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Freeloader
08 Feb 10,, 01:48
I was reading "Theodore Rex" - the autobiography of Theodore Roosevelt, and came across this passage in the book

"For several years, both he (Roosevelt) and the world had been aware that the United States was the most energetic of nations. She had long ben the most richly endowed. The first year of the new century found her worth twenty five billion more than her greatest rival, Great Britain, with a GNP twice that or Germany or Russia. The United States was so enriched with goods that she as the most self sustaining nation in history."

then it continues

"Wall Street was awash with with foreign capital. It was estimated that America could buy the entire United Kingdom, and settle their national debt. New York City seemed destined to replace London as the world's financial center"

The interesting note is that it was us, the United States, who surpassed and replaced the previous world Superpower, England. One hundred years later and some of the same elements can be slowly seen emerging from the United States-China relations as we go further and further into debt, while they (To be fair, Japan lends us a significant amount of money too) become our personal bank. Within 50 years, the takeover was complete and we we clearly overtook England.

Are we witnessing the beginnings of the same thing, this time our own replacement? This is a common question and discussion to be sure, but I found the quotes interesting and the timing eerily familiar. Events like the decision to discontinue the space race, watching our national debt grow and grow, and falling behind for renewable energy are worrisome.

Now, England obviously allowed themselves to fall from the top gracefully and did not go to war with us over the issue. Do you believe we would, in the event it did happen, be as willing to simply "step aside" per se? What steps must we take first and foremost in order to stall this slight faltering we are going through? What areas must we resolve or strengthen first in order to preserve democracy throughout the world and remain the world Superpower? I realize China has a lot of obstacles to work through themselves, but we did too in 1900's (Civil Rights movement, poverty to name a few) and that didn't stop us on the world stage.

Where would you start if you could choose?

JAD_333
08 Feb 10,, 04:08
Are we witnessing the beginnings of the same thing, this time our own replacement?

Not necessarily. If history is our guide, a new superpower will replace the US someday. But not for some time. If statistics are a guide, economically the US is already #2, behind the EU, but we know very well that this is aggregation of 28 otherwise sovereign states using a common currency.

GDP in trillions $$
— European Union 18,387,785[4]
1 United States 14,441,425
2 Japan 4,910,692
3 China 4,327,448h
4 Germany 3,673,105

China is still a distant 3rd to the US. Japan which grew by leaps and bounds throughout the 1960-70s slowed percentage wise, but still exceeds China. Both were/are heavily dependent on US markets.

Percentage growth is always high for a country emerging from undeveloped status because it is starting from a low point. That is China is today.

Thus, it would take 8% per percent in dollar growth in China's economy to equal 2-3 percent for the US (2008 figures).

Even if China grew at the rate of 25% of its 2008 GDP every year it would take 10 years for it to catch up with the US. That is, if the US stood still.

China is not the US's banker it would seem to be. It holds around $800 billion in US debt. Japan is close behind. Total US debt stands at around $10
trillion, or 10 times what China holds.

US debt is estimated to grow to 101% of GDP by 2011 or $14 trillion before decreasing. Our economic woes are to blame, not China. When our financial institutions are stabilized, stimulus spending is no longer needed, and industry regains it previous pace, then we'll see better how China stacks up to the US.


Now, England obviously allowed themselves to fall from the top gracefully and did not go to war with us over the issue. Do you believe we would, in the event it did happen, be as willing to simply "step aside" per se?

Americans are proud of being number 1 in the world economy. Were they to lose their position, I suspect they would accept it, albeit grudgingly. But "step aside" is not how I would characterize it. We're not going to bow out of the game, if that is what you mean. On the other hand, being number 1 always is not a goal I would consider worthy of pursing for its own sake. War simply to remain on top is out of the question.


What steps must we take first and foremost in order to stall this slight faltering we are going through?

Strengthen our capital markets; create effective financial controls; keep business taxes low as possible; negotiate effective international copyright and patent protections for intellectual property; innovate, innovate...



What areas must we resolve or strengthen first in order to preserve democracy throughout the world and remain the world Superpower?

Democracy is not worldwide. I believe we should do what we've always done, with occasional lapses, and that is to encourage democracy where it does not exist without imposing it and to serve as an example of it in action. Democracy helped makes the US a superpower; it ought to serve the US well in remaining so, whether we are the strongest or among the strongest superpowers.

Bigfella
08 Feb 10,, 07:47
Now, England obviously allowed themselves to fall from the top gracefully and did not go to war with us over the issue.

Just a point on this, don't assume that because Britain didn't go to war with the US that its slide from no.1 was 'graceful'. Both world wars, and especially the first, were tied up with heading off potential threats to British power. The tremendous financial & human cost of these wars dramatically accellerated the fall of the UK for near top to distinctly second rank. If you look at Britain from the 40s to the mid-60s there are a string of less than graceful attempts to maintain 'great power' status. Take such lessons as you will from this.

Stan187
08 Feb 10,, 14:10
Well, from what I've read in power transitions literature, it is said that the United States surpassed Britain in the 1890s. However, the surpassing challenger in this case is not a state dissatisfied with the world order. Instead it takes over and enforces many of the same Anglo-established norms.

The US not dissatisfied with British system in 1890 when they surpass them in industrial productions capacity. In fact, the US was satisfied with the British even in 1918 in running things in terms of enforcement, only with a new challengers to the world order (Soviets) did the Americans have to take the mantle from the British to keep the neo-liberal shape and institutions of the international system.

