Americais a superpower. So what?
In 1989, after decades of small-scale conflicts and a policy of containment, the cold war was over. America had defeated the Soviet Union and a New World Order was declared. It was the prevailing assumption at the time that the ideals, values, and beliefs that America would champion would serve as a template for how the world was going to be run. Eastern Europe, Latin America, Africa, and Asia would all have transparent economic and political institutions, free trade agreements and cooperation would be the norm, and we would finally feed those hungry children. If you ask most Americans, we are still a superpower, and we are still spreading our ideals, values, and beliefs throughout the world. It was, in fact, President Bush's intention to "democratize the Middle East." This may be true, but so what? I would like to introduce a term that has been thrown around to describe China; regional superpower. It is my argument that America is a superpower. However, I think that power is being usurped by not one, not two, but multiple superpowers.
I would like to highlight three examples, China, Venezuela and Iran. All three can be considered powerful regional actors. All three have conflicted with the United States in the past in one or more categories: economically, socially, politically, or through their foreign policy. No one country can seriously think to challenge the United States, we are too big, have to much military capacity, and are too instrumental to the global economy. I think this is a bad thing though, and we are behaving like a lumbering giant. The mouse is irritating the elephant if you will. Because of the size and breadth of America's influence, the above-mentioned regional superpowers are gaining strength, developing their own niches, and competing with the U.S. in ways previously thought impossible
China is a fast becoming a small nuisance, admittedly a small nuisance with over a billion people. Economically, they steal our jobs. Our economy used to be seventy- percent manufacturing. It is now less then twenty-percent. A major reason for that is the rise of China as a major source for cheap labor. I recently read somewhere that Wall Mart, one of the biggest American Corporations, has seventy-percent of their distributions in China. Think of how many American jobs are lost as a result. Everything from textiles to car parts, to bras are made in China and that is hurting us. Granted, they are helping keep inflation low, but they also hold a ridiculous amount of our foreign debt. For someone who just spent six months in Europe, I can tell you what an affect that is having on our economy.
Secondly, China is hurting us through their foreign policy. After World War II, they were considered a major power, and thus were given a seat on the Security Council. Unfortunately, they have used the power of the veto to obstruct in a number of different ways. They have refused to capitulate on the U.S. attempts to bring any significant sanctions to Sudan. In the western part of Sudan, in a region called Darfur, there is a major genocide-taking place, and China has selfishly stood in the way. The reason being, China has significant oil interests there, and happens to have arms factories located within the country. In fact, China has also sold arms to Iran, Hezbollah, Russia, half of Africa, and various Latin American dictatorships.
Because of their economic might, China can afford to dabble a little in Asia. Our traditional alliances in the region, with countries like South Korea, Singapore, and India are now being threatened. With money comes power, and China is proving that more and more these days.
In Latin America, our biggest problem is Venezuela. Hugo Chavez is vehemently anti-American, and is un-afraid to tell us so. He is also sitting on the third or fourth largest proven oil reserves. While some of that money goes to helping his citizens, a large part of that money is spent trying to discredit the US in that region of the world. Through alliances with Bolivia, Peru, and other South American countries, he has tried to influence elections, intimidate countries from dealing with us, and generally raise hell.
Politically considered a populist, he has done much to undo a lot of the work we have done in the region to promote democracy. Many foreign policy experts compare him to Fidel Castro, and they are right, except for one difference: Castro was a puppet of the Soviet Union. He relied on Moscow for funding and ideological support, and generally has been minimized since their collapse. Chavez has no such problems. Venezuela provides him with ample money to spread his gospel, help like-minded politicians, and discourage trade with the United States. He recently met with the President of Iran, and has actively sought out those who wish us harm.
Economically Venezuela cannot compete with us. However, they contribute to the price of oil on the world market. In the past, Chavez has convinced other nations, most notably Bolivia, to nationalize their energy sectors, and has made it very difficult for foreign oil companies to operate within the country. In a speculative market, like oil, this can be devastating.
Iran is simultaneously becoming the biggest impediment to both peace in the Middle East, and nuclear proliferation. In the Middle East, through their support of Hezbollah and Syria, they have done great damage. Before the present conflict in Lebanon, Israel was pulling out of the West Bank and Gaza strip, and Lebanon was struggling to make a democracy work. And while both of these recent developments haven't been fully sabotaged, they have been dealt a fairly serious blow, thanks to Iran. It is no secret that they have supported Hezbollah for years, starting in 1982, but that support has recently threatened to destabilize the whole Middle East. The present conflict was long (30 plus days), deadly (over 1,000 deaths) and the whole world was watching. This has been nothing new for Iran, and they seem to relish being a thorn in the side of the west.
