Just in the last few days I have encountered articles proposing that Presidents Xi of China and Putin of Russia are strategic geniuses setting their countries up for global domination.
The Chinese one was from "Spengler," or David P. Goldman. He thinks that the Trump tariff threats are a strategic error because the Chinese economy is much stronger than Trump's advisors (and also supply-sider Art Laffer) think. Anyway China is in the midst of an economic transition at the end of which it will rule the world.
OK, now let's look at Russia, where Andrei Martyanov thinks that Putin is the second Pyotr Stolypin. Stolypin was Prime Minister of Russia in the aftermath of the failed 1905 Revolution.
But I think this is all rubbish.
Look, I think it is great that Russia and China are serious about playing catchup. This chart from usgovernmentspending.com shows what they need to do on the GDP front.
This chart shows that Russia, China, and India are all playing catchup with the West and Japan. So yeah, they should all be copying what we are doing and becoming global, trading nations that live by trade rather than political domination.
But then what? That is where the strategic mindset fails. For it assumes that power is everything, and that the wise ruler should have a long-term power plan going out to the near horizon.
Frankly, I doubt that.
Put it this way. The US, you might notice, is on the top of the heap, GDP-wise. Did the US come up with a magnificent strategy 100 years ago about how to rule the world? Hardly. We just stumbled and bumbled along, as usual, making it up as we went along. And along the way we were the leaders in a number of technological revolutions, from electricity to air transport to computers and the internet. All completely unforeseen by the smart set. So it is probably a good thing that our ruling class didn't have a clue, because sure as can be, whatever grand strategy we might have formulated in 1900 or 1950 would have been useless in 2020.
OK, so we did have a grand strategy from 1950 to 1990, to "contain" communism. And it worked.
Moreover, the grand strategists are usually backward looking, trying to keep the existing regime going, and usually making a mess of it. Think of the German and Russian and Austrian emperors that bumbled into World War I and crumbled into dust, giving us the Great Reaction that featured Bolshevism and Fascism. Think of Hitler's grand strategy of blood and soil. Think of Mao ZeDong's strategy of cultural revolution.
Right now, for instance, in the United States, the ruling class is transfixed with the idea of erasing the guilt of colonialism and racism and the age-old subjection of women. Is this a brilliant idea or a Great Reaction into a neo-oppressive politics that subjects the entire population to the latest wizard wheezes of intersectional crazies? My belief is that the current ruling-class obsessions have nothing to do with the case. It is all just the posturing of rich kids, churned out by our elite finishing schools, that have been educated in useless mush.
No wait. When you think about it, the ruling class is doing the sensible thing. By filling young elite heads full of mush they are making sure that the little geniuses never have an original thought in their heads and thus never think how the whole ruling class ideology sucks from head to tail.
Look. Of course Russia and China need to play catch-up. And they need to stay out of trouble and let the market breed peace and prosperity, and lead their people out of the country into the city and then socialize them to the market economy.
But as to what happens after that, let's be clear. Nobody has a clue. If Russia and China look to emulating the US so they can become world hegemons in their turn, I have this to say to them.
When you guys reach up to US levels of GDP, meaning that your intangible capital reaches to 80 percent of total capital just like it is here, then the game will have changed.
I hope that the US will have stumbled onto the right road by that time, in accordance with Bismarck's dictum that there is a "special providence for drunkards, fools, and the United States of America."
But you never know.
The Chinese one was from "Spengler," or David P. Goldman. He thinks that the Trump tariff threats are a strategic error because the Chinese economy is much stronger than Trump's advisors (and also supply-sider Art Laffer) think. Anyway China is in the midst of an economic transition at the end of which it will rule the world.
