Chinese and American flags flying together
One of my long term predictions, coming true before our eyes, was that the world would fall into a new cold war, forming two trade blocs. I hoped it wouldn’t happen, I suggested ways to avoid it (including Europe forming the nucleus of a third bloc), but so far it appears correct.
Khrushchev famously said “we will bury you!” Looking back and knowing that the USSR and Warsaw Pact collapsed, we laugh.
But he had reason to believe it. Soviet style Communism had some issues, but in the 50s, it looked like the superior system. It had avoided the Great Depression, it had been the most powerful state in the coalition defeating the Nazis, it had by far and away a larger military than NATO and its economy was growing faster.
This last bit really worried the West. The miracle of compound growth, and all that. The Soviets weren’t just growing faster than the West, they had been doing so for a couple decades.
The West had strengths, including a larger population, a corner strategic position, a larger economy (even if growing slower) and the technological and scientific lead.
When the Soviets put a man into space first that scared the hell out of the West.
Now, of course, in the end they did “lose.”
Now take a look at the “Golden Billion”, NATO plus Japan and South Korea. Lower population. Weaker military (yes, it is.) Behind in 80% of techs. Slower economic growth. Smaller real economy (industrial/resources.) They still might be considered to have a corner position (though not once the Chinese unambiguously have the stronger navy, which they will), but it’s the only advantage they have.
The original Cold war started off with NATO leading in tech/population/economy/position, and behind it economic growth/military size.
This cold war starts with the “Golden Billion” ahead only in strategic position. (Continental US, Europe as a corner position.) Arguably even this isn’t true, given that South Korea and Japan are now key parts of the coalition and extremely vulnerable. As we speak, the US is slashing spending on research and tech, with only a few exceptions (like AI.)
No one, and I mean no one with least bit of historical understand or common sense would bet on the “Golden Billion”. If you are doing so you are stupid. Yes, there’s a small chance, but it is tiny.
The only sane and statesmanlike response from those in charge of American vassal states is to figure out how to switch sides, without the US wrecking them, and how to get a good deal. If you can’t, the question is how to avoid the US looting you during its decline. As Sean-Paul Kelley wrote on Sunday:
The chaos of rising energy prices is devastating European industry. In the last year alone Germany has lost 196,000 businesses. I repeat 196,000 businesses in Germany closed in one year. That’s devastating to any economy, but Germany long the economic engine of Europe and the EU is deindustrializing for one simple reason: the destruction of the Nord Stream pipeline, which has been an absolute catastrophe for Europe. The United States is responsible for it.
Russia and China just signed a new pipeline deal. The energy that went to Europe (the cheap energy) is now going to go to China. Chances of Europe avoid de-industrialization have gone from slim to damn near none.
The Soviets pumped resources to their allies. The Americans are cannibalizing them. The Soviets made a mistake, but this strategy won’t work either, because a fundamentally financialized economy cannot produce the type of real growth which is required to win a great power competition.
The world is dividing into two great blocs. One of them is so much weaker than the other, with so much worse future technological and economic growth prospects that it is almost certain to lose.
Our side.
The best way to win a war is to ally with the stronger side. That isn’t America or NATO or the Golden Billion.
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Troy
I see economists such as Krugman declaring we’re likely going to see stagflation. I think, how optimistic. There’s the creeping possibility of a deflationary spiral the longer things continue on as they are.
Feral Finster
If the golden billion cannot win a trade war, the alternative is simply to smash their opponents up, cut off shipping, cut off banking access, dangle out enticements to defecting members of the coalition.
cc
“The only sane and statesmanlike response from those in charge of American vassal states is to figure out how to switch sides, without the US wrecking them …”
Canada should ditch the F-35 rip-off scam with its de facto US “kill-switch” and the 100% tariffs on Chinese EVs that Canada adopted to back the US.
That would help our canola farmers who are paying the price for those 100% EV tariffs, and open up and important and growing market to Canadian exporters (as opposed to the shrinking protectionist market south of the border.)
Set up joint ventures for Chinese EV factories in Canada (ex. BYD, etc.) – like Mexico has – to create Canadians jobs, receive technology knowledge transfer, help the climate, and benefit Canadian consumers with affordable vehicles.
We, of course, need to also restore and reinforce Canadian sovereignty throughout our government and media to stop being manipulated and controlled by the US. Canada had been actively pursuing a trade deal with China in 2018 – in a sovereign attempt to diversify our trade and economic ties – before the US foreign-interfered to make sure to destroy that relationship and keep us completely dependent and vassalized.
Curt Kastens
I think that we have to consider what those tiny little living things in ocean that produce 2/3s of earths oxygen will do in the next 1 to 15 years. If they decide to die, or even produce less oxygen due to warmer oceans and more acidified oceans and oceans with more microplastics then all of the growth that China and India and Brazil manage to produce will be swamped by swamp gases that produce chaos
And even if those tiny little living things in the ocean do manage to keep on working as usual will that be enough when the rain forests are dying off due to drought and be deliberatly burned out to make pasture land for cattle to feed more people more hamburgers.
China is every bit as vulnerable to these global changes as the USA is. Having 10 times as much steel and concrete as Europe or the USA is not going to save the Chinese from humanities perfectly perdictable demise.
