America's Decline?

You knew it had to be coming. As our economy continued to weaken, and in the aftermath of the War in Iraq, the envy of the world would be turned against us.

Pravda is the latest to try to take its shots at the US. One of their writers, Anton Golovin, has written an article in which he almost gleefully predicts the downfall of the US as a world superpower. He derides our victory in Iraq as being the fault of corrupt Iraqi officials and a need for the US to secure, essentially, tribute instead of loans.

The author fails to recognize two relevant points though.

One, everyone can copy us and narrow the gaps in economic efficiency, but when they copy they will never surpass us. Our nation is set up to reward inquiry and innovation. Most other nations are not. In order to actually surpass us they would have to leapfrog us in some way - and their systems (economic and political) don't sufficiently reward those kind of innovative efforts. So the likelihood of someone coming up with an innovation to put them ahead of the US is unlikely.

Second, with the exception of China, demographics are working against the other major "threats" of the EU and Russia. Both the EU and Russia are saddled with aging populations and heavily socialistic states. These nations, rather than being a threat to us, are on the verge of implosion. Their populations simply cannot support the social structure that has been imposed by the rampant spread of socialism since the end of WWII.

The US will also be coming up on a similar demographic problem, but we don't have quite the socialist social structure of the EU and Russia. We will strain our social fabric to the breaking point, but the problem is not as deep and the structure not as onerous as to cause a European style implosion.

And what about China? What's going to happen when their economy surpasses that of ours?

Not much. China's economy, measured on a per-capita basis, will still be tiny. And the composition of their economy isn't all too hot either. They do very, very well with manufacturing cheap, disposable consumer goods. Their getting better at the high tech end also, but they aren't anywhere near as innovative or efficient as the US.

Where they really fall down, as does most of the world, is in the very low tech, boring realm of food production. The US (and Canada) still feeds the world. It is only through our ability to produce copious quantities of food that the rest of the world can even begin to concentrate on the other parts of their economy. Other nations pay subsidies to encourage farmers to grow more food; we pay subsidies to encourage farmers to not grow anything.

If everyone stopped importing oil to us, it would severely hamper our economy, no doubt about it (it would also crush everyone else’s economies as well so it wouldn't be too bright). But we would figure out how to rebuild our national energy system to work without the massive supply of cheap oil. We'd use more coal and much more in the way of nuclear energy. But we would figure it out. That's the American spirit.

But what happens if our food exports stop? China, Russia and Europe have to make major reallocations of labor to try to feed themselves.

Which means that the US still holds the cards in the end. Even if China surpasses us in terms of absolute economic size, we will still hold the most economic influence of any nation simply because we can dictate major disruptive shifts in the economies of others.

I've noticed several articles coming out from people who are green with envy and who are looking for any American weakness to exploit as a salve for their own wounded egos.

Just remember, it's not a good idea to write off and dismiss as weak the United States of America.