Freeloader
10 Feb 10,, 05:26
Even if China grew at the rate of 25% of its 2008 GDP every year it would take 10 years for it to catch up with the US. That is, if the US stood still.

China is not the US's banker it would seem to be. It holds around $800 billion in US debt. Japan is close behind. Total US debt stands at around $10
trillion, or 10 times what China holds.

While it's true that our debt is largely completely unrelated to China, I still feel uncomfortable knowing they hold as much as they do. Furthermore, that percent is a number that is expected to grow I would imagine. Hopefully not by much, but it always depends who is calling the shots at the time. I do not believe President Obama focuses very much on the US-China financial relations.


US debt is estimated to grow to 101% of GDP by 2011 or $14 trillion before decreasing.

Decrease? Due to what, anything particular?



Democracy is not worldwide. I believe we should do what we've always done, with occasional lapses, and that is to encourage democracy where it does not exist without imposing it and to serve as an example of it in action. Democracy helped makes the US a superpower; it ought to serve the US well in remaining so, whether we are the strongest or among the strongest superpowers.

I agree with this, and many other parts you stated I didn't comment on. The part I worry about, is if we are NOT the top dog, then it puts another country, and another style of government, on display as "the best" per se. Assuming it was China, then people would se ea Communistic style as the "way to rise to the top" in a manner of speaking. Which is really unfortunate.

Freeloader
10 Feb 10,, 05:32
Just a point on this, don't assume that because Britain didn't go to war with the US that its slide from no.1 was 'graceful'. Both world wars, and especially the first, were tied up with heading off potential threats to British power. The tremendous financial & human cost of these wars dramatically accelerated the fall of the UK for near top to distinctly second rank. If you look at Britain from the 40s to the mid-60s there are a string of less than graceful attempts to maintain 'great power' status. Take such lessons as you will from this.

Well yes Germany twice attempted to rise to power, and both times directly and indirectly challenged England greatly. I think part of why England fell was also due to the fact they simply lacked a sizeable army to enforce their ways and/or control others which has dictated many other empires in the past. You certainly do not see many countries with a smaller army, threatening people with a larger one (common sense I know) and England simply was dwarfed in time - financially and militarily. I see a similar trend falling the United States on at least one of those fronts, (albeit slowly, but still)

No England did not fall "gracefully" but they did not provoke war with Germany either time, nor with us. Thus why I called it "graceful" but I see your point.

JAD_333
10 Feb 10,, 07:31
While it's true that our debt is largely completely unrelated to China, I still feel uncomfortable knowing they hold as much as they do.

It may give you small comfort to know that China regards our debt (bonds) as an investment in a major trading partner. China is betting, wisely I believe, that the US will emerge from the current economic downturn as strong as ever and their exports will benefit as a result. It's strictly business.




Decrease? Due to what, anything particular?

Remember, it's the ratio we're speaking of. Any change in debt (spending) or GDP affects the ratio.

We're currently spending our way out of an economic crisis: bailing out banks, supporting AIG, GM, Chrysler, Fannie Mae, etc. and running a stimulus program. When that stops, debt will level off.

And when GDP returns to 2006-7 levels, the ratio will change for the better. The dollar amount of debt is meaningless. It's the ratio to earnings that matters.




The part I worry about, is if we are NOT the top dog, then it puts another country, and another style of government, on display as "the best" per se. Assuming it was China, then people would se ea Communistic style as the "way to rise to the top" in a manner of speaking. Which is really unfortunate.

Well, it's nice to be number 1. Just ask any Saints fan. But more to the point, number 1 means more than dollars on a chart. There's military might; there's quality of life; and many other measures.

You needn't worry that communism will get credit for China's growth. It stagnated for years under a command economy. Only when it turned to capitalism, did it bloom economically.

Keep in mind that China's population is nearly one billion more than ours. It stands to reason that when all those people become consumers like us
its GDP may exceed ours. I am not going to lose any sleep over it. :)

Bigfella
10 Feb 10,, 08:51
[QUOTE]Well yes Germany twice attempted to rise to power, and both times directly and indirectly challenged England greatly. I think part of why England fell was also due to the fact they simply lacked a sizeable army to enforce their ways and/or control others which has dictated many other empires in the past. You certainly do not see many countries with a smaller army, threatening people with a larger one (common sense I know) and England simply was dwarfed in time - financially and militarily. I see a similar trend falling the United States on at least one of those fronts, (albeit slowly, but still)

I guess it depends how you look at it. I would argue along 2 lines.

1) Britain actually did have a large army, it is just that most of it was spread all over the world policing a huge empire only made possible by an even more powerful navy. What Britain didn't have was a large standing army within its own borders or the sort of plans to create one that the continental powers did. In the end it was the need to maintain these armies in the field for 4 years & other war related costs that crippled all the major European powers. Britain actually got off more lightly than most.

2) It could be argued that the fact that Britain didn't have to maintain large standing armies compared to nations on the continent made a contribution to its rise to the top of the great power tree. It has been speculated that the difficulty in invading Britain (except by other British nations) made centralized royal power & armies less important, making it easier to maintain a more democratic form of government. It is argued that this, in turn, contributed to the success & creativity of the the British economy. While this might be a bit tenuous, a clearer argument might be that spending less on an Army allowed for a larger navy, which became the skeleton & muscles of the empire that pushed Britain to the top.