Ever since the Islamic revolution, Iran has been at the forefront of perpetuating violence and hatred against the west, and they have done a good job. Ultimately, their goal is to create a worldwide Islamic theocracy, and they have done everything they can to attack the goals, beliefs, values, and morals the United States has worked so hard to further. They have even been blamed for aiming foreign fighters in Iraq. Most notably those who slip in through Syria.
When they are not creating havoc in the Middle East, Iran has also enjoyed building up their nuclear program. They have continued to enrich Uranium, and have refused to abide by a deadline, which recently passed, to stop. A nuclear Iran would most likely signal world war three, and thus pose a great risk to the United States, Israel, and the rest of the west.
So, while the U.S. still has the biggest economy, strongest military, and can for all intensive purposes, be considered a superpower, I ask again……..what does that mean and who cares?
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Comments: 16
"China is a fast becoming a small nuisance, admittedly a small nuisance with over a billion people. Economically, they steal our jobs. Our economy used to be seventy- percent manufacturing. It is now less then twenty-percent. A major reason for that is the rise of China as a major source for cheap labor. I recently read somewhere that Wall Mart, one of the biggest American Corporations, has seventy-percent of their distributions in China. Think of how many American jobs are lost as a result. Everything from textiles to car parts, to bras are made in China and that is hurting us. Granted, they are helping keep inflation low, but they also hold a ridiculous amount of our foreign debt. For someone who just spent six months in Europe, I can tell you what an affect that is having on our economy."
Has our manufacturing really been battered by China? IMHO, NO!
This is the data I collected on this subject. U.S. manufacturing output rose 3.7%/year 1990-95, 5.7%/year 1995-2000, leveled off during the 2000 to 2002 recession and averaged 4.4% growth per annum 2003-2004. Manufacturing jobs have been shrinking since 1979 because labor-saving devices have greatly increased real output per worker. In 1992, Clinton and Gore claimed that U.S. manufacturing jobs were being exported to Japan and Germany. Yet U.S. exports rose 6% per year from 1990 to 2001, twice as fast as exports from Japan. From 1991-2004, Germany lost 25.8% of its manufacturing jobs and Japan lost 28.5%, making our loss of 20% seem almost small by comparison. In this same period, China lost 8.5 million manufacturing jobs, actually a larger percentage than our loss although I seem to have lost the actual percentage.
The U.S. is the largest exporter of goods in the world with a 9.6% share of merchandise in 2003 and about 18% of commercial services. China has a 5.8% share of products and 2% of services. U.S. exports to China have risen 25% per year for the last two years, an amazing increase.
Manufacturing jobs are disappearing everywhere for the same reason that agricultural jobs disappeared - it's called productivity. Each worker produces far more because of the application of technology. A few years ago, I sent my people to look at computer controlled machines to make parts from metal. They visited a plant where these machines were made. They viewed the production floor where there were tens of machines making parts of the machines they made and assembling them. There were no workers on the floor operating the machines, only machines cranking away in the process of making and assembling machines. That is the reason employment has gone down, in every country.
Best regards, Ben
Author "Leading People to be Highly Motivated and Committed"
Great article Andrew... Keep writing man.
I wonder how long after the start of the decline of Rome before Romans realized they were no longer a world leader? Did they see it coming? Do we?
Even I think we can still save this once we get rid of the Bush administration in two years. As long as we don't make the mistake of electing whoever they put up as the next candidate for the White House.
Who knows?
Ben Simonton made some excellent points about China. We are in the "information age" now - not manufacturing and not industrial. Countries who are just now capitalizing on manufacturing are still behind the curve, which is not to say they can't become a Superpower in their own right.
Venezuela is not going to be a problem (unless, possibly, the Project for the New American Century fulfills its NewWorld Order fantasy). Someone mentioned that Chavez cares less for the U.S. administration than it does for the U.S. and that's true. Chavez' disdain is more akin to GW's personal vendetta against the man who murdered his dad.
Another point I would like to bring up is that fact that these countries, mainly the countries that make up the Asian Tigers, are starting out dominating one aspect of the global supply chain, but individuals within these companies are now breaking off and starting their own companies. These ventures have been successful as the labor pool is massive in that area of the world.
