The horizon is not so far as we can see, but as far as we can imagine

How Elites Liquidate National Advantage (Fall Of The American Empire)

This is a story as old, and probably older, than civilization and isn’t unique to elites.

It is the question of group interest versus individual interest; or national interest versus internal group interest.

National advantages have to be sustained. If you have a technological lead, you don’t give that lead to another nation which is a competitor. If you have a production lead, you don’t help a competitor improve its production anywhere near close to yours. You may give them something from the prior tech generation, maybe, but never the current one.

This is unfortunate, a better world could be created with more sharing, but that would require a world in which nations and elites don’t compete with each other in devastating ways.

In our world, however, when nations get an advantage, they use it to hurt other nations: in the case of extreme advantages to conquer them, in the case of more relative advantages, to take hurt them economically. A recent example is how Germany used the Euro and the EU to damage the manufacturing industry of other EU nations: the Euro was priced too high for them to compete, but was lower than the German Mark would have been and the result was devastation to countries like Italy, especially when added to the inability to control currency issue and interest rates that the Euro essentially imposes.

This is a case where a regional elite in a federation put themselves before the rest of the federation, leaving the federation as a whole weakened.

Most people have forgotten just how much industry, technology and people Britain shipped to the US. This made the US overtake Britain as the prime industrial power decades, maybe even generations before it otherwise would have. That allowed the US to impose its peace terms in World War I, and after World War II to subjugate Western Europe, including Britain, and force Britain to divest of its Empire on unfavorable terms which crushed its economic viability.

It’s important to note that there are periods where this doesn’t happen. Britain’s rise, economically, started when it decided to stop allowing the export of raw wool to the Netherlands in order to force the creation of its own woolens industry. Once Britain gained a technological lead it had laws forbidding people with important skills and knowledge from going to other countries to share that knowledge and it carefully protected its industries thru various mercantale policies.

These sorts of policies work and exist when elites in a country have the feeling that the rise and fall together. But by the late 19th century British elites were in cut-throat competition with each other. If you didn’t keep up, you got bought out or couldn’t sustain your estates.

With large numbers of elites threatened with dropping out of the real elite (people with power and money, not just enough wealth to not worry about money) elites were willing to betray and policies were changed to allow the export of technology, skilled workers and knowledge. Since the US was a continental state with a larger population, such transfers, though they made many individual investors and capitalists in Britain richer, not only weakened Britain’s position, but inevitably lead to America becoming more powerful than the US. (Remember that the UK essentially won the war of 1812.)

Now note that some transfer to weaker allies can work out. The US was damaged by Japan’s rise after WWII (as anyone who was at least a teen in the 80s remembers) but because Japan had a smaller population and less of a resource base, Japan could not overtake the US, despite fears at the time. The same is true of South Korea and Taiwan, neither of which could have industrialized the way they did without US aid.

Making them rich industrial nations made them stronger allies and while it did weaken the US relatively, it improved America’s geo-strategic position in some ways.

Understand that America had very protectionist policies for a very long time, and they worked. Industry was built behind significant tariffs, intellectual property was stolen wholesale (the Brits of the 19th century were as upset about it as Americans are now at China) and trade was carefully managed.

Generally speaking, American elites, especially after the civil war, were united in feeling that America’s increased power was their increased power and wealth.

This remained true thru the first two and a half to three and a half decades after WWII, but it changed with the ascent of Reagan. In the old system, regional elites were protected and monopolies were heavily regulated. This started chanting in the 70s, with the rise of huge conglomerates, but was formalized in 80s under Reagan, which is when consolidation really took off. As various industries entered competition to buy out their rivals, those who were bought out left the true elite: they might have a lot of money, but they no longer had the power created by control.

This process lead to desperate need for profits: anyone who fell behind, even just by getting richer slower, was in a position to be bought out and thus thrust out of the elite.

And so American elites sought higher profits, even if it meant moving industry and technology overseas to the only country (India was not really a contender) which was larger, in effect, than the US: China.