As for smaller & larger armies, I can list a huge number of examples where a nation with the smaller but better trained/equipped/luckier army triumphed.


No England did not fall "gracefully" but they did not provoke war with Germany either time, nor with us. Thus why I called it "graceful" but I see your point.

Thanks for conceding the point. A fine example of 'grace'.:)

It probably depends on how you choose to define 'provoked', especially in the case of WW1. In both cases (and esp. WW1) Britain invited itself to conflicts it could have avoided in order to maintain a particular balance on the Continent. Neither conflict was strictly 'necessary', though the decisions in both cases were entirely understandable. Britain was chose to keep down a rising power it saw as a potential threat. It succeeded, but at great cost.

Old World Order
10 Feb 10,, 09:05
Of course the US is declining. It's a zero sum game, and the US has been declining since the end of World War II. The world is increasingly becoming multipolar as opposed to unipolar. This isn't really a problem for the US, per se, as unipolar systems are the most unstable structures in international relations. Now, obviously, when you are the sole rule-maker you'd like to stay in that position, but it's not likely to last very long in the current climate, so it's all about setting yourself up for the 'new world order' (its original definition, not the conspiracist definition).

Shek
10 Feb 10,, 13:44
While it's true that our debt is largely completely unrelated to China, I still feel uncomfortable knowing they hold as much as they do.

Freeloader, we have the $$$, they have the paper that says IOU. Unlike personal debt, where someone comes and takes your stuff and gives it to creditors, there is no world court with enforcement power to do the same to the United States. Given that, who's in the position of power here?

Now, to default on the debt would be stupid, as it'd shoot the credibility of the dollar and harm our interests, but we don't even need that threat to maintain leverage over the Chinese. Instead, it's a situation similar to the recent financial crisis, where the banks were bailed out because they were too big to fail. Likewise, the Chinese see us as too big to fail, and so they did the same thing, which is buy the dollar to maintain its value.

As the saying goes, if you owe someone a little, they own you. If you owe them a lot, you own them.

Shek
10 Feb 10,, 13:53
Of course the US is declining. It's a zero sum game, and the US has been declining since the end of World War II. The world is increasingly becoming multipolar as opposed to unipolar. This isn't really a problem for the US, per se, as unipolar systems are the most unstable structures in international relations. Now, obviously, when you are the sole rule-maker you'd like to stay in that position, but it's not likely to last very long in the current climate, so it's all about setting yourself up for the 'new world order' (its original definition, not the conspiracist definition).

It's not a zero sum game. Look at the world economically today and compare it to the 1890s when the last major power transition occurred. Who would like to roll back the economic/technology clock and live at those standards? I'd submit very few, because it's a positive sum game. Thus, while nations may wish to be relatively powerful (zero sum), they still have to consider their absolute power and standards of living (positive sum if played correctly, negative sum if botched).

To a certain degree, it's in our interests to see China grow more powerful. As their economic interests from an absolute perspective become more and more dependent upon the global commons, the more defense dollars they'll have to spend to maintain access to the global commons, which if we play the positive sum game, we'll have to spend less on defense as China takes on their proper role in maintaining that access. That means money can be freed up for other uses (less spending, domestic priorities, etc.).

However, if you play it as a zero sum game, then you create an arms race that has a self-fulfilling prophecy tendency and sets up a negative sum outcome possibility.

Lastly, your statement that the US has been in decline since the end of WWII is simply incorrect. Whether by economic statistics (remove the artificiality of depressed output in the war ravaged countries), by economic power (who's the world's reserve currency? and where did people run to during the financial crisis?), by military power, or by your construct (if unipolar to multipolar is weakening, and it's a zero sum game, then bipolar to unipolar means you got stronger).

Old World Order
10 Feb 10,, 18:39
After World War II, the US was responsible for nearly half of the world's GDP. It's been consistently losing ground there since. And a world with limited resources will always been zero sum by its nature.

gunnut
10 Feb 10,, 19:30
After World War II, the US was responsible for nearly half of the world's GDP. It's been consistently losing ground there since. And a world with limited resources will always been zero sum by its nature.

Your definition of zero sum appears to be in terms of percentage. In that case, yes, it's a zero sum game because 100% is 100%. But 100% today is a whole lot more than 100% 50 years ago.

How come no one worries about China losing steam in development? Everyone is worried about the US slowing down or being surpassed by China. But no one ever wonders if China will all of a sudden slows down.:confused:

Shek
10 Feb 10,, 20:08
After World War II, the US was responsible for nearly half of the world's GDP. It's been consistently losing ground there since. And a world with limited resources will always been zero sum by its nature.

1. Your choice of start dates suffers from selection bias since you're comparing against a war ravaged Europe/Asia. Once you adjust for the catch up effect of Western Europe/Asia recovering from the war, the US' share of world GDP has remained remarkable stable. Rather than "consistently losing ground," we have maintained our relative economic power, while enjoying the bountiful fruits of the positive sum game of trade that has increased our real income (and in turn, consumption) 6.5x since the end of WWII or 3x since 1969, which is the start date of my graph below.
2. You're denying positive sum games, which is fundamentally flawed and denies reality.
3. I see that you've also ignored your earlier logic error, which by your construction, means that the US increased its power since WWII.

http://4.bp.blogspot.com/_otfwl2zc6Qc/SwWyuy39ikI/AAAAAAAAL8g/Cp4XVVbTmqY/s400/worldgdp.jpg

highsea
10 Feb 10,, 22:00
We're currently spending our way out of an economic crisis: bailing out banks, supporting AIG, GM, Chrysler, Fannie Mae, etc. and running a stimulus program. When that stops, debt will level off.CBO estimates show deficits at trillion plus for a few years, then a decrease, then a climb again. But always deficits, so debt won't level off. The low spot is 2013 at $538 Billion, then back up to $722 Billion by 2019.