I cannot refute your numbers; you have done some amazing research and have brought up an interesting point. The only part of your comment that I tend to disagree with, is what it means for the US. You cannot deny that we import more then we export to China, we have a massive trade debt and it is hurting us. We also need to rethink the way we are educating our children (I know I am still a child, but whatever) if we want to compete in this "flat world". Unfortunately, the United States has consistently cut funding for the National Science Association, funding for the arts, etc, and as a result, we are way behind the rest of the world in engineering, mathematics, and Science. This is something that needs to be addressed, and this is something that I believe China, India, South Korea, Singapore, etc have on us.
Off shoring and out sourcing is still a problem. When your biggest cooperation's feel the need to set up major factories in other countries, jobs will be lost. Look for example at GM. Have you ever been to parts of Detroit? When the three major car companies, GM, Ford, and Chrysler, started moving their operations elsewhere, certain areas were just decimated. The numbers don't lie, but the reality on the ground is a lot more ominous.
You are quite right about there being different economies in our states. Some are in great shape today and will be less so tomorrow for any number of conditions while others are not so great today but will be great tomorrow. Some of these conditions are free trade, incompetent companies, taxes, regulations, productivity increases, and the like.
For instance, the areas which have been flush for so many years because of high employment in the American car manufacturers are presently suffering because these companies must either cut costs or liquidate. In their present state they are unable to compete with foreign manufacturers who have considerably lower costs and better products. GM and Ford loaded themselves down with high employee compensation costs, both hourly pay and benefits, when little competition existed and now find themselves unable to meet the competition. The airlines are having the same problem. All are having to cut employee compensation, even to the extent of stopping defined benefit pension plans, and layoff employees as they lose sales to competitors.
But not to worry about the country. I don't know the exact numbers, but some have said that for every GM or Ford job we lose, foreign manufacturers employ just as many in plants they have opened here in the U.S.
The point here is that if workers and companies decide to make themselve uncompetitive, we have a corrective process in this country called the free market which serves to restore our competitive status. It is where we stop the free market from operating that we get into trouble.
Free trade allows those with a competitive advantage to become major suppliers in that business. In textiles, we had a large competitive advantage for many years but that has now changed. But you will note that our unemployment rate is very low and our job creation rate is well above that of every other industrialized country.
Off shoring and outsourcing are not problems and never have been. These are methods every company may need to use to change its cost structure.
Our real problems are a high tax structure for our companies which makes production in the U.S. more expensive and forces some companies to move production overseas. We also have prevented development of about 80% of our oil and natural gas resources with the predictable result that our natural gas prices are very high compared to many other countries. Since many companies are dependent on low cost natural gas, some of them are moving. There are many other ways that our federal government can influence our ability to compete and most of them have been used to convince our companies to base elsewhere. Just look at Sarbanes-Oxley to see another very negative, don't base in America, influence.
You mention education, Andrew, and that is certainly a major negative effect on companies. Trying to get people with the right skills or able to learn new ones is difficult. You correctly point out engineering, mathematics and science, but the cause is not lack of funding. It is our inability to change a very ineffective K-12 public school system. The existing teacher organizations have gained considerable political clout and with that have been able to prevent any significant change inspite of an unsatisfactory record of accomplishment. This has been, is and wil continue to be a major problem for business, another influence causing them to move facilities overseas.
So my concerns lie mainly in the arena of government controls, regulations and taxes.
Best regards, Ben
Author "Leading People to be Highly Motivated and Committed"
And there are plenty of jobs in the u.s. Alot of forigners move hear for a job or a better job(like mexicans which are sneaking in the u.s for that reason mostly.
Again, the free market will be our salvation from this dependence, when market forces make alternatives cheaper. Remember how high gas prices were last time they peaked, and how low they fell afterward. I look for a repeat of that effect, though not falling back to 10 bucks a barrel.
We have NOT been the best of neighbors to any number of countries: invading Canada in colonial times, invading Mexico, Panama, Nicaragua, and Cuba; subverting democratically elected governments in Chile, Venezuela, and elsewhere; and supporting the Nationalists in China's civil war (continuing to support the losing side decades later in Taipei), propping up a corrupt South Vietnamese regime that committed atrocities against its own people and interefering in the internal affairs of numerous countries.
The US needs to think long and hard about its actions and consider what impact they have. Many countries don't see us as good guys because we betray our Consitutional principles for any perceived convenience.