Like the tango says, for a person “life is but a breath and twenty years is nothing”. This is SO much truer in terms of history. Twenty years is nothing. Most of us will see it happen. For a nation twenty years is absolutely nothing.
It is also extremely simplistic to view the USA only as having overwhelming military force. That is an extremely small and isolated part of the picture. It also has an overwhelming deficit. And military force has its uses. Military force detracts funds from education, health and other desirable things. Military spending can bankrupt a nation and it has happened often in history when powers did not want to accept their diminished role. Like a family trying to keep up a lifestyle after they lost their jobs by usuing credit cards. For a while everything goes well and they can say “see? it can be done!”. Yes but one day the whole thing collapses and then they are much worse off than if they had prudently adapted.
Another point to bear in mind is that military force is, more and more, only a backup and is not a tool which can be used effectively to solve certain problems. America had all the power it needed but it was unable to prevail in Vietnam and it looks like Iraq is taking the same turn.
Thos who propose America keep being #1 by maintaining military superiority are commiting the same mistake as those who propose America keep industrial production: They are unwittingly trying to reverse the clock and take the world to the situation where it was 50 years ago. But that is not possible. The clock cannot be turned back. The only way to prosper is to adapt to new times not to try to keep things as they were.
The notion that America can get its way due to military superiority is just silly. It cannot possibly invade or destroy or even threaten with military force every country which does not follow American instructions. Look what happened in Iraq: most of the world sat on their hands making signs of disapproval and America got mired in a war it could not win.
I believe we will see within our lifetimes China’s economy surpassing that of the USA (which is neutral) and China throwing its military weight around in the region (which is bad but one can hardly blame them after the western powers have been doing the same for centuries).
Not the point. The fact is Japan was making junk for a long time. They eventually passed us up in quality and price. China is the same but things move faster now. We presented them with all the technology they needed to kick our asses. They did not have to beat us . They will soon enough though. Our short term financial policies will kill us . No one really plans the American economy.
I just do not understand why some people think only material things have value. What would you rather be given, a lollipop or a ticket to a movie? A can opener or a vacation in Europe? You think a vacation in Europe, a ticket to the opera, a haircut, cell phone service, broadband internet, cable TV, etc are worthless because they are services? That is plain stupid.
Japan didn’t have the things sandbagging them that China does. First off, Japan before WWII was an industrial economy comparable to other 1st world countries. Their economy and industrial base was destroyed to almost completion during WWII. Obviously when you rebuild that you aren’t going to jump straight into high quality innovative products.
There are numerous problems that China has to address today, and I’ll just mention a few. (1) All real estate is still owned by the state. People are limited to buying 99 year leases, and do not have ownership of their property. They, especially rural “owners” are limited in their ability to buy and sell property. In other words, they don’t have the ability to put a bunch of property together and open a farm. That limits growth, and keeps inefficiencies in the system. (2) There isn’t freedom of internal movement. It’s not like the states where you can pick up your family and move from NY to Chicago for a job. In China, you can work as a migrant worker, but you can’t relocate to a different city for a job. Obviously that poses problems in getting the right people in the right place for the right job. (3) Many of the large businesses are still state run monopolies. I don’t think this needs any further explanation why this is a problem.
Then you have extrajudicial killings, political instability, educational deficiencies, and several other problems endemic to the system. Before China becomes a 1st world economy, all of these will need to be addressed, and it doesn’t appear like they will anytime soon.
Right now, China’s GDP per capita puts them between Guatemala and the Dominican Republic. They are a backward country that lacks many of the fundamental aspects of modern economies. The only reason they are a concern is the sheer size of the country.
And yet all predictions put China’s economy ahead of the USA before 30 years. Do you believe they are all wrong?
You mention a bunch of things which may or may not be true up to a point but which are changing fast and which do not hinder progress as much as you may want to think.
http://www.industryweek.com/ReadArticle.aspx?ArticleID=16494 They may be wrong because it won’t take 30 years.
Their per capita income is pulled askew by millions of peasants with no hope or future, They have grown a middle class of 300 mill.,which is equiv. to our whole population, in 10 years. The trends are clear and unmistakable.
Japan started from nothing. China was given our manufacturing lock ,stock and intellectual property. We moved our base,trained their managers and made a fortune off the cheap labor,and weak environmental rules. They did not start making junk but stepped right into our shoes.
We have 15x the manufacturing that China has, according to that cite. How exactly do you reconcile that with the fact that we gave China “our manufacturing lock, stock and intellectual property”?
For me, the worrisome thing is mostly a house-of-cards economy.
To take an example from technology: many people write computer programs for a living. Some companies have products that make it easier for people to program. Other companies have products that make it easier to develop the products that make it easier for people to program, and so on.
Or, some companies make communication chips, other companies make products that make it easier to design the chips, other companies make it easier to develop the products that make it easier to design the chips, and so on.
The thing is, if there is a downturn in the economy, these “upper-tier” companies (that make products that make it easier to design products that make it easier to design other products) will find them selves making products that are not indispensable. They are sitting on a house of cards, and the smallest wind will blow them over.
Not sure how much of the economy is currently in this state, but it seems to me that the proportion of such companies is increasing with time, because more and more companies that I hear about are making products that are N steps removed from the final product that is sold to consumers in the market.
We did not move every single plant there, We gave them the ability to compete without having to go through the process that we and Japan did. A few years ago you could be arrested for giving a computer to China. Now our companies have put them right at the top of the pile. They have our technology because some people found a way to make a lot of money off doing that.
Some people think Communism and Capitalism are enemies that will eventually have a conflict. We could always say they could not compete with us is weaponry and war material. Now they can. Some see this as treasonous. I see it as another example of our systemic flaw, we do not think long term. Make money now and you are doing well. Thats good enough.
at least this is an issue that relates to the OP versus the sustainability of china’s growth. however, if this is the most worrisome issue, you must not be that worried. yes, these “services” are harder to assign a value to. You can’t just compile up supply, manufacturing, and labor costs, add on a desired rate of return, and come up with a cost for these services to estimate what the value of a computer program, an algorithm, or a haircut. The service itself has intrinsic value which is difficult to quantify. The price is almost soley relied on market forces and the final price is impossible to derive. This is why many would say the price is arbitrary and that the economy is a “house of cards.” However, most things are priced soley by market forces and we accept the value at face value, the most obvious of which is the Dollar. Ever since Nixon took us off the gold standard, the dollar just floats around valued at whatever people are willing to accept it as. Now you want to say that because of economic downturns, the service economy is at risk to be obsolete. How would a recession affect services and not goods? Less name brands, more generic brands. Less meat, more potatoes. Less luxury items in general. Is the manufacturing sector a house of cards as well as the service sector?
As for the superfluousness of a service versus the “degrees of separation from the final product” - each task added to a product contributes a “value added”. The farmer who grows the beef, the slaughterhouse that processes the meat, the distributor that ships the beef, and the retailer that sells the beef are all important to the meat market. The retailer is the final product. I’m not sure what you mean by degrees removed past the final product, there simply are none. In your computer chip analogy you have a chip designer, a chip programmer/manufacturer, a chip assembler, and a chip seller. Again, no steps past “final product.” unless you’re talking about tech support which i don’t think you are. Please, elaborate on the “n degrees of freedom” statement.