And when GDP returns to 2006-7 levels, the ratio will change for the better. The dollar amount of debt is meaningless. It's the ratio to earnings that matters.$21.4 Trillion total debt in 2020 is the CBO baseline number based on the 2010 budget request. That's pretty close to the 100% of GDP even if we do manage the rosy growth Obama's OMB predicts.

Excluding the trust funds (which net out to large deficits every year) the publicly held debt goes from ~$7.5 Trillion in 2009 to ~$15 Trillion in 2020.

That will be ~67% of GDP, compared to ~53% in 2009, and that's not a change for the better. And that assumes a ~$20 Trillion GDP in 2020.

Trust Funds and Measures of Federal Debt (http://www.cbo.gov/ftpdocs/108xx/doc10871/AppendixD.shtml)

Not a very encouraging picture...

cdude
10 Feb 10,, 22:50
That's a great graph! Do you have a graph not for the whole of Asia, but for Japan/China/SE Asia and Other Asian countries separately?


1. Your choice of start dates suffers from selection bias since you're comparing against a war ravaged Europe/Asia. Once you adjust for the catch up effect of Western Europe/Asia recovering from the war, the US' share of world GDP has remained remarkable stable. Rather than "consistently losing ground," we have maintained our relative economic power, while enjoying the bountiful fruits of the positive sum game of trade that has increased our real income (and in turn, consumption) 6.5x since the end of WWII or 3x since 1969, which is the start date of my graph below.
2. You're denying positive sum games, which is fundamentally flawed and denies reality.
3. I see that you've also ignored your earlier logic error, which by your construction, means that the US increased its power since WWII.

http://4.bp.blogspot.com/_otfwl2zc6Qc/SwWyuy39ikI/AAAAAAAAL8g/Cp4XVVbTmqY/s400/worldgdp.jpg

Shek
11 Feb 10,, 02:20
That's a great graph! Do you have a graph not for the whole of Asia, but for Japan/China/SE Asia and Other Asian countries separately?

Sorry, I picked it of the Carpe Diem blog - CARPE DIEM (http://mjperry.blogspot.com). He got the underlying data from here - ERS/USDA Data - International Macroeconomic Data Set (http://www.ers.usda.gov/Data/Macroeconomics/) - not sure how it's broken out.

Old World Order
11 Feb 10,, 05:16
1. Your choice of start dates suffers from selection bias since you're comparing against a war ravaged Europe/Asia. Once you adjust for the catch up effect of Western Europe/Asia recovering from the war, the US' share of world GDP has remained remarkable stable. Rather than "consistently losing ground," we have maintained our relative economic power, while enjoying the bountiful fruits of the positive sum game of trade that has increased our real income (and in turn, consumption) 6.5x since the end of WWII or 3x since 1969, which is the start date of my graph below.

Ermm...I know. I did that on purpose. That's [b]why I chose that date. It's when the US was at its zenith, relatively speaking. Do you disagree?


2. You're denying positive sum games, which is fundamentally flawed and denies reality.

Again, in a world of finite resources, it's all a zero sum game on a large enough scale.


3. I see that you've also ignored your earlier logic error, which by your construction, means that the US increased its power since WWII.

That's...interesting. By what measure would you conclude that?

gunnut
11 Feb 10,, 06:16
Again, in a world of finite resources, it's all a zero sum game on a large enough scale.

Wrong. Increased efficiency and breakthrough in technology can increase production with less resources.

Granted, on a large enough scale, we are but a speck of dust in the universe occupying merely a blink of an eye on the cosmic timescale.

Within this speck of dust and cosmic blink of an eye, it's not zero sum.

Old World Order
11 Feb 10,, 06:54
....Aaaand the resources are still finite. You can look at anything on a small enough scale and say that it's not zero sum, and that's fine, but in the larger scale, in the international system, if everyone is 7 feet tall, no one is actually 'tall'. If every nation had the military strength of the US, it wouldn't be that every nation was 'extremely strong' at all. They'd all just be the same, militarily speaking. The US would no longer be strong, although strictly qualitatively speaking it still would be. But these are relative terms, by their very nature. 'Stronger' than what? 'Taller' than what?

And that's my point. The difference between the US and other nations has been steadily shrinking and will for awhile; it is- relatively speaking- declining.

JAD_333
11 Feb 10,, 07:42
How are you interpreting zero-sum? Isn't your understanding that in a zero sum game one side's loss is equal to the other side's gain (-1+1=0). In other words there is a winner and loser but neither is a winner nor a loser because both gain something in the end.

In economics, trading partners who give up equal to what they gain are engaged in a zero sum game, but if one trading partner loses more than it gains, it's a non-zero sum game.

Since both zero-sum and non zero sum exist as possible outcomes, can we not say that either could be applicable to the US-China relationship, and only the inexactness of our knowledge of all the details of the relationship prevents us from saying which?

