Tuesday, April 21, 2015

Two Competing Views

I think the USA is becoming hollowed out from the inside by its elites delusion and greed. I also think it is still incredibly powerful and highly resilient.

Both these essays make a lot of sense:

Pepe Escobar: "Eurasia as we know it is dead"

All bets are off on how the fateful U.S.-China-Russia triangle will evolve. Arguably, it may take the following pattern: The Americans talk loud and carry an array of sticks; the Russians are not shy to talk back while silently preparing strategically for a long, difficult haul; the Chinese follow a modified “Little Helmsman” Deng Xiaoping doctrine – talk very diplomatically while no longer keeping a low profile.
Beijing’s already savvy to what Moscow has been whispering: Exceptionalist Washington – in decline or not – will never treat Beijing as an equal or respect Chinese national interests.
In the great Imponderables chapter, bets are still accepted on whether Moscow will use this serious, triple threat crisis – sanctions, oil price war, ruble devaluation – to radically apply structural game changers and launch a new strategy of economic development. Putin’s recent Q&A, although crammed with intriguing answers, still isn’t clear on this.
Other great imponderable is whether Xi, armed with soft power, charisma and lots of cash, will be able to steer, simultaneously, the tweaking of the economic model and a Go West avalanche that does not end up alienating China’s multiple potential partners in building the New Silk roads.


Tariq Ali: "The new world disorder"
And then there’s the rise of China. There’s no doubt that enormous gains have been made by capitalism in China; the Chinese and American economies are remarkably interdependent. When a veteran of the labour movement in the States recently asked me what had happened to the American working class the answer was plain: the American working class is in China now. But it’s also the case that China isn’t even remotely close to replacing the US. All the figures now produced by economists show that, where it counts, the Chinese are still way behind. If you look at national shares of world millionaire households in 2012: the United States, 42.5 per cent; Japan, 10.6 per cent; China, 9.4 per cent; Britain, 3.7 per cent; Switzerland, 2.9 per cent; Germany, 2.7 per cent; Taiwan, 2.3 per cent; Italy, 2 per cent; France, 1.9 per cent. So in terms of economic strength the United States is still doing well. In many crucial markets – pharmaceuticals, aerospace, computer software, medical equipment – the US is dominant; the Chinese are nowhere. The figures in 2010 showed that three-quarters of China’s top two hundred exporting companies – and these are Chinese statistics – are foreign-owned. There is a great deal of foreign investment in China, often from neighbouring countries like Taiwan. Foxconn, which produces computers for Apple in China, is a Taiwanese company.
The notion that the Chinese are suddenly going to rise to power and replace the United States is baloney. It’s implausible militarily; it’s implausible economically; and politically, ideologically, it’s obvious that it’s not the case.


Purple library guy said...

While I'd agree with Ali that maybe the decline thesis has been overstated, he kind of slides over a lot of stuff on the economic side. I mean, when a leftist makes the case that a country isn't on track to replace the US economically because it doesn't have enough millionaires, I wonder.

The brute fact is that in terms of total production or even dollars of GDP, the US is not nearly as dominant as it used to be, and this trend is continuing. Tariq Ali handwaves that rather. And the shift in Latin America, which he describes as political and ideological but not economic, is actually economic as well--China is displacing the US as leading trade partner in much of Latin America, is increasingly the go-to country for financing. Plus, Latin America has been increasing their internal trade, trying to create local economic interdependence so as to be harder to divide.

It's true the US has "soft power"--which is to say propaganda, since US allies still own most of the media. But if it stops being economically dominant it will inevitably lose control of the media as well and its "soft power" will wane. Military might also ultimately flows from economic strength. It may take a while, but if they lose the top spot economically all the rest will follow. One thing recently that struck me as huge in its implications is that the US was unable to stop its closest stooges (well, except us) from jumping on board China's Asian Infrastructure Investment Bank. Money talks, and even the likes of England just served the Americans notice that China has that stuff too now.

thwap said...


All true. But per capita, China is still a poor country. A lot of its economy is foreign owned. R & D wise they're actually nowhere close to other countries.

But they're more than strong enough to defend themselves, and therefore, resist the US elite's "all or nothing" demands.

And they're going to get stronger.

As I said, the USA's elites seem bent on weakening their own society's economic fundamentals and destroying their state's ability to run things.