Oh oh I forgot the demise is not predictable because scientists working on AI are going to create this wonderful new form of intellegence called Artificial Intellegence that is going to save us all by helping us figure out things that we could not figure out for ourselves. Not only will we not die BUT WE WILL BE MORE PROSPOROUS THAN EVER.
HHHHAAAA.
Feral Finster
cc: that’s like saying that the family dog should strike out on his own and be a cat.
Like the dog, Canada will do no such thing but remain faithful to Master, yea, unto the end.
GM
History teaches us that underestimating the treachery, rapaciousness and sheer savagery of Western Europeans can be a fatal mistake. That has been the consistent pattern for centuries, and many have paid for that error with the everything they had.
It continues to this day.
While it is true that the strategic situation is firmly against the West now, it was largely so in the 1970s too, and we know how that turned out.
In the 1970s and 1980s the West first went bankrupt, which was the financial manifestation of the underlying physical reality of hitting peak conventional oil production, and major cities looked like post-apocalyptic warzones in a way that even today they really don’t. Sure, you have the famous decay poster child examples such as Kensington Ave. in Philadelphia, the shanty towns in northern California, downtown LA, etc., but you just have nothing comparable to the Bronx of the early 1980s, and it wasn’t just the Bronx that was like that back then.
There was absolutely nothing like that in the USSR, in fact the 1970s were the golden age there. And it looked like it was winning the geopolitical battle too — look at the map in the late 1970s, you had more of it painted red than ever before. The Vietnam War had been won, but it was a lot more than that — countries from Grenada through Benin, Mozambique, etc. to Yemen and Afghanistan were communist or socialist.
Yet then it all collapsed in the 1980s. Why? Because so much real wealth had been built up and placed in the commons in the socialist/communist East that an enormous potential socio-economic energy had accumulated that, just like a megathrust earthquake, was just waiting to be released, in the form of looting the commons by private individuals. But in order for that to happen, the system had to be destroyed, and so it was, in the grandest single act of treason in all of human history.
And the Anglo-Saxons came out on top without even really fighting directly.
Yes, they did have more advantages back then than they do now in terms of technology. But it was not the first time they have pulled this trick — they had absolutely no business subjugating and then sucking India dry the way they did if it came down to balance of power, and yet they did it, through treachery and masterful manipulation of the opponent.
That fundamental problem — the unique vulnerability of their opponents to that kind of malign non-kinetic influence — has not been resolved at all, and thus one cannot write them off until they are completely dead and buried.
As it is, despite them falling behind industrially and technologically, their control over the globe is growing, not shrinking. The process of relative decline has been ongoing for a while now, yet they are achieving one major geopolitical victory after another and that process accelerated in the last few years. Practically all of the old Soviet allies have been either destroyed or flipped:
— Yugoslavia. Destroyed, most of the pieces flipped, and even Serbia supplies Ukraine with ammo
— Old Warsaw Pact — all flipped
— post-Soviet republics — Ukraine needs no discussion, but half the others have also been flipped, they are just not at war with Russia directly yet
— In the Middle East Iraq was the first to be destroyed, then Libya, now Lebanon and Syria too. Syria in particular is such a gigantic loss that it may well have been the moment WWIII was lost for the “resistance” (remember that Brezhnev considered Syria important enough to actually send the nukes to defend it back in 1973).
And that happened just in this last year.
Then they felt emboldened enough to attack Iran directly, and nobody did anything to defend Iran.
So one can’t help but draw parallels with the situation from centuries ago, when, again, Europe had no business subjugating the whole world if it came down to raw power, but it did so because what raw power it did have, it used to the fullest, combined with very skillful application of divide-and-conquer tactics and bribery, while the rest of the world did not really actively fight back when it had a chance.
I don’t see anyone seriously fighting back, but I do see a lot of very skillful and successful application of divide-and-conquer tactics and bribery.
Yes, you can argue that, you see, as I just said, in the late 1970s the maps had more red on it than ever before, and yet that was the moment just before the collapse. But there is a major asymmetry here — it was very easy to see how those socialist and communist governments could collapse and be replaced with pro-Western ones, while it is not at all easy to see the reverse happening now.
Also, China is building up gigantic amounts of real wealth in the commons now too. Yes, it is a mixed economy, but there are still countless trillions there to be privatized and looted. So it is still a similar situation to the late USSR — there is enormous potential socio-economic energy there to be released through a grand act of treason, even though it looks unthinkable now. It won’t happen tomorrow, but it looked unthinkable for the USSR circa 1975 too…
cc
@Feral Finster, sadly that might be so. But that would mean Canada has no real democracy, no real sovereignty, no real agency. And perhaps if we did have leadership that really tried to do what’s best for Canadian sovereignty and for Canadians, the US would probably seek to regime change Canada as they did to Australia in 1975, Ukraine in 2014, probably Nepal right now, and far too many other places before and in between to list.
Canada being next to the US is like Ukraine being next to Russia. We will always want to try to be on good terms with the US, just as it makes sense for Ukraine to always try to be on good terms with Russia. But seeking to diversify our trade and military purchases to not be so overly-dependent on the US is quite different from Ukraine being suddenly transformed into a hostile US/NATO military threat right on Russia’s border between 2014-2022. That’s closer to the metaphor of turning a dog into a cat, and the consequences have been tragic.
But as Ian is pointing out, the world is transforming – do we really want to continue to be so dependent in a toxic, psychologically-abusive relationship, or do we want to start to be able to stand up for ourselves?