The American empire is now in essentially unstoppable decline. Certainly there are things that could be done to stop it, but they will not be done, much as the British had to avoid WWI and not take profits by sending industry to the US.
(This is the first article on the state of the world, as promised in last year’s fundraiser.)
Everyone knows about comparative advantage, but what doesn’t get talked about is absolute advantage. In absolute advantage you have something people need that they can only get from you.
This can be weapons. It can be jets. It can be advanced computers. It can be the capital equipment (like lithography machines used to create semiconductors) used to make other things. Sometimes it can be a resource, like oil.
The USSR was competitive with the America and its satrapies when it could still offer most of what other nations wanted. They could shop at the West store or the USSR store and get jets and weapons and dams and electrical networks and so on. By the 70s this had started to come apart, and in the 80s their failure at microcomputers was starting to really hurt, plus their domestic economy was in serious trouble.
So from somewhere in the late 70s to early 80s, and certainly after the collapse of the USSR, if you wanted jets, good weapons, computers, internet and so on, you had to go to the US and its allies: or rather, its satraps. There were American jets, or there were European (Airbus) jets, and so on.
Starting in the 80s, but really taking off in the 90s, China began to really industrialize in the standard way: start at the bottom of the chain and sell to the West. They moved up the chain very fast.
For example:
Huawei and ZTE are both Chinese.
The numbers above are worse than they look, because Huawei 5G is banned in much of the West. So really, Huawei is dominant in much of the developing world (the South.)
China now has a domestic jet industry. It isn’t quite up to snuff, but within ten years it will be. The latest Huawei phone, post sanctions, was made with domestic chips and outperforms Apple and Samsung on some important metrics.
So, let’s move to the important charts. The world in 1990, right after the collapse of the USSR.
The world in 2020:
China is more dominant than the US was in its prime. (Well maybe not in 1946.)
Now this sort of thing is a leading indicator. Countries who were dominant are able to control more of the world’s resources than they deserve for some time after they lose their dominance.
Be clear, the US has LOST its dominance already. It’s all over except for the shooting. It doesn’t look or feel like that because of generations of accumulation and because the dollar is used for most world trade.
But those are lagging indicators. Britain’s pound was the main instrument of trade for decades after the US had overtaken it industrially.
This time it’s going to happen faster, because the US has abused its central position in financial networks in ways other countries, like Russia and China won’t tolerate.
Now, understand clearly, Western prosperity is based on commanding more of the world’s resources because everyone had to get what they needed from the US and its satrap (well, and the whole imperialism and military thing, but that’s another article.)
Since China now offers almost everything the West does, at better terms, they will come to command those resources. It’s that simple, though that doesn’t mean the road will be smooth. This will be an Age of War and Revolution, and civilization collapse, especially as this isn’t a normal changeover because of climate change and ecological collapse.
Within the West we are already seeing the US cannibalizing its satrapies. Germany had to have cheap oil and natural gas to run its industry and European patents are lagging, badly. Europe’s garden will go, and go relatively quickly. The Chinese will dominate the EV market, eat Airbus and Boeing alive and bypass European control of the machines which make semiconductors.
The main industry the West seems to still have a dominant lead in is biotech, but the Chinese will get there.
Japan and South Korea will do better because both are keeping up in scientific innovation, but my bet is that South Korea will peel off into the Chinese sphere at some point, economically they already have. I’m less sure about Japan, but they’d be wise to do so.
As for Europe, well, for twenty years I’ve been warning them they had to regain their independence and forge their own path. Most of Eastern Europe should never have been allowed into the EU or NATO. The EU should have built its own army and left NATO. And yeah, they should have done everything necessary to keep good ties with Russia, which would have been easy, because until fairly recently Russia wanted to be a European nation.
They did none of this, their rate of scientific advancement is abysmal outside of a few areas and they’re toast.
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Curt Kastens
I especially agree with the last two paragraphs.
