Date: 2024-07-17 Page is: DBtxt003.php txt00021301
Country
China
Democracy Now! ... Historian Alfred McCoy Predicts the U.S. Empire is Collapsing as China’s Power Grows
Original article: https://www.youtube.com/watch?v=HendU4zRg9A
Burgess COMMENTARY
The human potential of China is huge, as is the human potential of India. They both have very large populations and a very long history of social and cultural development.
While the Mediterranean countries also have long histories, Northern Europe only emerged in its modern form much later.
Many seem to be surprised at the rapid economic growth of China in the past 30 years, but this is very easy to explain. Since the late 19th century the United States had both a strong industrial economy and a strong agicultural economy which was broadly competitive with Europe. The USA grew because of the strong economy and migration from Europe ... not to mention, the forced migration of African slaves. Economic growth in the USA was financed in large part from Europe.
In the 20th century, America's economic power was enhanced by two world wars that did immense destruction in Europe but little economic damage in the USA. Germany lost its colonial empire after WWI and Britain and France lost empire after WWII. The USA became the dominant global economic power while the Soviet Union challenged the USA as a military (nuclear) adversary until it collapsed in 1990.
China was on the winning side of WWII, but was economically very poor. China embraced communism and in 1947 a revolution brought Mao Tse Tung to power.
In 1973 the OPEC oil shock dramatically changed global economics and substantially weakened the industrial foundation of the United States. Whereas Europe had high taxes on energy prior to 1973, the USA did not. Accordingly, the US operated on a basis of very low priced energy and was profligate in its use of energy for everything. When energy economics changed as they did in 1973, the US found itself at a profound disadvantage. Initially OPEC raised the price of crude oil from $3,50 a barrel to $13.50 a barrel, and the price increased again late in the 1970s to around $30.00 a barrel.
While the major oil exporting countries prior to 1973 were beneficiaries of the OPEC's cartel pricing, there were other important beneficiaries. I argue that without the aquiescence of these actors, the success of OPEC migh have been shortlived. These actors were first and foremost the major integrated oil majors ... Exxon, Mobil, Texaco, Shell, BP, Total, Elf, etc ... but there were also countries like the UK, the Netherlands and later Norway that were heaviliy invested in the development of North Sea oil which wpi;d never have been profitable at pre-OPEC price.
After the 1973 oil shock, the US economy went into free fall and would not recover for almost 10 years. During this period corporate profits tanked as did the stock market. By 1980 interest rates were above 20% per annum. US unemployment soared. It was only in the 1980s that business profits recovered mainly as a result of massive outsourcing of production to lower wage countries. Japan was an early beneficiary of this outsourcing, and then followed by South Korea and many other countries in Asia ... and to some extent Mexico. In the early 1990s China became the main beneficiary of US (and European) outsourcing and since then has grown its economy at a very rapid rate. By around 2020, the Chinese economy had grown to be about as large os that of the United States, but with a very different GDP makeup. China had a much bigger production component while the USA had a very large consumption component. Note that GDP is an awful metric and does not differentiate clearly between economic activity that is positive and that that is negative.
While the US is in a very rough patch, and its politics add to problem, the underlying potential of the USA remains huge. However, in order to realize the potential of the USA a lot of change is required at scale and soon. The TVM intiative to improve management metrics is a potential tool to enable this. More and more wealth being accumulated by a small part of the US population is not a solution to the economic competition between China -v- USA but is a big part of the reason why the USA is a deeply unhappy society.
Peter Burgess
67,043 views
Nov 16, 2021
932K subscribers
President Joe Biden’s virtual summit Monday with Chinese President Xi Jinping follows the two countries’ announcement just days earlier they will work together to confront the climate emergency after Xi did not attend the U.N. climate summit in Glasgow. Tension has been mounting between the two superpowers, especially over Taiwan and Hong Kong, with some speculating that a new Cold War is developing. “The United States, in the immediate future, is faced with the possibility of fighting a war over Taiwan … that it would probably lose,” says Alfred McCoy, professor of history at the University of Wisconsin-Madison in an extended interview about U.S.-China relations. “China is also working to break the U.S. geopolitical hold over the Eurasian landmass.” McCoy is a prolific author and his newest book is out today: “To Govern the Globe: World Orders and Catastrophic Change.”
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