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Everything about the present state of the world appeared to be unsustainable or unbalanced or unjust — and most of the anomalies appeared to centre on the US. Let me give just a few examples.

Americans have been the richest people in the world since the late 19th century, but in the postwar decades Western Europe and Japan dramatically narrowed the gap in living standards, productivity and social conditions. In the past decade, however, this process of convergence has come to an end. According to the OECD’s studies, the US has been widening its lead over all other advanced economies since the mid-1990s — and, according to most key economic and social indicators, this divergence is likely to accelerate in the years ahead.

When we combine America’s widening economic supremacy with the military hegemony that has been demonstrated so spectacularly during the past two years, the rest of the world’s jealousy and resentment is easy enough to understand.

Everyone knows that America’s military dominance rests ultimately on the power of its economy — according to one estimate presented at the forum, America will spend more next year on defence equipment than all other nations combined. From this self-evident proposition it is an easy (though entirely erroneous) leap of logic to assert the converse: that America’s unparalleled wealth and superior economic performance depend on abuse of its military power.

The idea that free trade is a form of exploitation — that the gains to the rich countries and the multinational corporations must be at the expense of the poor — may have been logically refuted 200 years ago by David Ricardo and empirically disproved in the most spectacular fashion by the experiences of Japan, China and Korea. Yet the irrational appeal of protectionism seems to be spreading, along with the illusion that America is somehow translating its military hegemony into an imperialist abuse of the global system of free trade.

Another symptom of America’s alleged abuse of the global system is said to be the $500 billion trade deficit that it runs up each year. This surely makes the global economy entirely unbalanced and its growth unsustainable. How can Americans continue to live beyond their means to this extent? Their ability to keep buying so much more from the world than their industries manage to export must indicate an abuse of the dollar’s reserve currency status, a status which in turn, is often said to depend on America’s hegemony of military power.

This is completely wrong. America is actually doing the world a favour by buying more goods than it produces at a time of global mass unemployment. The reason for the US trade deficit is not the profligacy of US consumers, but the stupidly deflationary bias of economic policy in Europe and Japan. The imbalances in the global economy are not the responsibility of Washington but of Frankfurt, Tokyo and Brussels.

If European politicians and central bankers begin to understand all this, Europe will have a chance to catch up with America. Until then, America, Britain and China will reap the benefits of globalisation while Europeans continue to sulk resentfully on the sidelines.

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