This was precisely the mistake made by Britain and had the same consequences: the loss of the manufacturing lead, which will be followed by loss of the technological lead, the delay probably being two to three decades.

American elite competition became too fierce, internally. Threatened by loss of elite status, American leaders sold their country’s lead in order to maintain and indeed, increase their internal power within the US. America became relatively weaker, but those elites who retained elite status: who won the internal competition, became more powerful within a weaker America.

There were plenty of knock-on effects from this: soaring inequality, for example and popular dissent. The rise of Trump and so on is a direct result because part of elite competition was to find ways to take from the middle and lower class. It wasn’t just about going overseas. But high inequality societies, all else held constant, are weaker than more egalitarian ones, so this too was a weakness and the political instability and weakening of citizenship and consumers also hurt the US.

In a real way this is just the large scale of something which happens to groups: if the group doesn’t work for most of the group, if people don’t feel that making the group better off makes them better off, then people betray group interests since group and individual interests have become dis-aligned.

Great leaders have always understood this dynamic, and it is at the heart of “we must all hang together or we will all hang separately.” Like many such statements (another is “a rising tide lifts all boats”) it is not descriptive: it is prescriptive. One must make it so that betraying doesn’t make more sense than looking after group interests. If a group doesn’t, the group will become weaker and in worst case scenarios, group members may lose everything.

Indeed, as I’ve noted before, I expect Britain to break up and become England, Scotland and Ireland. There is a very good change England will become, essentially, a third world nation again.

But this process takes a long time. The initial betrayers lived 170 years or so ago. They died long before the cost came home, many even before the cost of post-WWI humiliation. This is another version of the death bet: “this will hurt terribly, but I’ll be dead before it does.”

I don’t think America’s decline will take as long Britain’s has, but it’s also cushioned by the fact that America is a continental power. Russia is far from what it was, but still a great power, and the same will remain true for the US for a long time, absent break-up, because of its sheer size and momentum.

Still, elites betrayed and the price will be America supremacy, long before it had to happen. Perhaps that loss is a good thing: the US was not a particularly kind Hegemon, especially after the fall of the USSR, and perhaps a two-polar or multipolar world will be better, though it’ll be hard to disentangle and be sure of that simply because of the crushing costs ecological collapse, climate change and human population overshoot.

Nonetheless, elites which did not engage in cut-throat internal competition would have hung onto power longer. They are losing their power precisely because they betrayed internally, and that led to external betrayal.

(See also: The Red Queens Race, Neoliberalism & Why Healthcare is Being Privatized.)

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  1. Feral Finster

    “Most people have forgotten just how much industry, technology and people Britain shipped to the US. This made the US overtake Britain as the prime industrial power decades, maybe even generations before it otherwise would have.”

    People also forget that a prime gripe in the first half of the nineteenth century was that Americans infringed upon British patent rights and used those to build their new industry, also how American tariffs were used to protect American industry from foreign (read: British) competition.

    And of course, Britain had captive markets in the form of colonies, in particular, India.

    “That allowed the US to impose its peace terms in World War I, and after World War II to subjugate Western Europe, including Britain, and force Britain to divest of its Empire on unfavorable terms which crushed its economic viability.”

    It also didn’t hurt that America was not completely tapped out, physically, spiritually, and financially, from WWI and WWII. To look only at WWI, H.M. Exchequer was in several occasions within days of hard default – and that *after* the United States had entered the war.

    In fact, the biggest lobbyist for American involvement in WWI was the House of Morgan, as J.P. Morgan had lent vast sums to H.M. Government, and had acted as syndicate manager for even bigger loans, and was concerned that he and his buds might not get repaid.

  2. Purple Library Guy

    I generally call this stage where elites, whether out of desperation or greed, operate to further mostly their own individual interests rather than collaborating in a national project “decadence”.

