now expect China's annual growth to slow down from rates of 10 to 12 percent to 6 to 8 percent by the end of this decade. Dreams of India reaching sustainable annual growth of 8 percent or more have been lowered to 5 to 6 percent after the country hit an inflation barrier and offshore gas production disappointed. Brazil has also struggled to return to its exuberant pre-crisis growth, while Russia has been staggered by Europe's economic problems. The projections by Goldman Sachs and others always expected slower growth for the future, but some enthusiasts did not read the footnotes.

VANDERLEI ALMEIDA/AFP/Getty Images

"The Financial Crisis Was Good for the BRICS."

Not for long. The 2008 financial crisis did not emanate from emerging markets. Instead, the BRICS came to the rescue when the United States, Europe, and Japan collapsed due to their overspending, fiscal imprudence, and overreliance on just-in-time production that made them too dependent on a consumer economy that quickly blew up. After the BRICS suffered brief, V-shaped recessions of their own, as swift in their decline as they were in their recovery, the BRICS' demand helped pull the global economy out of its initial slump.

It certainly wasn't clear initially that this was how the crisis would play out. The Financial Timeswarned (and many investors feared) that the banking systems of emerging markets would succumb to the same massive financial problems that plagued the United States and Europe, but Asia and Latin America had learned their lessons from earlier financial crises and put their houses in order. The Chinese had ample reserves for a fiscal stimulus that was not only massive, but, unlike its U.S. counterpart, also disbursed funds quickly. The BRICS' central banks, along with those in other emerging markets, cooperated on global monetary easing. Without it (and without China's quickly disbursed stimulus at home), Western stimulus and easing would have been inadequate and ineffective. With it, demand for commodities stabilized and the world avoided a depression.

These crisis interventions came at a significant cost, however, the full price of which is not yet clear even today. The real estate bubble, which played such a big part in the United States and Southern Europe, didn't burst in the BRICS. Inflation also increased well beyond the comfort zone of central banks in China, India, and Brazil. Although all this did not provoke another crisis, it might have planted the seeds for future problems. Economic history teaches us that the next crisis usually comes from the region where the applause and self-satisfaction were loudest the previous time around. If that holds true, the next economic shock will more likely than not come from the BRICS.

FABRICE COFFRINI/AFP/Getty Images

"The BRICS Are Unbeatable Competitors."

No. The BRICS benefited for several decades from cheap labor, higher productivity, massive (but far from universal) investment in infrastructure and education, and a hunger to catch up with wealthier rivals. Their transformation was remarkable: With better-off populations, domestic markets finally became economically attractive, South-South trade exploded, and leading corporations transformed themselves from second-rate producers of cheap goods into world-class manufacturers of smartphones, semiconductors, software, and planes. China's Lenovo took over IBM's PC business. Brazilian and South African beer companies became leading global brewers. Just as had been the case with the Russians after Sputnik and the Japanese in the 1980s, the BRICS became feared and formidable competitors, even if some of the fears about their rise were exaggerated.

But the story is not over. Cheap, abundant energy from shale gas is attracting new investment in the United States, giving energy-intensive industries a renewed competitive edge. Abundant shale gas could also make Russian Arctic drilling and Brazilian pre-salt production too expensive. Stagnant U.S. wages and soaring pay in China and India are eroding the BRICS' labor-cost advantage, while their seemingly bottomless labor pool has suddenly started emptying out, leaving them with shortages of trained labor.

Mechanization is also allowing the developed world to make a comeback. Increasingly affordable and sophisticated robots can now do what 10 or more human workers did until recently. They work 24 hours a day and do not ask for higher wages or better benefits. Smartphones and tablets may still be made in Asia, but the BRICS lag behind in taking advantage of the productivity gains they bring. As a result, traditional multinationals are fighting back after years of retreat, from General Motors winning the biggest market share in China to General Electric's foray into producing low-cost medical equipment to Nestlé's invention of the wildly successful Nespresso machines, turning high-end coffee from a store-bought luxury into an at-home convenience. The competitive edge may be turning back to the West much faster than we thought.

ALEXANDER JOE/AFP/Getty Images

"The BRICS Are the Best Place to Invest."

No longer true. Until 2008, the BRICS performed far better than other emerging equity markets -- or developed markets, for that matter. And by a lot: For the five years ending in 2007, investors in the four original BRICs earned an annualized 52 percent return, compared with just 16 percent in the G-7 markets. But in the past five years, through Aug. 31, that figure was -3 percent for the BRICs and -1 percent for the G-7. This was in part a correction to exaggerated expectations, which drove up valuations and currencies to unsustainable levels. It also seems, however, that the BRICS' competitive edge is now being questioned in more fundamental terms. Of course, it makes perfect sense for investors to diversify and not ignore such a huge, successful part of the global economy, but that is different from blind euphoria.