Old World Order
11 Feb 10,, 08:42
Certainly, on a microlevel the only thing preventing completely foolproof, airtight, and correct analysis (and complete foreknowledge), is complete and total knowledge. Well, who has that?

The issue, though, is when it comes to national 'power' (more accurately, national security [both defensive and offensive capabilities] and national economics) when someone gains X, you lose it. I can have an arms room in my basement with a hundred rifles, but when my neighbor buys one AR-15, I have lost some measure of security, relatively speaking. It's 'zero sum' in that the whole system subscribes to game theory- it's one of the foundations that the international system post-Treaty of Westphalia is based on, even though there was no 'game theory' for most of that time.

gunnut
11 Feb 10,, 09:07
....Aaaand the resources are still finite. You can look at anything on a small enough scale and say that it's not zero sum, and that's fine, but in the larger scale, in the international system, if everyone is 7 feet tall, no one is actually 'tall'. If every nation had the military strength of the US, it wouldn't be that every nation was 'extremely strong' at all. They'd all just be the same, militarily speaking. The US would no longer be strong, although strictly qualitatively speaking it still would be. But these are relative terms, by their very nature. 'Stronger' than what? 'Taller' than what?

And that's my point. The difference between the US and other nations has been steadily shrinking and will for awhile; it is- relatively speaking- declining.

OK, resources are finite. But we learn to use resources better, more efficiently, by technological breakthroughs.

Something like 40% of the US population was involved in farming at the beginning of the 20th century, to feed a nation of 75 million. By 2000, roughly 3% of US population was involved in farming to feed a nation of 280 million. All these extra people are doing...what? Sitting around? Or producing things not imaginable in 1900? The resources are there. But we didn't know how to use it.

Microchips, silicon wafers, are basically sand. Sand is everywhere. The resources was there for the ancient Egyptians. Why didn't they make microchips? Zero sum, right? Why didn't the premiere power of the ancient world build tanks and make microchips?

Oil was always in the ground. Why didn't the Romans use it to power their bomber fleet? Oh wait, they didn't have any. Why not? Zero sum right? The resources, aluminum, oil, iron, titanium, were always there. They didn't make bombers. Instead they used shields and swords and marched on foot. I wonder why.

The sun has always been there right? And will be there for the next few billion years. The resource is finite. We get so much sunlight every day. No more. No less. This solar energy is more than we could ever hope to use. Why don't we use it instead of oil, coal, gas, and uranium?

What is the one common thread in all 3 scenarios?

Shek
11 Feb 10,, 12:57
Ermm...I know. I did that on purpose. That's [b]why I chose that date. It's when the US was at its zenith, relatively speaking. Do you disagree?

I'd be curious to know when in 1945 you think American power was at its zenith. I wouldn't date it to before the surrender of Japan, and I wouldn't date it to after since our advantage over the Soviets was the A-bomb, and we didn't have any. Also, since your metric thus far has been world GDP (actual output), your missing latent capacity, and so 1945 statistics don't capture that.

If I had to date it, some potential dates would be in the 1950s (clearly the leader of the free world with both soft and hard power thanks to the motivation provided by the red threat with a huge advantage in nuclear warheads and delivery methods) or else 2002 up through April 2003 (hyperpower with a big stick with some soft power pull thanks to 9/11).


Again, in a world of finite resources, it's all a zero sum game on a large enough scale.

Maybe over a long enough temporal period, say thousands of years. However, any deal that results in a negative sum game or positive sum game negates your argument. Israel-Palestine is an example of a negative sum game. Zero sum just invalidated. Your SALT and START treaties are positive sum game. Zero sum just invalidated.

And even over thousands of years, technology enters the picture and can make the role of scarce resources irrelevant. We should all be dead by now because there simply isn't enough farmland to support the current population. Oops. Technology invalidated that prediction. We will all die the day that the last drop of oil is used (here's a riddle for you - why will we never run out of oil?) if it actually came to that? No, because technology will have created something to replace it that is more economical. In fact, technology has already created several technological viable alternatives - we just have seen oil become scarce enough to make the other technologies economically viable yet.


That's...interesting. By what measure would you conclude that?

By your very own words and logic. Your construct is zero sum. Going from unipolar to multipolar is a loss of power. However, since you've got a zero sum world, going from multipolar (US, France, England, USSR) to bipolar (US vs. USSR) to unipolar (US) means that the US gained power. By your very logic laid out in I believe your initial post, you have to date the zenith of American power to somewhere between 1991 and 2003.

Shek
11 Feb 10,, 13:05
Certainly, on a microlevel the only thing preventing completely foolproof, airtight, and correct analysis (and complete foreknowledge), is complete and total knowledge. Well, who has that?

The issue, though, is when it comes to national 'power' (more accurately, national security [both defensive and offensive capabilities] and national economics) when someone gains X, you lose it. I can have an arms room in my basement with a hundred rifles, but when my neighbor buys one AR-15, I have lost some measure of security, relatively speaking. It's 'zero sum' in that the whole system subscribes to game theory- it's one of the foundations that the international system post-Treaty of Westphalia is based on, even though there was no 'game theory' for most of that time.

China's economic growth has increased US economic growth. That's a positive sum game. It invalidates your analysis.