Deng Xiaoping began a convulsive transformation in 1979, launching the largest migration in world history, a movement of 550 million from countryside to city – two Americas, or the whole of Europe from the Urals to the Orkneys. Xi Jinping is presiding over another convulsive transformation, from a smokestack-and-export economy to a high-value-added, consumption-focused economy.In the first transition "Thousands of years of custom, habit and history have been uprooted in a single generation, and China has created a new people." In the second:
China is engaged in a second transformation, from a country of industrial workers one generation removed from the farm, to an economy led by technology and services. And the Chinese propose to accomplish this in a single generation, while shifting a great deal of their industrial operations to cheap-labor venues from Turkey to Malaysia. That is part of the object of the One Belt/One Road initiative.Well, yeah. Maybe. Or maybe the top-down my-way-or-the-highway ideology isn't that well adapted to the creation of a creative market-driven economy of "technology and services." Maybe the folks left behind, like the white working class in the US, will rebel at being catapulted into the 22nd century.
OK, now let's look at Russia, where Andrei Martyanov thinks that Putin is the second Pyotr Stolypin. Stolypin was Prime Minister of Russia in the aftermath of the failed 1905 Revolution.
[Stolypin's] strategic dictum was simple to grasp: “Give Russia 20 years of internal and external peace and quiet and it will change beyond recognition.” Vladimir Putin and his team follow this dictum to the letter.And the major objective of this, then and now, is to be a world-class military power. China seems to agree too, as they build a blue-water navy.
But I think this is all rubbish.
Look, I think it is great that Russia and China are serious about playing catchup. This chart from usgovernmentspending.com shows what they need to do on the GDP front.
This chart shows that Russia, China, and India are all playing catchup with the West and Japan. So yeah, they should all be copying what we are doing and becoming global, trading nations that live by trade rather than political domination.
But then what? That is where the strategic mindset fails. For it assumes that power is everything, and that the wise ruler should have a long-term power plan going out to the near horizon.
Frankly, I doubt that.
Put it this way. The US, you might notice, is on the top of the heap, GDP-wise. Did the US come up with a magnificent strategy 100 years ago about how to rule the world? Hardly. We just stumbled and bumbled along, as usual, making it up as we went along. And along the way we were the leaders in a number of technological revolutions, from electricity to air transport to computers and the internet. All completely unforeseen by the smart set. So it is probably a good thing that our ruling class didn't have a clue, because sure as can be, whatever grand strategy we might have formulated in 1900 or 1950 would have been useless in 2020.
OK, so we did have a grand strategy from 1950 to 1990, to "contain" communism. And it worked.
Moreover, the grand strategists are usually backward looking, trying to keep the existing regime going, and usually making a mess of it. Think of the German and Russian and Austrian emperors that bumbled into World War I and crumbled into dust, giving us the Great Reaction that featured Bolshevism and Fascism. Think of Hitler's grand strategy of blood and soil. Think of Mao ZeDong's strategy of cultural revolution.
Right now, for instance, in the United States, the ruling class is transfixed with the idea of erasing the guilt of colonialism and racism and the age-old subjection of women. Is this a brilliant idea or a Great Reaction into a neo-oppressive politics that subjects the entire population to the latest wizard wheezes of intersectional crazies? My belief is that the current ruling-class obsessions have nothing to do with the case. It is all just the posturing of rich kids, churned out by our elite finishing schools, that have been educated in useless mush.
No wait. When you think about it, the ruling class is doing the sensible thing. By filling young elite heads full of mush they are making sure that the little geniuses never have an original thought in their heads and thus never think how the whole ruling class ideology sucks from head to tail.
Look. Of course Russia and China need to play catch-up. And they need to stay out of trouble and let the market breed peace and prosperity, and lead their people out of the country into the city and then socialize them to the market economy.
But as to what happens after that, let's be clear. Nobody has a clue. If Russia and China look to emulating the US so they can become world hegemons in their turn, I have this to say to them.
When you guys reach up to US levels of GDP, meaning that your intangible capital reaches to 80 percent of total capital just like it is here, then the game will have changed.
I hope that the US will have stumbled onto the right road by that time, in accordance with Bismarck's dictum that there is a "special providence for drunkards, fools, and the United States of America."
But you never know.
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