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Tuesday, June 09, 2015

America's rise, China's decline

Will China rule the coming century? Perhaps. But we should always recall that, not so long ago, people were predicting that Japan would be the great nation. China is a rising power built on government investment, with outlandish building projects erupting even in modestly-sized towns. I'm not sure that this mad growth can be sustained.

On the other hand, the United States refuses to invest in itself. Our mad rush to devolve is definitely unsustainable. If there is a death struggle between Washington and China, don't bet on DC.

I'd like to introduce you to a couple of well-informed fellows who have much to say about the important topic of China's rise and America's possible fall: John Mearsheimer and Alfred W. McCoy.

The John Mearsheimer lecture embedded above (which he delivered in 2012) bears the ominous title "Why China Cannot Rise Peacefully." It's worth the investment of your time -- and the time will pass quickly, since Mearsheimer is a very compelling speaker.

Alfred W. McCoy's new piece also bears an ominous title: The Geopolitics of the US' Global Decline: Washington vs. China in the 21st Century. He takes us back to the foundational work of geopolitics -- "The Geographical Pivot of History," presented by Sir Halford Mackinder in 1904. (Mackinder inspired the work of Karl Haushofer, who advised Adolf Hitler.) This view sees all of history as a struggle to control the "world island," the land mass stretching from London to Tokyo.
As the fulcrum for Washington's strategic perimeter around the world island, the Persian Gulf region has for nearly 40 years been the site of constant American intervention, overt and covert. The 1979 revolution in Iran meant the loss of a keystone country in the arch of US power around the Gulf and left Washington struggling to rebuild its presence in the region. To that end, it would simultaneously back Saddam Hussein's Iraq in its war against revolutionary Iran and arm the most extreme of the Afghan mujahedeen against the Soviet occupation of Afghanistan.

It was in this context that Zbigniew Brzezinski, national security adviser to President Jimmy Carter, unleashed his strategy for the defeat of the Soviet Union with a sheer geopolitical agility still little understood even today. In 1979, Brzezinski, a déclassé Polish aristocrat uniquely attuned to his native continent's geopolitical realities, persuaded Carter to launch Operation Cyclone with massive funding that reached $500 million annually by the late 1980s. Its goal: to mobilize Muslim militants to attack the Soviet Union's soft Central Asian underbelly and drive a wedge of radical Islam deep into the Soviet heartland. It was to simultaneously inflict a demoralizing defeat on the Red Army in Afghanistan and cut Eastern Europe's "rimland" free from Moscow's orbit. "We didn't push the Russians to intervene [in Afghanistan]," Brzezinski said in 1998, explaining his geopolitical masterstroke in this Cold War edition of the Great Game, "but we knowingly increased the probability that they would... That secret operation was an excellent idea. Its effect was to draw the Russians into the Afghan trap."
I would argue that the Afghan trap ultimately trapped us. Right now, we are making the Brzezinski play again, using religious zealots (ISIS, Nusra) as a proxy army against the Shiite states allied with Russia. But we can't win this one, because we didn't really win the last one. Our proxies are too unstable, too uncontrollable, and the costs in blood and treasure are beyond our ability to sustain. If Russia cements a partnership with China, all of our current games will seem petty and ineffectual.
After decades of quiet preparation, Beijing has recently begun revealing its grand strategy for global power, move by careful move. Its two-step plan is designed to build a transcontinental infrastructure for the economic integration of the world island from within, while mobilizing military forces to surgically slice through Washington's encircling containment.
Indeed, in the last decade China has launched the world's largest burst of infrastructure investment, already a trillion dollars and counting, since Washington started the US Interstate Highway System back in the 1950s. The numbers for the rails and pipelines it's been building are mind numbing.
This is where I question McCoy. Is China's massive investment economically sustainable? China was hit hard by the 2008 crisis, as was the rest of the world, yet the economy kept zooming along. Why? Because the central bank kept pouring "funny money" into the system. China's audacious willingness to invest in itself is the sole factor propelling that nation to hyperpower status. 
At the same time, Beijing is developing plans to challenge Washington's dominion over space and cyberspace. It expects, for instance, to complete its own global satellite system by 2020, offering the first challenge to Washington's dominion over space since the US launched its system of 26 defense communication satellites back in 1967. Simultaneously, Beijing is building a formidable capacity for cyber warfare.

In a decade or two, should the need arise, China will be ready to surgically slice through Washington's continental encirclement at a few strategic points without having to confront the full global might of the US military, potentially rendering the vast American armada of carriers, cruisers, drones, fighters, and submarines redundant.
Compared to McCoy, Mearsheimer offers a rather less sweeping vision. He thinks that states are the principle actors of history, and that the ultimate goal of a great state should be to function as a regional hegemon, global hegemony being an impossible goal: "The globe is simply too big, and there's too much water." Two regional hegemons in the world will inevitably come into conflict; therefore (Mearsheimer implies) China and the U.S. will one day go to war with each other.

My take? I am not convinced by John Mearsheimer's theory, which rests on five primary assumptions. The two most important of these presumptions are:

1. There is no higher authority than the state.
2. States are rational actors devoted to insuring their own survival.

My response: These presumptions explain our history but not our future. I think that in today's world, there is a power which supercedes the state: Transnational capitalism. Money has no nation. Money sees the state the way an alcoholic sees a wine bottle: As a vessel to be drained dry.

We all know what happened to Russia after the fall of the Soviet Union. We all know that a great neo-liberal experiment transformed post-Saddam Iraq into a failed state. That is our future.

The most important and threatening development in the United States during the past twenty years has been the rise of obdurate libertarianism, an ideology dedicated to the transfer of power from governments to the great finance capitalists. This ideology has become a virus which infects every cell in our body politic. As a result, the U.S. refuses to invest in itself: Our infrastructure crumbles, our airports look ancient, our cities decay, our industry is nearly non-existent.

China, which retains a strong government, has the opposite problem. That country is addicted to investing in itself.

Although a state courts danger if it spends with wild abandon (as China is doing), a state which does not invest in itself at all can only dissipate. Financial capitalism, which Matt Taibbi famously pictured as a vampire squid, senses the weakness of the United States. The squid doesn't want to pump any more money into this nation. The squid seeks to take from the state what it can while it can, draining blood from the body for as long as the heart continues to pump.

I don't think there will be a war between China and the United States; I think that one of those powers will simply fade. And I cannot imagine what will replace it.
What makes money "funny money"? All money only has value because people believe it does and the government accepts it in payment of debts and taxes. After 2008 money evapourated, hence "quantitative easing" was the way, and the money is no more or less funny than any other. Using it for infrastructure is just a more efficient way to use it than bank bail-outs.

"too much water" isn't a problem. Water is a road. Water is the means of communication. Ancient civilisations spread over seas and along rivers. Too much land is the problem.

Transnational capitalism only has what the government lets it have, it can't overpower the government. In Russia the troubles were caused by governments adopting neoliberal policies, and pressure from the US government. In Iraq it was force applied by the USG. As a government all you need to overcome transnational capitalism is a calculator, brass balls and a hefty military.
... and a way to pay for your "hefty military."
If Cuba can afford it, who can't?
Stephen, I think you are right when you say that all money is basically an agreed-upon illusion. Even gold has value only because people think it has value. Nothing is true but thinking makes it so.

But I think you overvalue the potential power of governments to rein in transnational capitalism. Financial power controls the media, which controls the thinking of the people -- so where does the democratic revolution come from? Finance capitalism also buys the politicians.
I think what we are seeing is the age old problem of control by a political elite. In some ages, say under the Roman or British Empires, life could be quite good for many who were close to the political centre. But at the periphery (the colonies) there was abuse, slavery and death in order to sustain the illusion of a grand peace. The same could be said for Lenin and Stalin, the forced farm collectivizations and the Soviet Gulag camps.

I guess my point is that there is an illusion of popular inclusiveness, whether it be Pax Romana, the British Empire or the Workers Revolution when in reality a political elite steers narratives about inclusiveness, justice and national purpose which the people more or less accept as the natural order of things because challenging them is too difficult. The financial players join in according to their interests. The public narrative is tailored to suit this political elite. Where these players are large in number and systematically organized (such as Rome and Britain) the lurching ship of state can proceed for quite some time despite its imperfections and there are some self-correcting features within the elite circles. Where the political elite is amorphous and driven by self-interest (or where they have full police controls as in the Soviet or Nazi systems) then they have no commitment to the maintenance of overall social order and economic breakdowns or wars occur. In all of these systems the first response to crisis is to change the popular narrative to make the abnormal and threatening seem normal, even good. Only when the social and economic crises are too severe is the narrative abandoned along with the political elite. A new system arises, a new elite and a new narrative.

The key here is that the current US and corporatist elite are amorphous and answerable to no-one at a public level, not via the media or the ballot box. They'd like their political control to continue but they have no commitment to the health of the overall body politic. Hence they are driven to increasingly untenable political narratives in support of damaging policies such as Middle East wars, domestic surveillance, banker bailouts, quantitative easing, etc.

The current political elite are not acting in a grand conspiracy but rather as a coalition of overlapping self-interests, an elite which has no cognizance of or interest in the sustainability of the people as a whole or their supporting political framework. Expect more wars.
The current political elite are not acting in a grand conspiracy but rather as a coalition of overlapping self-interests, an elite which has no cognizance of or interest in the sustainability of the people as a whole or their supporting political framework. Expect more wars.
posted by Anonymous damien : 8:20 PM

This works foe me except china and Russia will not be sucked into war but let Amerika self destroy itself through the impossible thought of controlling other countries that will not tow the line of Amerika. Then again more are taking the chance daily. Sad

Finance capitalism doesn't have to control the media or the politicians. Here three of the five main broadcast channels are publicly owned. There's nothing new about any of this. From the Labour party's 1945 election manifesto:

" In the years that followed, the "hard-faced men" and their political friends kept control of the Government. They controlled the banks, the mines, the big industries, largely the press and the cinema. They controlled the means by which the people got their living. They controlled the ways by which most of the people learned about the world outside. This happened in all the big industrialised countries.

" Great economic blizzards swept the world in those years. The great inter-war slumps were not acts of God or of blind forces. They were the sure and certain result of the concentration of too much economic power in the hands of too few men. These men had only learned how to act in the interest of their own bureaucratically-run private monopolies which may be likened to totalitarian oligarchies within our democratic State. They had and they felt no responsibility to the nation. "

And that all ended happily.

damien is wrong.

The Roman Empire had slavery at its core as wel as its periphery.

The British Empire is the reason why we don't have slavery now.

Lenin's New Economic Plan decollectivised the farms collectivised by the Tsar.
My details were loose. My apologies.

Yes, Rome was stuffed with slaves but the wealth and political control came only from an empire that was ruled by oppression with those at the centre and in the power structure (based in Rome) generally having that power by virtue of oppression in the subjugated colonies.

Sure, Britain had an aversion to slavery in the 19th century. That didn't stop them brutally ruling and economically raping India for 400 years. They weren't exactly empowering the masses there, were they? Or how about the repression and exploitation in Kenya that lead to the Mau Mau uprisings? British profits for centuries were built on exploiting the resources and the peoples of their far flung empire.

Lenin's plan decollectivised the Tsar's farms. Ok, if you say so. And they all went on to work for themselves, did they? What did I hear about 30's, 40's and 50's and Soviet farm collectives? Did they happen or did I just imagine them?

The key point is that there are invariably colonies and masses exploited by a central elite, and local people in the wealthier centres get to share those benefits the closer they are to the controlling elite. The fictions of justice, the moral underpinnings and mechanics of society are set by the elite and managed in order to maintain political control. On this score I don't see how I am wrong.

The current political narratives (there are multiple memes involving terrorist, libertarian free markets and US-approved foreign regimes)are particularly insidious and hard to defeat. They empower the current political elite against their own domestic populations.
The Roman optimates oppressed their own people, they teamed up with collaborators in their various colonies. The replaced the democracy of Athens and the Aetolian Confederacy with oligarchy, and the oligarchs became Roman citizens. Tacitus talks about their attempts to co-opts native nobs by giving them Roman baths and other luxuries, and it worked. It wasn't really a geographical thing, it was a class thing.

Britain ran large parts of India for a couple of hundred years, certainly. Their first territories were trading settlements established under licence, which grew because they attracted natives by being good places for natives to live. They seized more power when attacked, the first main gain being Bengal, Orissa and Bihar (which even then had more people than the UK does today), seized after their native ruler had attacked the settlement at Calcutta and killed some Englishmen. The East India company was recognised as the legitimate government by the Mughal Emperor. The Mughals, who were themselves a foreign dynasty ruling as tyrants in India. Britain at least gave them parliamentary democracy, in time, and allowed the development of great native industrial empires like that of the Parsee family Tata. That's more than can be said of places Britain never conquered, such as China or Persia.

Lenin decollectivised the farms, which created a class of prosperous small-holders known as kulaks. The Tsars had actually started the programme by founding a land bank that allowed peasants to buy their own land, if they could afford the mortgage terms, but that never achieved much. Lenin's fine disregard for property rights allowed a rather more wholesale reform. Then Stalin seized power and killed every kulak he could find so he could collectivise everything under central control.

In short, it's no really that case that people in "imperialist" nations benefit from the empires, only the rich do. Roman Italy saw the Ager Publica destroyed and the yeoman farmers driven out of business, until Italy was almost entirely populated by slaves. Alexander the Great's Macedonia became depopulated. The British Empire was built to secure places to sell industrial manufactures, the whole point being to outcompete the French in India and the Germans during the Scramble for Africa. In the Soviet Empire the peasants on the collective farms were the Russians themselves. The Soviets consistently subsidised all the other nations in the Warsaw Pact.

Mersheimer may be Jim Willie said many times ,The US cannot stand letting the USD fall and be replaced by the Yuan+Yen+euro, if this happens USA cannot print anymore those QE fiat money to finance wars and imports Iphones from China
war is sole option
Not to quibble, but the USA would still be able to indulge in quantitative easing, as the UK and the Eurozone did this time. The iPhones are normally paid for with bonds (debt-backed money), not QE (which is faith-based money).
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