Also, game theory is not zero sum, either. It can be negative sum game (brinksmanship, prisoners' dilemma), zero sum game (brinksmanship), or positive sum game (stag hunt). In fact, one of the main lessons from game theory is how coordination helps outcomes, and coordinate leads to positive sum games. If you study the bipolar world of the Cold War, one of the main lessons to take from it from an international relations perspective is how coordination between nations to form alliances created a system that was incredibly stable and led to a world order that allowed for incredible economic growth to be possible (the fact that USSR imploded is not because it was a zero sum game, but because of the absolute corruptness of communism).

Shek
11 Feb 10,, 14:27
For a look at how a negative sum game (while it may appear to be zero sum - one's security is another's insecurity - the reality is that the vengeance incentive structure drives you to concentrate too many resources on security and so both parties reach suboptimal outcomes) can be turned into a positive sum game through coordination and agreement to another relationship paradigm, the following article is excellent. It takes several pages and it's revealed in just a paragraph or two if memory serves me correctly, but it's a beautifully written article that reveals the fallacy of the classical realist school of thought of portraying the zero sum game as the only game in town. It also highlights that it isn't necessarily easy to escape the anarchy, but nonetheless, it's doable.

Old World Order
11 Feb 10,, 18:41
I've read that article, and while it's well written, it certainly doesn't do anything to dispute the Waltz/Walt/Mearsheimer crowd. As long as states exist in anarchy- and only their own strengths enforce treaties- there's simply no way around a gain in one's security being a lose in an others'.

What you think is 'invalidating' something that people have known since well before Hobbes- although he popularized it- is not. It doesn't appear to be zero sum in the short term, and that's fine. But if China is growing stronger as relative to the US (since the Reform and Open Door policy, who could disagree with this), then logic dictates that the US is growing weaker as relative to China. Certainly, with the fall of the USSR, the US enjoyed unmitigated hegemony and in just about all respects still does. Nonetheless, each day it involves a little less power than the day before, generally speaking.

gunnut
11 Feb 10,, 19:17
I've read that article, and while it's well written, it certainly doesn't do anything to dispute the Waltz/Walt/Mearsheimer crowd. As long as states exist in anarchy- and only their own strengths enforce treaties- there's simply no way around a gain in one's security being a lose in an others'.

What you think is 'invalidating' something that people have known since well before Hobbes- although he popularized it- is not. It doesn't appear to be zero sum in the short term, and that's fine. But if China is growing stronger as relative to the US (since the Reform and Open Door policy, who could disagree with this), then logic dictates that the US is growing weaker as relative to China. Certainly, with the fall of the USSR, the US enjoyed unmitigated hegemony and in just about all respects still does. Nonetheless, each day it involves a little less power than the day before, generally speaking.

It can still be positive sum.

Let's say in 1991, with the collapse of the Soviet Union, the US became the first hyper power in the history of the world. US controlled 100 units of power. China at the time was still getting organized with reform, controlled 5 units of power. US and China combined for 105 units of power, with US being 20 times more powerful.

It's 2010 now, China made tremendous progress and now possess 30 units of power. The US made progress as well, now possess 120 units of power. Both countries now have 150 units of power with US being 4 times as powerful.

Total power wise, the 2 countries increased by almost 50% combined. The US is relatively weaker than before to China, but more powerful than 20 years ago.

Is this a positive sum, negative sum, or zero sum?

Old World Order
11 Feb 10,, 19:21
That's a half-full, half-empty kinda thing from my perspective. Your mileage may vary. For me, it goes back to my comment about how if everyone is 7'0, no one is actually 'tall' anymore than anyone is 'short'. In the example you gave, the US would've went from being 20 times as powerful to 4 times as powerful- that to me is a loss in geopolitical standing. It may be good for people of the US (and obviously China) as long as that does not lead to war or serious diplomatic crises. If (when) it does, and China isn't aligned with the US- suddenly the 'decline' becomes important.

Mihais
11 Feb 10,, 19:24
China's economic growth has increased US economic growth. That's a positive sum game. It invalidates your analysis.

Also, game theory is not zero sum, either. It can be negative sum game (brinksmanship, prisoners' dilemma), zero sum game (brinksmanship), or positive sum game (stag hunt). In fact, one of the main lessons from game theory is how coordination helps outcomes, and coordinate leads to positive sum games. If you study the bipolar world of the Cold War, one of the main lessons to take from it from an international relations perspective is how coordination between nations to form alliances created a system that was incredibly stable and led to a world order that allowed for incredible economic growth to be possible (the fact that USSR imploded is not because it was a zero sum game, but because of the absolute corruptness of communism).

Alliances that tried to gain relative advantages towards the other,tried to undermine each other etc... in the old realist fashion.The only missing ingredient was open war.

gunnut
11 Feb 10,, 19:26
That's a half-full, half-empty kinda thing from my perspective. Your mileage may vary. For me, it goes back to my comment about how if everyone is 7'0, no one is actually 'tall' anymore than anyone is 'short'. In the example you gave, the US would've went from being 20 times as powerful to 4 times as powerful- that to me is a loss in geopolitical standing. It may be good for people of the US (and obviously China) as long as that does not lead to war or serious diplomatic crises. If (when) it does, and China isn't aligned with the US- suddenly the 'decline' becomes important.

I think your definition of "zero sum" is flawed, or at least different than how it's commonly interpreted.

You look at it as in relative strength percentage wise. Most people look at it as in absolute numbers.

