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A shifting of global power - the changing of the guard

By James Cumes - posted Thursday, 12 April 2007


In America’s Suicidal Statecraft I have told the story of more than 30 years of flawed economic and financial policies that have driven the United States into steep self-destructive decline - with a withering of its political and strategic power as well as its economic strength.

The flawed economic and financial policies have transformed the United States from the most productive economy and largest creditor in history, with high and rising living standards for its people, into the world’s largest debtor, with massive trade and budget deficits, its people and environment neglected, its foreign relations lacking vision or enlightenment. Public, corporate and household debt is immense.

Except for an ultra-rich few, living standards of the American people have stalled or fallen, their savings have turned negative and a crushing burden of household debt has turned the American dream into a nightmare of trying to survive. Phoney official statistics give a misleading picture of economic growth and employment, of inflation and production, of real investment and productivity, of wealth based on asset-price inflation and of income from sliding wages and welfare.

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About 37 million people live in poverty. About 40 million have no health insurance. Speculation and a fast-buck culture have destroyed much of the great American heritage. United States industry has been drained away. Manufacture has been gutted - and its most skilled and highly paid jobs have been lost. Trade unions have lost their power. Democratic representation of the everyday American has largely disappeared.

The country’s armed forces, even excluding most of the huge costs of the wars in Afghanistan and Iraq, cost half a trillion dollars a year - more than all other major countries put together - and American capacity to maintain them constantly erodes.

At the same time, its policies have built up, at a speed and on a scale that is historically unprecedented, the economic strength and, with it, the political and strategic clout of its rivals in the superpower stakes.

In short, the world’s single superpower is well along the road to self-destruction. Unless the United States can change its policies quickly and fundamentally, the American hegemony will be over and a dangerous struggle will ensue to determine on whose shoulders the superpower mantle should now rest.

Those countries that have followed an economic and financial model contrary to the American - a model that emphasises real investment, enhanced productivity and higher production are the countries to which power will continue to flow.

In America’s Suicidal Statecraft I have described the problems that confront the United States and other countries which have followed the American economic and financial model. I have also proposed the lines along which, even at this late stage, we might find a way to establish an environment dedicated to stable, sustainable economic growth and peaceful global change.

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One of many unfortunate features of United States policies over a period that can now be measured in decades is that so many other countries have, in more or less degree, followed the American economic and financial model.

Historically, the American record of achievement has been formidable, so much so that it is understandable that the United States should have great influence in determining the policies of other countries.

However, those countries - and especially those which regard themselves as close traditional allies of the United States - should be able to see when policies, even of their best friends, are going wrong and should have the courage to offer sober, well-based criticism.

Unfortunately, this has not happened in the last 40 years.

We should recall Toynbee's warning, "Civilisations die from suicide, not by murder".

Although it is hard to believe that those who formulated and implemented United States policies ever had any such intention, United States administrations could hardly have set out on a course of self-destruction more effectively than in recent decades.

Equally, it is hard to believe that such countries as Britain, Canada, Australia and New Zealand ever had any intention to be accessories to American suicidal tendencies. Nor did they ever intend to self-destruct themselves. But they have done or are doing both.

It is not too late to take another course. The awesome potential of the United States in every field of human endeavour is still there. It can be revived.

Perhaps we might look back to the decade that followed the Great Crash of the New York Stock Exchange in 1929. During that period, the United States was on its knees, millions of its people unemployed and poverty-stricken, its industry seeming to be grinding to a complete halt.

But the United States revived to demonstrate its power not only in war but also in its unequalled capacity to handle the post-war challenge from 1945 to 1969.

So we can imagine a United States again as great in its moral as well as its material leadership around the world.

However, we must also make a distinction between the world as it was in the 1930s and the world as it is today.

In the 1930s, there was hardly a country anywhere in the world that was not suffering the most intense economic and social distress and that was not threatened with political and strategic turmoil.

Now the situation is very different. United States policies have not only been self-destructive but they have also been constructive to an unprecedented extent and at unprecedented speed in the development of other countries which might now reasonably be expected soon to sit at the top table of global power and influence, and possibly assume the mantle of leadership that the United States has worn in the past.

The unprecedented development at unprecedented speed of several economies which were lagging behind prior to 1969 and especially before 1980, is of course something to be welcomed in many ways. It is the sort of peaceful change that, in and by itself, should always be one of our primary goals.

But in assessing all progress and all gains, we must also tally the costs.

If the United States, now apparently so far down the road towards self-destruction, really does collapse economically, financially, politically and strategically, then we will be confronted with a global situation of terrifying instability and enormous risk. This would be not just another shift in the balance of global power at a pace which has been historically the norm, but a shift of such magnitude and abruptness that the end result cannot be even guessed at, let alone foreseen with any precision.

We can see the underlying plates of global power already shifting, rather like the early tremors of a major earthquake. The tremors might still be contained but much, if not most, would seem for the moment to depend on those to whom power is shifting. If their concept of desirable change is peaceful, then a world which has armed itself to the teeth with the most formidable weapons of all time, might yet survive.

However, that would seem to be our only chance. Perhaps they will conceive, design and create an environment for peaceful change of the kind that was our goal at the end of World War II. But it will still be vital that the United States and those who have modelled themselves on the United States in their economic and financial policies in the last three or four decades, should see the wisdom of this change in direction and join actively in creating that peaceful environment.

At the moment, the prospects for such a re-direction of United States policy seem meagre, whether under the present administration or its potential successor from early 2009. The prospects for such a re-direction seem almost equally meagre in the "Anglo-Saxon" countries which have modelled themselves on the United States. The Europeans might be rather more positively promising; but that promise is so far a mumble when it needs to be a roar.

As the Chinese are reputed to say, "We live in interesting times". Right now, they themselves are moving into a position in which it will be the Chinese people and its governance which will have perhaps a major or even dominating influence on how the key word "interesting" comes to be defined. Others in South and East Asia and, for example, in Latin America and central Asia, as well as Russia, are likely to help determine the accent in which "interesting" is heard and its intent propagated.

Indeed, the signs are there that such a process has already begun.

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America's Suicidal Statecraft is available most readily through Amazon, at $26.99 a copy.



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About the Author

James Cumes is a former Australian ambassador and author of America's Suicidal Statecraft: The Self-Destruction of a Superpower (2006).

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