Changes in the global pecking-order are relatively rare. The tendency is for countries that are doing well to keep doing well, whereas those countries that are doing poorly keep doing poorly. But not always. As of the first world war, Argentina was one of the richest countries in the world for many of the same reasons that the United States was one of the richest countries in the world. But the two countries’ trajectories began to diverge enormously after the Great Depression:
The Depression brought FDR and a more active federal government to the US. To Argentina it brought dictatorship. Nationalism and self-sufficiency became attractive; hapless democratic governments passing power ineffectually between each other did not. The man who came to embody the new doctrine, Juan Perón, was one of the leaders of a military coup in 1943. He became president in 1946 and projected an assertive, disciplined nationalism. He encouraged a cult of personality and urged Nazi-style economic self-sufficiency and “corporatism” – a strong government, organised labour and industrial conglomerates jointly directing and managing growth. These ideas came to the US, too, but few took them seriously. [...]
In 1950 Argentine income per head was twice that of Spain, its former coloniser. By 1975 the average Spaniard was richer than the average Argentine. Argentines were almost three times richer than Japanese in the 1950s; by the early 1980s the ratio had been reversed.
I’m not sure there’s a totally unequivocal lesson here for the present crisis other than to make the point that it really really really matters a great deal to try to make these decisions correctly.