Each of the BRICS is very different, and so are the question marks that accompany their economies. For example, China's wage costs had been so much lower than Mexico's for several decades that Mexico had difficulty competing, despite its closeness to the U.S. market. But that wage gap has closed in recent years -- Chinese labor rates have grown from 33 percent of Mexico's in 1996 to 85 percent in 2010 -- and now investment is flowing back to Mexico. Even when Indian growth rates went through the roof, bureaucracy, budget deficits, and infrastructure bottlenecks remained serious impediments. Brazil successfully turned around its floundering economy in the 1980s and then benefited from three windfalls: China's thirst for commodities, energy discoveries, and a competitive edge as an agribusiness giant. Now, however, China's slowing economy and the world's shift toward ubiquitous shale gas is changing the picture. Or consider Russia, which, to its peril, has squandered its oil-and-gas weapon by pooh-poohing the potential of shale gas, opening up export opportunities for the United States in Europe.

PETER PARKS/AFP/Getty Images

"The BRICS Will Surpass the West."

Not so fast. Yes, the BRICS will remain the main source of growth in tomorrow's world, as they already are today. Together they will dominate the global economy later this century the way Europe and the United States once did.

Just as the pendulum swung far toward the BRICS but then swung back hard in recent years, there are signs of new forms of BRICS competitiveness. Research and development in the BRICS is paving the way for increasingly high-value-added production. Ninety-one percent of U.S. plants are more than a decade old, versus only 43 percent of China's plants, according to a 2007 IndustryWeek survey. While 54 percent of Chinese companies cited innovation as one of their top objectives in the survey, only 27 percent of U.S. respondents did. Chinese telecom equipment-makers are giving more traditional players a run for their money, Indian-made generic drugs are making inroads, Brazilian protein producers dominate world markets, and Russian oligarchs are making smart investments abroad. The BRICS are going through a rough patch right now, yet they're poised for a roaring comeback.

But though the era of American or Western domination may be over, BRICS domination is still some time off. What is already a fact is that the clear delineation between developed and "backward" countries is a thing of the past. Western multinational companies are seeking to expand in the BRICS as growth in their home markets has dried up. Chinese and Indian corporations are building their brands in other emerging markets and the West. More than ever, developed countries' economic fates are tied to those of emerging markets.

Intellectual property remains a strong suit of advanced economies. The United States, Japan, and Germany -- just three advanced economies -- accounted for 58 percent of patent filings in 2011, according to the World Intellectual Property Organization. But even here the BRICS are catching up: China's applications soared 33 percent in 2011, Russia's filings were up 21 percent, Brazil's 17 percent, and India's 11 percent. Compare that with 8 percent growth for the United States and 6 percent for Germany. Chinese telecommunications equipment giant ZTE Corp. dislodged Japan's Panasonic from the global top spot with 2,826 patent applications. China's Huawei Technologies was in third place, while a previous American leader, Qualcomm, dropped from third to sixth place in 2011. Why does it matter? Because patents are a key indicator of future economic strength.

TEH ENG KOON/AFP/Getty Images

"Politics Could Be the BRICS' Undoing."

True, and you disregard them at your peril. The spread of democracy and free markets in much of Asia, Latin America, and Eastern Europe is impressive, but some BRICS have been laggards rather than leaders in this area. Legitimacy in these countries often depends on meeting sky-high expectations for economic success, while political checks and balances remain in their infancy. So forget about all those paeans to "authoritarian capitalism" you read in the op-ed pages. Just because Beijing has a fancy new airport and President Vladimir Putin can bulldoze entire neighborhoods at will doesn't mean China's and Russia's politics give them an edge. Even in democratic India, politics are often overwhelmed by corruption, and politically open Brazil struggles with crippling crime stats and political scandals.

The BRICS may seem stable now, but nobody knows what the future holds. Admiration for oligarchs easily turns into envy and anger. Ubiquitous mobile-phone cameras and instant Internet distribution constrain the use of public force. Under the surface and among the younger generation, pride in economic achievements and a sense of material well-being are now coupled with demands for better health care and national recognition. Increasingly, more is not the answer -- citizens of the BRICS want better. Local elites must act adroitly to keep this new mood from developing into a combustible mix. The current generation of leaders in China has not forgotten the lessons of the Cultural Revolution -- but the next generations may.

Some tailwinds that have benefited the BRICS these past decades may yet turn into headwinds. For instance, these countries have benefited from relatively low budget allocations to military spending -- a fruit of Pax Americana. That could change if conflict broke out on the Indian subcontinent or Iran acquired nuclear weapons. And serious political unrest could easily derail the rise of the BRICS: The Bo Xilai case in China, the upheavals following the Arab Spring, and the power blackout in India were recent red flags that showed the dramatic impact of sudden events.

Still, the BRICS are not going anywhere. Sure, they may face tough adjustments getting used to less lofty growth expectations while satisfying more demanding populations. But one way or another it's safe to say: These big emerging economies will put their stamp on the 21st century.

SAJJAD HUSSAIN/AFP/Getty Images

 

Antoine van Agtmael, a founder and former chairman of AshmoreEMM, is author of The Emerging Markets Century.