It seems that verything that the Europeans (European Leadership) should have done and did not do would have been easy to do. So I asked myself years ago, why are the Europeans not doing these things that they should be doing because they are in the obvious interest of Europe’s elites, and Europe’s common people. One assumption that I made in comming up with the answer that I came up with is that the European Leadeship is not bat crazy stupid. If your are not bat crazy stupid you would not make decisions that would be short term smart but medium and long term stupid. Maybe the assumption that European Elites are not bat crazy stupid was an incorrect assumption.
Be that as it may, the answer that I came up with many year ago, I can not remember exactly how long ago, is that the US secretly blackmails the leadership of Europe with nuclear annialation if they do not follow key US dictates. The bombs would not be launched from the US by US military personnel. But launched from Israel by Israeli military personnel. The implication of that is that the US put nukes in Israel not to bomb middle eastern countries which the US could deal with using conventional means, but to bomb Berlin, and Paris.
That may actually be the correct answer. But I think that i came up with that answer before I realized that it was to late to prevent human extinction this century due to the collapse of global industrial civilization due to environmental collapse and resource deplition. Well if the European elites understood what was going to happen long before I did that would also explain their complete disreguard for the long and medium term consequences of their decisions.
Europe is toast because we are all toast. I doubt if there is any reason to even on to higher education at this point for anyone alive. Those people who are not near retirment age will certianly never reach retirement age. It might not even make sense to go to grade school anymore. Except that we have to carry on some what normally so that those of tender age do not know what a temporary and useless situation they have been born in to.
I do look forward to your next installment. Because the assertion that the US no longer has the military might to maintain its empire seems plausible. But if this is the case there is to me an almost unphantomable implication if it is in fact the case. It would imply that the leadership of the US MIC is not only evil, it is also stupid. The resource, and technological, and economic advantages that the US MIC has had since WW 2 are so vast that to have lost its position of hegomony would require rank incompetence. Attempting to maintain an empire in the first place is a highly unethical decision. With all the tools at their disposal failure to maintain their pre eminant position would be a sign of complete stupidity.
But then again maybe these leaders to know longer had their heart in it once the understood that they were in a game that they could not win, they could not break even and they could not get out of. That might also explain the apparent lack of competence in guiding the policies of the government.
Another possible explination though is that things are not as bad for the US military industrial complex as many people think that they are. The leadership certianly seem eager to fight a 3 front war. They have access to a lot more information than we do. That of course does not mean that they know what to do with that information. It also does not mean that they can seperate the information chaff from the information wheat any better than any reader of this website can.
But it does mean that we should not write off the US empire. There are two ways that we can be sure that the US empire has come to an end. One is when all the US Generals, except those pardoned by the Russian, Chinese, Cuban, or Iranian militaries, and 99 Senators are given short trials and hung from the I94 bridge over the Potomac and burned alive. That is the most satisfying way we will know that the US empire has come to an end. The other way is when the US military simply distingrates because it can not be fed.
Sadly many of us would not live to see that day because we will run out of food before that day comes for the US military.
mago
The billionaire puppet masters will play their politician marionettes to create confusion and charged emotions over the Taiwan China “issue”, but “they” know where the money is and where true power lies.
The smoke machine billows 24/7.
Z
Yeah, I believe that part of the reason that the U.S. has nosed in so aggressively into the conflict in Palestine … which has turned into a savage Israeli butchery of thousands of Palestinian civilians, the majority of them women and children … is to try to toss their military weight around in order to position themselves to seize/steal energy resources in the Middle East (they’ve been thieving Syrian oil for years and recently have taken to seizing Iranian oil tankers as well and want to maintain those “privileges” and then-some) because the U.S. economy, and hence the dollar, is in such poor shape that they’re rapidly losing their power and leverage over the world. This is their way of attempting to maintain their financial influence: by seizing vital assets. If you have a surplus of something vital to other countries that they don’t own enough of, you can determine your price for it … and have it paid for in your currency.
This could end up being their final gambit though as they are potentially tossing the future of all of humanity into the poker pot in the process.