  3. elkern

    One very big difference between the two transitions (GB to US vs. US to China) is that USA was a “natural” ally of Britain, and subsequently saved Britain from Germany – twice. Despite the commercial competition and the resulting political friction, Britain and USA have always had a lot in common, most notably, Language, but including other cultural, religious, and political connections. Britain won the propaganda war for American “hearts and minds” during both World Wars.

    As Feral Finster points out (above), there were very real links between the financial systems of the two countries, and the biggest Banksters in any country always (?) have political power.

    But also, the soft power of the British Monarchy has long had a strong following among America’s “lower” classes. (This phenomenon is probably limited to WASPs, but that group was a majority until recently).

    Furthermore, the political and economic systems of the two countries have a lot in common. Both are/were limited Democracies, with built-in mechanisms to allot extra power to the Rich (Senate = House of Lords); both allow great freedom to financial and commercial interests, and relatively high personal freedoms even to “lower” classes. They share(d) a common mythos of middle-class supremacy. Britain’s Aristocracy was explicit, America’s was more fluid but still there (and anyway, Peerage had long been for sale in Britain, so what’s the difference?).

    OTOH, the USA “outsourced” it’s industrial (and therefore technological) base to a country with a completely different culture, both ancient (Confucian) and new (Communist).

    And it’s already obvious that China isn’t gonna rescue us in the next World War.

    if Wall Street imagined that they could somehow control China through financial strings, they were as stupid as they were treasonous.

  4. Jan Wiklund

    Charles Kindleberger, who has followed the economic history since the Italian city-states poses it like this:

    “Merchants and industrialists graduate from risk-taker to rentier status, and conserve flagging energy. Consumption out of given income rise, savings decline. Various interests push their concerns at the political leven, and if enough do, they block effective government action. Income distribution tends to become more skewed, the rich richer, the poor poorer. With greater access top the reins of political power, the wealthy are likely to resist some ethically appropriate sharing of national burdens, such as the costs of defense, reparation, infrastructure and other public goods” (World Economic Primacy, 1500-2000).

    Quoted and liked by William R Thompson & Leila Zakhirova, Racing to the top, who have followed the development from the Roman empire, through Song China. Bas van Bavel have done the same from the Abbasid califate and found the same process.

    When a ruling class feels itself secure because the dominate the world it become lazy and pampered. It can’t be avoided.

  5. different clue

    @Feral Finster,

    Most Americans were very against entering WWI. Great Britain was conspiring and conniving as hard as it could to get America into WWI. And Woodrow Wilson ( 20th Century America’s most evil President) was also conspiring and conniving as hard as he could to get America into WWI. Putting secret shipments of rifles for Britain aboard the Lusitania to bait the German U-boaters into sinking it, while making very sure the civilian passengers knew nothing about their presence, helped get America into the war. So no one should feel sorry for Britain about America “imposing its peace terms” after the war because Britain connived and conspired its hardest to get America into the war to begin with.

    Without that joint British-Wilson conspiracy to get America into the war, Morgan could have howled at the moon all he wanted over his lost money.

    Also, was the Versailles Peace really imposed by America? Or was it a joint Franco-British punishment conspiracy against Germany? What exactly did the US do to make the Peace so very Versailles?

  6. GrimJim

    The US is a vast machine run by many different cogs working at different speeds… Wheels within wheels within wheels.

    Economic, social, religious, ethnic, philosophical… All the potential aspects or elements of history that work together to build a society, a nation-state, and keep it running.

    These great wheels turn, as time turns, and work in very predictable fashion, like the clockworks they are. We are already at a time when all the little, lesser, minor, major, and greater wheels are turning to a point where each shifts in its place and a new cycle begins, when the machine is ready to fall apart all on its own…

    That is bad enough, and would be an incredibly difficult time to survive as a nation-state, let alone as an empire. But we’ve got three additional factors working against us.

    First, climate change. This one is bad enough to sweep away all the machines, shatter all the wheels, drown all the cogs, all on its own. By its nature, however, it will be the least predictable in timing and magnitude of events. But we are entering the first wave of changes that will reset a new, temporary equilibrium. None of these waves of changes are good for human civilization. Each wave will make civilization ever more tenuous.

    Second, the rest of the world is ready if not eager to take the Great Imperial Hypocrites down, to make it pay for its century of hypocrisies, to show the emperor that it wears no clothes. every other empire in history was honest about its intentions — we always hidcours behind propaganda and outright lies. Many seek revenge, with good reason. Even its allies — unwilling satrapies as they are — would not mind taking a few hits to give us better than they get.

    Third and most damaging is that a good half or more of the citizenry and their leaders seek to gum up the works and tear it all down, some for what they perceive as their own benefit (mostly the leaders), but most simply because they are immersedcin a cult of ignorance and hate, and follow those leaders blindly who would let them slake their thirst for “vengeance,” for mostly imagined slights (and those few true harms they suffer, mostly unwittingly at the hands of those self same leaders).

    Many, many have sinned in this regard, but I’d say the three individuals most responsible for the current state of affairs are:

    Ayn Rand, who provided a philosophical basis for psychopathic narcissistic greed so powerful it provides its followers with the cognitive dissonance to be able to claim to be followers of both Rand and Christ.

    Grover Norquist, whose beliefs have poisoned the minds of every Republican politician for decades.

    Rush Limbaugh, who popularized and allowed public growth of reactionary hatred on a level that surpassed the wet dreams of the Klan and the Silver Shirts back in the day.

    None of them, of course, could have had the effect and influence they did without support from above and below. But had these three been absent from history, I think we’d be in a much better place right now as a society and as a government.

    But as things now stand, their followers today represent a greater immediate internal threat to the US, its government, and its people, than any external threat.

  7. VietnamVet

    The world is at a turning point. With the fall of the USSR, the Western Elite negated the western nation states and superimposed free trade institutions upon the world whose primary directive is the free of movement of people, capital, goods and services in order to make more money for themselves. For example, Greece was subjected to EU rules and bailed out without the need for the Wehrmacht.

    The current proxy world war III in Ukraine, de-dollarization, and the rise of the Eurasian Axis basically terminates EU, NAFTA, WTO, and so on. No wonder Secretary Tony Blinken instead says and believes that Ukraine will seize Crimea this summer and as a result the Western Empire will remain the global hegemon. But this is simply crazy insane. This is already a multipolar world. Saudi Arabia has switched sides. OG’s leaks show that the Deep State does not think that Ukraine has the manpower and armament to defeat nuclear armed Russia. The Kremlin is clear; it will use tactical nuclear weapons before it loses Sevastopol Naval Base, once again.

    This post is correct about the past. But the USA is already splintering apart with the culture, ethic and class divisions emphasized to facilitate the global divide and rule of the rabble. It is highly unlikely that the democratic constitutional republic can be restored. The Elite have nothing to gain from the restoration of the rule of law except staying alive in jail. They will use their money to keep things the way they are, a monopolistic extractive oligarchy.

    The powerful have lost contact with reality. There is no feedback. Voices of sanity are threatened with jail and fired. If a nuclear war with China/Russia is avoided, instead of remaining united, North America will devolve into feudal ethnic autocratic fiefdoms associated with the nearest nuclear armed military bases with the regions in between filled with cults, tribes and cartels hard-scrabbling the land to stay alive.

  8. Trinity

    “the price will be America supremacy”

    But isn’t this the point? American supremacy is the government. The desired supremacy are the multinational corporations, or the Ritchie Riches, as the “one true government” and the only government, the world government. Why pay off politicians when you yourself can rule the world?

    I was listening to a British podcast last night, and an ad came on. It was for a British talk show (or something) and the topic was: “Europe’s Royalty are Planning their Return” (or something similar, it was late and I was tired) beginning with Charles’ coronation.

    This could get interesting. It’s always interesting when the bullies fight among themselves.

