The economist Dambisa Moyo (left) and the historian Niall Ferguson (Eliza Beveridge) 

Daniel Johnson: I want to start with something that happened exactly 100 years ago, in 1911. Oswald Spengler had the idea of writing The Decline of the West during the Agadir Crisis — a bit of gunboat diplomacy by the Kaiser which went wrong. Spengler decided this was an example of the West losing its nerve and he began this whole genre of literature about Western decline. He included the threat from Japan — "the Yellow Peril" — but now we talk about China. So is this something really new that we're talking about, or have we been here before? And how worried should we be?

Niall Ferguson: What's novel is that now nobody in their right mind believes history is a seasonal process, as Spengler did, and that we're somehow destined by some natural force to enter the winter of our civilisation's existence. 

DJ: But some people think the decline of the West is inevitable, don't they?

NF: That's right. They might have a different model from Spengler's, and there are lots of different ways of thinking about the historical process. Most people like to think of it as being cyclical — I think that's wrong actually, but that's why people keep coming back to this idea. We're all young enough — or should I say old enough? — to remember Paul Kennedy's Rise and Fall of the Great Powers, which said in the 1980s that the West was in trouble, and Japan and West Germany were going to overtake the United States. We've seen this movie more than once and it's a recurrent feature of the 20th century that somebody at some point is predicting the decline of the West. But what I think is different about today is that compared with 1911, there really is a very rapidly narrowing gap between the West and the rest, which there wasn't then. True, before 1911, one non-Western country — Japan — had begun the process of catching up but it was still miles behind. It had some industry, but by comparison to Britain or any of the major European powers, and particularly in comparison to the United States, it was tiny. We're in a different world now because if you use purchasing power parity as a measure, China's gross domestic product is close to 90 per cent that of the US. The Soviets never got that close. For the first time since 1872, there is the possibility of another economy being bigger than that of the US, and it could happen within the next ten years.