Our share of the pie maybe smaller, but the whole pie is much larger than before. Everyone is enjoying more absolute pie, even though the relative share of the pie is smaller.

Mihais
11 Feb 10,, 19:35
Our share of the pie maybe smaller, but the whole pie is much larger than before. Everyone is enjoying more absolute pie, even though the relative share of the pie is smaller.

Yes Gunnut,but in terms of competitive advantage the relative advantage is the one that matters.

Old World Order
11 Feb 10,, 23:08
Our share of the pie maybe smaller, but the whole pie is much larger than before. Everyone is enjoying more absolute pie, even though the relative share of the pie is smaller.

This is true, but the relative share is what is discussed when talking about the rise and fall of civilizations.

gunnut
11 Feb 10,, 23:18
This is true, but the relative share is what is discussed when talking about the rise and fall of civilizations.

Right, but you were using the term "zero sum game."

That does not happen. Much like in econ 101 the professor always uses the term "the market is in equilibrium," which in fact never happens. The market is never in equilibrium. The global economy is never a zero sum game. The pie always gets larger in the long term.

Old World Order
12 Feb 10,, 03:13
But 100% never becomes 101%.

andrew
12 Feb 10,, 03:44
What steps must we take first and foremost in order to stall this slight faltering we are going through?


This faltering isn’t slight. It’s profound.
Ultimately, demographics rules.
But the US has one resource which it could use. That is the desire of many people from other countries to become a US citizen.
So the recipe is simple. Open the border and compensate the deficit.

bonehead
12 Feb 10,, 04:29
Many of our illegals have no desire what so ever to be U.S. citizens. Huge problem. Secondly, we have too few resources for the people we do have. Adding hundreds of millions more is not going to help the problem.

Old World Order
12 Feb 10,, 04:31
You'd be hard pressed to name a nation that has a "better" geographical position than the US, when talking about resources and threats to them.

Officer of Engineers
12 Feb 10,, 05:25
You'd be hard pressed to name a nation that has a "better" geographical position than the US, when talking about resources and threats to them.Canada.

Old World Order
12 Feb 10,, 06:04
Canada has a historically powerful nation on a very long border- never good for business- and most of its territory is all but unsettled, some of that even inhospitable.

Officer of Engineers
12 Feb 10,, 06:12
Canada has a historically powerful nation on a very long border- never good for business- and most of its territory is all but unsettled, some of that even inhospitable.Except when doing business with that historically powerful nation on a very long border - always good for business even during times of war between us. In the War of 1812, we bought all our war stuff from the US before the war.

Old World Order
12 Feb 10,, 06:22
Ha! I didn't know that, that's funny. But, generally speaking, the farther away you are from other major powers, the better off you are. As far as working with the US, sure it's a great thing.

gunnut
12 Feb 10,, 06:26
But 100% never becomes 101%.

But 25% now is a lot more than 50% a century ago.

Old World Order
12 Feb 10,, 06:43
That only matters domestically. It doesn't matter internationally. Take...I dunno, let's say the UK. The UK's military now could most assuredly smash the turn of the century's (20th, naturally) UK military, right? Far better equipment, probably better training, more advanced tactics, more powerful weapons. Same with the economy of the current United Kingdom as opposed to the 1900 one. Yet, the 1900 UK was a great power, some would argue still the great power (although I'm not sure I'd agree with that). The present UK is not, and no one has confused them with one since 1956.

Their slice of the pie as it pertains to world power has decreased. Their strength has declined. That's what I mean.

JAD_333
12 Feb 10,, 06:53
I've read that article, and while it's well written, it certainly doesn't do anything to dispute the Waltz/Walt/Mearsheimer crowd. As long as states exist in anarchy- and only their own strengths enforce treaties- there's simply no way around a gain in one's security being a lose in an others'.

Now, wait a minute. In a zero-sum game, it's agreed the winner scores (+1) while the loser scores (-1). The sum at end of the game is 0. The zero signifies that both gained something. Using chess as an example, the winner takes the match; the loser gains experience which will make him a better player in the future. Both benefit.

Now, in a non-zero-sum game (same as positive-sum-game) the winner gains more than the loser. How much depends on the stakes each side puts up. If in foreign trade, for example, one side bargains for goods valued at 2 but by hook or by crook manages to obtain them for goods valued at only 1, the game ends at +1 (+2-1=+1). Or, in chess, if by agreement, the winner of the game gets credit for +2 games, but the loser is charged only -1, again we get +2-1=+1.


...if China is growing stronger as relative to the US...then logic dictates that the US is growing weaker as relative to China.

Is the trade off solely as a result of exclusive interaction between the two? If so, which applies: zero-sum or non-zero-sum? If it's zero-sum then the US will somehow benefit from it. How?


Certainly, with the fall of the USSR, the US enjoyed unmitigated hegemony and in just about all respects still does. Nonetheless, each day it involves a little less power than the day before, generally speaking.

I assume you don't mean less power, but relatively less power.

JAD_333
12 Feb 10,, 06:59
Canada.

North America.

Old World Order
12 Feb 10,, 07:25
Now, wait a minute. In a zero-sum game, it's agreed the winner scores (+1) while the loser scores (-1). The sum at end of the game is 0. The zero signifies that both gained something. Using chess as an example, the winner takes the match; the loser gains experience which will make him a better player in the future. Both benefit.