  9. Laura

    In other news, Ron DeSantis went to Jerusalem to sign HB269 which criminalizes speech in Florida & makes leafleting “offensive” flyers punishable with a felony and 5 yrs in prison, along with other acts of constitutionally protected speech.

    Grant Smith of IRMEP:

    “The 1985 U.S. – Israel ‘trade deal’ has produced the highest inflation adjusted cumulative merchandise trade deficit—$365.9 billion—since going into effect.”

    That figure is assuredly low – I imagine the number is closer to a trillion, minimum.

    In 1984 American companies were steamrolled by corrupt politicians on the take from AIPAC-directed stealth political action committees or PACs. Today, captured U.S. federal and state agencies channel hundreds of millions of taxpayer dollars away from American companies into the coffers of new, often incompetent, Israeli market entrants.

    In other words, the deal was opposed by almost the entirety of US manufacturers, including the very powerful California Agriculture Industry.

    Its biggest supporters were The Israel Lobby (essentially ‘international finance’) and the Heritage Foundation.

    This was the THE bilateral that opened the floodgates and led to NAFTA and the finalizing of decades of GATT, in the remade form of the WTO:

    AIPAC Israeli Economic Espionage Against US Hits $366 Billion

    State Dept: Israel in Charge of When We’ll Enforce US Bans on Foreign Aid Over Its Nuclear Weapons Program

  10. Willy

    How elites liquidate national advantage

    One of the better pithy descriptions of what actually goes on, that I’ve seen. I’ve seen lesser elites liquidate a company’s advantage as well, but those places were run far more authoritarian than is allowed in a democratic republic. In those places it was usually the selfish control freaks who rose to power, less frequently the qualified managerials with the management skills we see described in all the management books we find in thrift stores.

    I have two sisters, a shy empathic one and a tough-minded selfish one whose attitudes dominate the other. Lifelong, they’ve always been this way. The empathic wants to get along to go along while the other is a control freak. As kids, the control freak loved irritating me for the thrill of the chase. She’d irritate until I chased. No amount of stern reasoning or threats or cauliflower ears or spock holds or bitching to parents ever made a difference – she loved yanking my chain. In hindsight, I did have a strategic option. I could’ve warned her (and our parents) repeatedly until finally carrying through with beating her into the hospital, mostly about her face (she’s pretty) which later became her fortune. The reason why I did not, why I’d always pulled my punches, was because I assumed she would grow out of it and mature into a more group-minded adult. Plus something told me she’d find a way to retaliate in force without the politeness of any sort of warning. By appearances she did mature behaviorally, but all of those selfish control freak impulses remain to this day, albeit more in secret. Turns out, all I’d ever taught her was that crime pays when you have targets who won’t retaliate in any kind of debilitating way.

    In hindsight, the worst treatment I got from any bad workplace managers came from those who believed I’d pull my punches if I ever actually retaliated. I assume that government leaders operate the same way. GWB knew that nobody’d touch him in any way that really hurt, if he ruined millions of Iraqi lives. Putin too, I assume. And all the war profiteers who’ve learned the wisdom of quietly pulling strings in secret, instead of loudly yanking chains in public.

  11. Rabbi Dov Zakheim's Remote Control Planes

    “Its biggest supporters were The Israel Lobby…”

    Laura, The Lobby crafted that bill around classified industry data they stole. As Grant says at the start of his article, “AIPAC and the Israeli Minister of Economics stole classified American industry data to aid passage of America’s worst bilateral trade deal.”

    This was around the same time Israeli spy Jonathan Pollard was arrested outside the Israeli embassy in possession of classified US national defense documents.

    There is a link here to US airport and public security in general, and to the events of 9/11 specifically. See, for instance, the Port Authority of New York and New Jersey privatization scheme. The Chairman of the Port Authority of New York and New Jersey on 9-11 was Lewis Eisenberg, he of Goldman Sachs and Kohlberg Kravis Roberts. KKR, incidentally, have a sizable stake in Bytedance, which owns Tik Tok. One of the two majority partners in Bytedance is also a former Goldman banker.

    Lewis Eisenberg authorized the lease transfer to Larry “We decided to pull it” Silverstein and Frank Lowy, he of the world’s largest mall operator at the time, Westfield America. Lowy is himself a terrorist who razed Palestinian towns and villages as part Hagannah and the Golani Brigade, and was close friends with known terrorists and co-conspirators Ehud Olmert, Ariel Sharon, Bibi Netanyahu, and Ehud Barak, among others.

    The story of ICTS directly relates to Grant Smith’s article and 9/11. Menachem Atzmon and Ezra Harel were the owners of International Consultants on Targeted Security (ICTS), which ran the security at the Boston and Newark airports as well as “all the international aviation gateways in the USA” according to its own website. ICTS was “affiliated” with Shin Bet, Mossad and Aman.

    There are too many names to mention, but billioanire cosmetics tycoon Ronald Lauder should also be mentioned here, as he was the chairman of NY governor George Pataki’s commission on privatization. He pushed for the privatization of the World Trade Center so that Israel could control it. Further, he was instrumental in the privatisation of the former Stewart Air Force Base. Interestingly, the flight paths of flight 175 and flight 11 converged directly over this airport.

    See also my screen name and his company, Systems Planning Corporation.

  12. Jorge

    Ian, this is a “Best Of”. Excellent!

  13. anon y'mouse

    “rules based order”

    we make the rules, you follow the orders.

    sorry, i’m just funnin’

    a bit tipsy this eve

  14. mago


  15. Jim Harmon

    The other day a rabbi stole my wallet, haw haw haw.

  16. Dan Lynch

    … it’s also cushioned by the fact that America is a continental power.

    What scares me is that America doesn’t actually make anything anymore. Almost everything I buy these days is imported. That’s a huge vulnerability.

  17. different clue

    ( trying again . . . )

    @ Dan Lynch,

    America still has a few made-in-America thingmakers which test the rule that ” America doesn’t actually make anything anymore”. They are not rich enough to advertise loudly but they can be found, often by accident, on obscure corners of the internet.

    Here are a few examples of things made in America for the garden/microfarm sector-

    And there are still small and tiny seed companies which grow their seeds in America.

    And for those things not made in America itself, there may still be alternatives from Europe, Japan, Taiwan rather than Slave Laborstan.

    As long as America is ruled by the Free Trade elite, it will not be possible to take America out of the Forced Free Trade System and build the Big Beautiful Wall of Protection around America which would make it possible for America to spend the next few decades restoring a balanced thing-making economy a few times smaller than the one we used to have . . . but still balanced and functional.

    And the only way to remove the Free Trade elite would be a violent uprising or revolution based on the successful rounding up and physical liquidation of every single person within America’s borders, both inside and outside of government, who supports the concept of Free Trade. If that thorough and systematic physical liquidation of each, all and every Free Trade supporter within America’s borders is not possible, then American recovery is not possible.

    So the only thing left to individuals is to find American and/or other Advanced World thingmakers and buy their versions of those things that we want and/or need. That will at least keep a relict stub of thing-making alive inside America against the possibility of better days at some future time.

    The other only thing left for individuals to do is to set up their own personal Survival Doomsteads if they can, and also find other like minded persons in their immediate or near-immediate area to set up Civic Survivalist Doomstead Lifeboat-Fortress Communities. Such persons and communities would find those few relict made-in-America tools and even machines to be very useful in their Doomstead Survivalist preparations for the future.

  18. different clue

    It occurs to me that a fully paid-for and fully developed Survivalist Doomstead could be the cash-poor survivalist’s version of ” fuck-you money”. It could be a ” fuck-you doomstead” , as it were.

    And a civid-survivalist lifeboat-fortress community could be a ” fuck-you lifeboat fortress” for everybody who makes it up, if it were well enough planned and built up and stealth-disguised to be invisible-in-place to those without eyes to see.

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