The Hamas attack on Israel, which Hamas obviously trained for but likely wasn’t scheduled for a particular date in order to preserve the element of surprise, was probably covertly given a go-date by Israel and I believe what heavily influenced the call was the strengthening of China and Syria’s relationship. Our rulers do not want China to gain a foothold of military presence in the Middle East and it wasn’t but a few weeks before the Hamas attack that Assad visited China for the first time since 2004. One of the reasons government officials physically meet face-to-face with other heads of state is to discuss matters that they wish to keep secret, such as plans for future military cooperation. As most here probably know, Russia already has military bases, and a naval port, in Syria on Assad’s invitation.
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At some point in the future, if we reach it, currencies are going to become so unstable or artificially inflated due to being heavily supported by their governments’ paper mills that there is probably going to have to be some sort of world financial reset that takes into account and sorts out the world’s debt imbalances. Otherwise, world trade will be heavily inhibited because the currency exchange rates will be so unstable. If I was the BRICS countries, I’d also want to totally dissolve the global derivative markets in those negotiations.
If and when there is some sort of reset, it will be the working class’s best opportunity to take civil and social action towards something truly transformative that they’ll never get through our rulers’ rigged obstacle course of a Congress or the production team of Weekend at Biden’s (or whomever bought-off, corrupt, traitorous clown our rulers impose on us who happens to be infesting the oval office at the time). What that potentially transformative, and revolutionary, action is is universal debt forgiveness for all personal debt except for real estate and vehicle debt.
The U.S. government is currently over $33 trillion in debt and that debt is heavily ramping up due to the higher interest rates that they have to pay out now to finance it. The debt will never be paid back and if there is some sort of agreement in which currency exchange adjustments are made to dissolve it, then U.S. citizens’ debt ought to logically be dissolved in that process as well.
Of course, our rulers are not going to want to free their subjects from the ball-and-chains of debt that they have fastened on us though, so it will have to be fought for in some manner.
Z
VietnamVet
These charts are striking. The USA went from having its own economic sphere to becoming a co-sphere of China. This is a reflection of the US economy becoming basically Apple Corporation and the left-behinds. Intel and Boeing; for example, who have so hemorrhaged value that they no longer can design or make breakthrough competitive products. This is the ultimate outcome of the triumph of individualism and greed and the evisceration of government so that it can no longer serve or protect its people.
Currently there are two hot regional wars (Ukraine and Gaza) and the mercenary militaries are playing chicken in the East Asia Seas. An armistice and a new Iron/Bamboo Curtain today would balance the multi-polar world with Europe and the North America having a third of the world’s petroleum and coal resources. But the West is leaderless and divorced from reality. A neo-aristocracy has arisen again that doesn’t give a damn for the unworthy. “Profit over Life.” As in WWI and WWII, Empires will fall, The longer the escalating WWIII continues, the worse the outcome. Human great apes faced extinction twice before with only around a thousand breeding pairs. This time the habitation of the earth itself is at stake.
StewartM
This, kiddies, is what happens to your society and economy when you let the rich run things, who tell themselves and have their acolytes loudly proclaim that they’re the smartest people in the room because they’re rich.
If proclaim that wealth is not correlated to knowledge or smarts but to greed, to unethical behavior, or just to plain dumb luck is to question capitalism. Because if they’re not smart and not talented and just greedy or lucky or crooks, then why should they control all that moola and direct firms?
GrimJim
One Possible Timeline…
Trump wins in 2024. Republicans take House and Senate.
First action is to withdraw from UN, NATO, and all other international treaties.
Second is to begin the Great Purge of all his enemies.
Third is to rubber stamp all the Christofascist laws coming out of Congress. With a compliant SCOTUS, that’s the end of the American Experiment (Democracy) and effectively the Republic.
Pr student for Life Trump revels in the show trials of his enemies. Prison camps for LGBTQIA to start, Democrats and such Socialists as they can find, followed by Muslims, Pagans, and so forth, eventually working their way down to Catholics and Mormons and non-Evangelical Protestants. Always need a scapegoat, you know.
Reduction of women to chattel, Blacks to slaves, expulsion of Hispanics and Asians and others. True Gilead-style works. This all coincides with their attempt to rebuild a collapsed economy.
Fracturing occurs when things can’t be fixed, or Trump’s death, whichever hits harder first. US balkanizes and turns into a patchwork of Christofascist petty states, China Warlord style.
Middle East turns into Mad Max irradiated Hellscape.
Europe collapses back into petty kingdoms.
Russia holds a Slavic empire for a while, being the last European power with any real resources. If the Brits could hold it together, they’d be a regional power again, but fail, as they have no energy left. Norway becomes the dominant North Sea power, taking control of the last major oil reserves.
The Med returns to the City State era, those lying too low near the coast fading quickly as sea levels rise. Desertifying no man’s lands in between.
China regains hegemony in the Far East, settles into a long decline as resources are spent keeping their breadbasket from flooding just to feed themselves.
India implodes, first in Hindu-Muslim warfare, then when the Muslims have been extirpated, Bharata fractures into petty warring states until everything returns to wasteland, jungles, or tribal territories.
South America and Africa simply fade back into darkness.
The periphery either drowns (islands and coasts), burns (Australia), or is inundated with refugees from elsewhere (Canada, Southeast Asia).
Ca. 2150 or so, there remain petty statelets and city states in relatively fertile areas of northern Russia, Scandinavia, North America, and China with technology ca. 1950s at best. Major swaths of the middle latitudes are not fit for human life (cf. Ballard’s Drowned World/The Drought). Barbarian and savage tribes in between. Another century or two and even that’s all wiped away, leaving maybe some groups of highly inbred hairless apes eking out a living along the coasts of the Arctic Ocean.
Fin.
Frank Shannon
Thanks Ian. It’s a good article.
I recommend one change though: “This time it’s going to happen faster, because the US has abused its central position in financial networks in ways other countries, like Russia and China won’t tolerate.”
It should be: This time it’s going to happen faster, because the US has abused its central position in financial networks in ways other countries, can’t tolerate.
None of the nations with any capability of independent action are able to leave their finances in the hands of an increasingly desperate hegemon who has no scruples about stealing. This can’t help but become increasingly apparent to everyone.
I think the reason European leaders can’t follow your advice is that they are being blackmailed by the CIA. Early in the Snowden revelations he said that one of the things that made him reconsider his loyalties was being ordered to create blackmail materiel for a minor European official. (a banker IIRC)
Jan Wiklund
A sure sign of decadence is that the western leadership do so stupid things.
They believed that they could control the world if they dictated “a free world market” – but the only ones that profited from it were the Chinese. European and American businesses used it to “outsource” their industrial capacity and content themselves with milking the profits, applauded by their politicians. But once they had handed out the control, the profits were gone and the power too.
And now they try to use the big stick. Without any big stick to use, as far as I understand. They promised Ukraine to lend it, but they didn’t have anyting to lend.
Tallifer
The American and European economies definitely have many problems. However, they are publicized and known by all the actors in business, government and academia, who in turn struggle to come up with solutions. On the other hand, the Chinese and other dictatorships sweep their problems under the rug of paranoia to maintain the regime, so they cannot deal with their problems. (see numerous articles in the Economist)
Here is a good podcast which talks about Chinese economics: https://www.thebulwark.com/podcast-episode/chinas-two-sets-of-books/
Feral Finster
The West still has a few advantages.
1. A globe-spanning navy. China is basically trapped inside the South China Sea. The US Navy can roam pretty much any ocean at will.
2. The US dollar and control of most financial assets. The only real alternative at this time is the Euro, and nothing gives a European greater delight than being permitted to lovingly fellate his American Master.
3. Soft power. For better or worse, the United States in particular and the West in general still have enormous reserves of soft power, although they insist on squandering it.
To give a few examples – Russian oligarchs crave plaudits from American cultural institutions. Even if the Russian collects, say, African art, getting approval from the Kenyan Ministry of Culture probably doesn’t count for nearly as much as a London museum. A Uruguayan mogul shows off by buying a trophy property in London, not in Karachi or Hong Kong. Chinese bigwigs want their kids to boast degrees from Stanford or Yale, not New Delhi. Pretty much everyone around the world wants their kids educated to speak English as a second language or even a first.
Feral Finster
@ Frank Shannon “I think the reason European leaders can’t follow your advice is that they are being blackmailed by the CIA. Early in the Snowden revelations he said that one of the things that made him reconsider his loyalties was being ordered to create blackmail materiel for a minor European official. (a banker IIRC)”
It think it’s more than blackmail – it’s cognitive capture. Among the European political class, questioning American hegemony is a faux pas on the level of standing up to interrupt a High Papal Mass to demand that the person who just farted please identify himself.
You Just Don’t Do That, and Europeans, if they are nothing else, they are all about The Done Thing.
Willy
@GrimJim,
Last year I put an empty bowl on the front porch with a note in it that said: “Please take only one!!”, turned off all the lights and hid in the basement. Yet still they kept knocking.
This year nobody came. Maybe our kids is learning.
I envision a colony of scientists hiding in a large basement with lights turned low, wearing something like a stillsuit except also containing a tiny air conditioning/personal entertainment device which is also powered by muscle action. Bait bowls placed outside colony entrances attract the occasional devolved chud who are then trapped and harvested for their bodily fluids.
But you may ask, what could possibly have funded such an elaborate post-apocalyptic operation?
The billionaires did. Street gangs of angry scientists devised ways to get past their robotic defenses (EMP guns) and subsequent steampunk devices (clever missiles) to conquer these billionaire heir bunkers and turn them into scientific survival colonies. It is from these places where humanity shall emerge anew, giving hope to a tired species.
mago
Please.
No one is seeking solutions, only justification for their actions and ideologies.
Toxicity and aggression prevails.
Reason and considered understanding?
Please.
That’s for losers.
We’ll see.
Won’t we?
Curt Kastens
Mago,
Not that it matters, but to be percise, No one in any position of signicant power is seeking any kind of solution to any serious problem. Have they decided that there are no solutions to seek? Or have they never even though about possible solutions in the first place because they are only thinking about justifications that will allow them to get away with crimes? I can also imgaine that the first led to the second.
different clue
Who and how many people rule the world? I don’t know. I know it is not very many.
I will be poetic and call them the Golden Million. Or the Diamond Million or the Platinum Million if one prefers.
They have already decided that they wish to exterminate the rest of us from existence, but slowly enough and through multiple plausibly deniable causes that it can be made to look like an accident. Or a series of accidents.
What they plan is to keep current trends moving and accelerating to the Vast Democide target they have planned for us and to be in deep hiding in their bunkers and retreats ( Thiel in New Zealand, the Bushes on their 200.000 acre ranch in Paraguay, etc.) Their plan is that when we are all safely dead, and not stinking up their view any more, that they will come out of hiding and inherit the Earth, all to themselves. No one else but them. And their paid servants who will re-terraform the Earth to their liking.
I am too squishy soft and weak to do violence myself. But I would not be upset if there were some quiet secret-vengeance armies and groups from among the rest of us who are determined to survive long enough to kill every one of the Golden Million when they emerge from their bunkers or other places of deep hiding. I hope that not a single Golden Million person is permitted to survive the the Greatest Holocaust of All Time which they have planned for the rest of us.
And one hopes that some Alpaca herders around Lake Titicaca, some Pigmies in the Ituri Rain Forest, and some other more worthy and deserving representatives of Species Human are able to survive and guide their descendants in a better human direction for a better humanity.
Curt Kastens
Different Clue,
I do not think that is the plan of the golden million. They would know that if that were their plan it does not have any chance at all of success. The only land based living thing that has a chance of surving the comming extinction is lichens, and maybe a few small plants that can survive near cave entrances. If the Golden Million think that they will survive they are fools on a fools errand.
different clue
@Curt Kastens,
It wouldn’t be the first time fools went on a fools errand.
Curt Kastens
Different Clue,
No it wouldn’t.