I've never heard it described in that way. It's zero because someone gained something (a win) and someone lost something (also a win). +1 and -1, equaling zero. I mean, even in your example, both players gained experience, no? We can assume the loser was less experienced, so "the experience" of playing the game was more helpful to him (say he's only played 20 times and the winner has played 40 times: the experience for the loser would be twice as meaningful, all other things being equal), but there's no specific reason we should make that assumption. What if the winner had less experience? What if they had the same amount of experience? Basically, I really don't think that's a good description of what 'zero sum' is.


Now, in a non-zero-sum game (same as positive-sum-game) the winner gains more than the loser. How much depends on the stakes each side puts up. If in foreign trade, for example, one side bargains for goods valued at 2 but by hook or by crook manages to obtain them for goods valued at only 1, the game ends at +1 (+2-1=+1). Or, in chess, if by agreement, the winner of the game gets credit for +2 games, but the loser is charged only -1, again we get +2-1=+1.

Nonzero sum would indicate that cooperation leads to better results than going it alone, basically. The Prisoner's Dilemma (http://en.wikipedia.org/wiki/Prisoner%27s_dilemma) sums it how that could work rather nicely. The problem- and it is the ever-present problem in the way nations interact with each other- is that to do it requires trust. To do it consistently requires consistent trust. To do it indefinitely requires indefinite trust. Both of the latter types of trust- obviously indefinite more so- requires an alignment of interests that is extremely rare. If I know our interests are not equal, how long can I depend on equal responses to equal threats to our interests? How long can I trust that you will respond as I respond? Ideally, of course, a nonzero sum game (as I've interpreted it, which is differently from the way you have) is the way to go when you can. But that trust isn't ever-present so eventually it all comes down to everyone playing a zero sum game.

If I've misunderstood, my apologies, but unless there's some nuance I'm not seeing in your post, I don't think I have.


Is the trade off solely as a result of exclusive interaction between the two? If so, which applies: zero-sum or non-zero-sum? If it's zero-sum then the US will somehow benefit from it. How?

Well, we'll need to agree on terms here.


I assume you don't mean less power, but relatively less power.

Yeah, I did, my bad.

JAD_333
12 Feb 10,, 08:19
This faltering isn’t slight. It’s profound.

Faltering is the wrong word. The US is not faltering. The rest of the world is catching up.

If anything is profound, it's the rise of formerly so-called underdeveloped countries. Profound, but not surprising, at least not to someone my age who has watched the US hatch all sorts of programs over the years to raise living standards and promote economic development around the world. Not all of it was altruistic and not all of it was good, but the fact is, that in pursuing new markets and promoting its security, the US did much to lay the groundwork for the economic growth we're seeing today in China, India, Brazil and elsewhere.

All my life I've wondered at the contradiction that seems to exist between the American psyche's need to be number 1 in the world and the American drive to raise the world's standard of living. It seemed to me inevitable that America's investment and aid abroad would someday cost it the 1 spot. If things keep going as they are now, Americans will have 10-15 years to get used to the idea, but when and if the time comes, the big problem will not be how to regain the top spot, but how to keep order among all the new 500 lb gorillas in the world.



Ultimately, demographics rules.

If that were the case, little England would never have created an empire on which the sun never set. The US would never have surpassed all of Asia in economic power.


But the US has one resource which it could use. That is the desire of many people from other countries to become a US citizen. So the recipe is simple. Open the border and compensate the deficit.

That was done once and contributed greatly to America's success. And to some extent it is still true. Look at the contribution Asian immigrants have made to US technological advances, just to cite one example. But numbers are not the answer; quality is. As technology advances, particularly in manufacturing, it's not more people you need, but more robots.:)

JAD_333
12 Feb 10,, 09:10
I've never heard it described in that way. It's zero because someone gained something (a win) and someone lost something (also a win). +1 and -1, equaling zero. I mean, even in your example, both players gained experience, no?

Yes. But the experiences were different. The +1-1=0 is not my definition; it's the mathematical definition of the term. It assumes the trade is equally beneficial to all parties. If not, then it's non-zero-sum. There are no unopposed absolutes. One cannot exist without the other.


We can assume the loser was less experienced...

No. We cannot assume anything, except he experiences a loss which affects him differently than the win affects the other guy. One guy gets the joy of winning and the other guy gets more determination to win next time. Now, if the winner gets more than the game dictates, e.g., to shoot the other guy, it non-zero-sum.



What if the winner had less experience? What if they had the same amount of experience? Basically, I really don't think that's a good description of what 'zero sum' is.

It doesn't matter either way for the purpose of the definition. Only the game and the outcome matters. The wisdom of playing in the first place may be open to question. If you're going to end up losing more than just the game, you might want to decline to play...to much excitement for weak heart, losing causes suicidal tendencies, etc. etc.




Nonzero sum would indicate that cooperation leads to better results than going it alone, basically. The Prisoner's Dilemma (http://en.wikipedia.org/wiki/Prisoner%27s_dilemma) sums it how that could work rather nicely. The problem- and it is the ever-present problem in the way nations interact with each other- is that to do it requires trust.

Yes. I don't know how you view trust. I consider it meaning well. But memories are fallible. In my business I always have a written contract. A good contract is zero-sum. I get their money and no more; they get the new house as specified. :))


Ideally, of course, a nonzero sum game (as I've interpreted it, which is differently from the way you have) is the way to go when you can.

Seems contradictory. You win or lose too much in non-zero-sum. