"US military primacy has underwritten America’s world position since the Soviet capitulation. But dominance is not hegemony. Hegemony is the willingness of other powers to follow your lead. The underlying strength of the American world position is due to the scale and dynamism of American civilization. With the exception of a few hermit kingdoms and revolutions masquerading as states, all the world’s nations, even our adversaries, want access to the world’s largest consumer product markets; to the deepest financial markets in the world; to our technology, skills, and know-how; to our cultural innovations. All these advantages are ultimately based on American economic preeminence. Through the American century, all nations on the planet have looked with envy at our living standards; itself a reflection of the great productivity of American civilization."
Speaking of squandering, the US and the West still enjoy great reserves of soft power, which they insist on squandering.
Thank you for thoughtful essay, but I disagree with you on two points:
1. Rational foreign policy is always hostage of the Home Front. You can advocate for it, but demanding democrats adopt unpopular foreign policy, you just increase chances of Trump win, which is self-defeating.
2. The reason why tariffs are more popular among manual workers is that there is really simple explanation how they would benefit. If there are high tariffs on cars, all cars on the streets in U.S. would be made in U.S. which would translates into more mfg jobs. If we compare it with your reasoning why free trade is better, your reasoning is much harder to communicate to layman and also ducks the question of relative economic status. At least for me, it's unclear if workers would be happier in E.U. which is poorer but the gap between them and white-collars employees is much smaller.
The proposed recommendations amount to an acceptance, that US primacy has come to an end. I have a feeling this is much too bitter a pill to swallow - for the generation of senior policymakers who rose into positions of responsibility in the 1980s, and 1990s.
The "run harder" element, while of course the sane thing to do, is also the most radical departure from the existing state of affairs. On so many levels, the US economy is set up to do the opposite. From education (we rely on importing talent), to industry (where did those other 4.5 million jobs go besides the 500k attributed to China?), to technology (in trying to get to leading edge of computing, in the rate-limiting "hard parts", ie not software and not commercialization, China doesn't actually compete with US nearly as much as with globally exposed players like Taiwan, Japan, and Korea).
The observation about US having to compete not only with China, but also with allies like Korea is particularly keen. The currently existing doctrine has an answer for this, and it's not pretty. Ask today's industrial leaders in Germany. This is the likely default future path. There's good money to be made holding back the tide, and such is a readily available method to do it - for a time at least.
Biophysical reality dictates we can only build and maintain solar energy harvesting infrastructure - that has a 20-30 year life span - with fossil fuels, which are rapidly depleting.
This means at best a "green reindustrialization" and "the energy transition" is only possible for far fewer than ~8 billion humans - and even if you did that with the least pain and suffering, it would only last for a few decades - because fossil fuels are rapidly depleting.
Fossil fuel depletion is measured by the 'Energy Returned on Energy Invested' (EROI) of fossil fuels, which is decreasing. The EROI for the production of oil and gas globally by publicly traded companies has declined from 30:1 in 1995 to about 18:1 in 2006 (Gagnon et al., 2009). The EROI for discovering oil and gas in the US has decreased from more than 1000:1 in 1919 to 5:1 in the 2010s, and for production from about 25:1 in the 1970s to approximately 10:1 in 2007 (Guilford et al., 2011). Alternatives to traditional fossil fuels such as tar sands and oil shale (Lambert et al., 2012) deliver a lower EROI, having a mean EROI of 4:1 (n of 4 from 4 publications) and 7:1 (n of 15 from 15 publication). In 2013 world oil and gas had a mean EROI of about 20:1
This essay is 'energy blind' rendering it's discourse deeply misleading.
For example "More precisely, the long-term competition between the United States and China is about productivity growth. The side that sustains greater dynamism will prevail."
But since we live on a finite planet, this is obviously wrong: the "long-term competition" between all of us is back down the resources bell curve, led by fossil fuel depletion in handful of decades. You can't mine minerals needed for a "green reindustrialization" and "the energy transition" without diesel due to its ~40 times higher energy density than batteries, which are close their maximum density the laws of physics dictates.
Geo Political analysis without this back drop of biophysical reality leads nowhere. Below I give more references and discussion on exactly why electricity cannot build machines that collect and use electricity, meanwhile please read these very insightful researchers / authors.
Well written, but regarding the disparity in military spending, one must make more adjustments than just a ppp adjustment, for example, when including ALL pay and benefits, not just salaries and pensions but also the GI Bill and veterans health which exposes the US military's budget to the US's preposterously expensive health care and education industries, well, the US military is spending a bit more than half its budgets on pay and benefits whereas the PLA is like20%. Then if you start getting into the expenses of the US military's global presence, you lose more alot more. And even the basic ppp adjustment needs to me modified heavily because of the industrial ppp diff for some stuff being do much larger, for example, they can build ships *faaaaaar* cheaper than we can (and much faster too).
An especially thoughtful essay, any politician or regulator involved with China should read this. You sum up security, economic and foreign policies concerns very well here.
Savings rates seem to correlate with cultural vertical discipline, other things being equal. Probably due to greater social cohesion / less need for individual consumer expression and a tendency to take a longer-term view. So countries like Germany (Authoritarian Family, in Todd's framework) and China (Exogamous Community Family) tend to have higher savings rates than Nuclear Family nations like the US, UK (Absolute) or France (Egalitarian).
Hard to counter these habits of mind without fairly radical policy measures.
You've covered all the bases. We're doomed anyway. Two niggles:
1. "China’s balance sheet recession means that its growth may be tempered for some time”. China's economy will grow more this year than in any but two years in history. There is no recession, balance sheet or otherwise.
2. "Exposure to the world market ignited a productivity miracle in China”.
Mao ignited a productivity miracle, says Maurice Meisner: "From 1957 to 1975 (a period held in low esteem by Mao's successors), even taking into account the economic disasters of the Great Leap, China's national income increased by 63% on a per capita basis during this period of rapid population growth, more than doubling overall.
* In Germany the rate of economic growth 1880-1914 was 33% per decade.
* In Japan from 1874-1929 the rate of increase per decade was 43%.
* The Soviet Union over the period 1928-58 achieved a decadal increase of 54%.
* In China over the years 1952-72 the decadal rate was 64%".
A brilliant essay. Much food for thought. Thank you.
"US military primacy has underwritten America’s world position since the Soviet capitulation. But dominance is not hegemony. Hegemony is the willingness of other powers to follow your lead. The underlying strength of the American world position is due to the scale and dynamism of American civilization. With the exception of a few hermit kingdoms and revolutions masquerading as states, all the world’s nations, even our adversaries, want access to the world’s largest consumer product markets; to the deepest financial markets in the world; to our technology, skills, and know-how; to our cultural innovations. All these advantages are ultimately based on American economic preeminence. Through the American century, all nations on the planet have looked with envy at our living standards; itself a reflection of the great productivity of American civilization."
Speaking of squandering, the US and the West still enjoy great reserves of soft power, which they insist on squandering.
Thank you for thoughtful essay, but I disagree with you on two points:
1. Rational foreign policy is always hostage of the Home Front. You can advocate for it, but demanding democrats adopt unpopular foreign policy, you just increase chances of Trump win, which is self-defeating.
2. The reason why tariffs are more popular among manual workers is that there is really simple explanation how they would benefit. If there are high tariffs on cars, all cars on the streets in U.S. would be made in U.S. which would translates into more mfg jobs. If we compare it with your reasoning why free trade is better, your reasoning is much harder to communicate to layman and also ducks the question of relative economic status. At least for me, it's unclear if workers would be happier in E.U. which is poorer but the gap between them and white-collars employees is much smaller.
Thanks for the detailed and thoughtful article.
The proposed recommendations amount to an acceptance, that US primacy has come to an end. I have a feeling this is much too bitter a pill to swallow - for the generation of senior policymakers who rose into positions of responsibility in the 1980s, and 1990s.
The "run harder" element, while of course the sane thing to do, is also the most radical departure from the existing state of affairs. On so many levels, the US economy is set up to do the opposite. From education (we rely on importing talent), to industry (where did those other 4.5 million jobs go besides the 500k attributed to China?), to technology (in trying to get to leading edge of computing, in the rate-limiting "hard parts", ie not software and not commercialization, China doesn't actually compete with US nearly as much as with globally exposed players like Taiwan, Japan, and Korea).
The observation about US having to compete not only with China, but also with allies like Korea is particularly keen. The currently existing doctrine has an answer for this, and it's not pretty. Ask today's industrial leaders in Germany. This is the likely default future path. There's good money to be made holding back the tide, and such is a readily available method to do it - for a time at least.
Biophysical reality dictates we can only build and maintain solar energy harvesting infrastructure - that has a 20-30 year life span - with fossil fuels, which are rapidly depleting.
This means at best a "green reindustrialization" and "the energy transition" is only possible for far fewer than ~8 billion humans - and even if you did that with the least pain and suffering, it would only last for a few decades - because fossil fuels are rapidly depleting.
Fossil fuel depletion is measured by the 'Energy Returned on Energy Invested' (EROI) of fossil fuels, which is decreasing. The EROI for the production of oil and gas globally by publicly traded companies has declined from 30:1 in 1995 to about 18:1 in 2006 (Gagnon et al., 2009). The EROI for discovering oil and gas in the US has decreased from more than 1000:1 in 1919 to 5:1 in the 2010s, and for production from about 25:1 in the 1970s to approximately 10:1 in 2007 (Guilford et al., 2011). Alternatives to traditional fossil fuels such as tar sands and oil shale (Lambert et al., 2012) deliver a lower EROI, having a mean EROI of 4:1 (n of 4 from 4 publications) and 7:1 (n of 15 from 15 publication). In 2013 world oil and gas had a mean EROI of about 20:1
https://www.sciencedirect.com/science/article/pii/S0301421513003856#s0020
This essay is 'energy blind' rendering it's discourse deeply misleading.
For example "More precisely, the long-term competition between the United States and China is about productivity growth. The side that sustains greater dynamism will prevail."
But since we live on a finite planet, this is obviously wrong: the "long-term competition" between all of us is back down the resources bell curve, led by fossil fuel depletion in handful of decades. You can't mine minerals needed for a "green reindustrialization" and "the energy transition" without diesel due to its ~40 times higher energy density than batteries, which are close their maximum density the laws of physics dictates.
Geo Political analysis without this back drop of biophysical reality leads nowhere. Below I give more references and discussion on exactly why electricity cannot build machines that collect and use electricity, meanwhile please read these very insightful researchers / authors.
https://surplusenergyeconomics.wordpress.com/2023/11/10/265-explore-and-explain/
https://dothemath.ucsd.edu/2023/09/can-modernity-last/
Well written, but regarding the disparity in military spending, one must make more adjustments than just a ppp adjustment, for example, when including ALL pay and benefits, not just salaries and pensions but also the GI Bill and veterans health which exposes the US military's budget to the US's preposterously expensive health care and education industries, well, the US military is spending a bit more than half its budgets on pay and benefits whereas the PLA is like20%. Then if you start getting into the expenses of the US military's global presence, you lose more alot more. And even the basic ppp adjustment needs to me modified heavily because of the industrial ppp diff for some stuff being do much larger, for example, they can build ships *faaaaaar* cheaper than we can (and much faster too).
An especially thoughtful essay, any politician or regulator involved with China should read this. You sum up security, economic and foreign policies concerns very well here.
Great article!
Savings rates seem to correlate with cultural vertical discipline, other things being equal. Probably due to greater social cohesion / less need for individual consumer expression and a tendency to take a longer-term view. So countries like Germany (Authoritarian Family, in Todd's framework) and China (Exogamous Community Family) tend to have higher savings rates than Nuclear Family nations like the US, UK (Absolute) or France (Egalitarian).
Hard to counter these habits of mind without fairly radical policy measures.
You've covered all the bases. We're doomed anyway. Two niggles:
1. "China’s balance sheet recession means that its growth may be tempered for some time”. China's economy will grow more this year than in any but two years in history. There is no recession, balance sheet or otherwise.
2. "Exposure to the world market ignited a productivity miracle in China”.
Mao ignited a productivity miracle, says Maurice Meisner: "From 1957 to 1975 (a period held in low esteem by Mao's successors), even taking into account the economic disasters of the Great Leap, China's national income increased by 63% on a per capita basis during this period of rapid population growth, more than doubling overall.
* In Germany the rate of economic growth 1880-1914 was 33% per decade.
* In Japan from 1874-1929 the rate of increase per decade was 43%.
* The Soviet Union over the period 1928-58 achieved a decadal increase of 54%.
* In China over the years 1952-72 the decadal rate was 64%".