Riveted by screaming headlines about China’s astronomic growth rates, the world tends to overrate the BRICs’ collective economic heft. It’s a terrific example of what psychologists call “availability bias.”
On the one hand, the IMF estimates that, after adjusted for purchasing power, the BRICs collectively are already about 15% bigger than the U.S.
On the other, take away that bit of economic affirmative action, and look at wealth in real terms, and the U.S. GDP ($14 trillion) is almost 40% larger than all four BRICs combined ($8.6 trillion).
Put another way, the BRICs account for about 15% of the world ’s economy, with China making up about 8%. Meanwhile, the U.S. alone accounts for almost 25%- pretty much where it’s been for the last 40 years.
Look at the average U.S. citizen, and the differences are even more eye-popping.
Even with the artificial boost of purchasing power parity, one U.S. citizen is almost eight times richer than the average BRIC citizen. After all, there are 2.6 billion total citizens in the BRICs and only 308 million Americans. And over 200 million Indians alone live on less than $2 a day.
Using real GDP- the way, say you would assess the world’s wealth sitting on the moon, gazing down on planet earth- the average American is almost 15 times richer than her BRIC counterpart.
Although some isolated pockets of BRIC economies like Moscow may house big chunks of wealth, compared to your average BRIC resident, a West Virginia hillbilly lives like an English Lord.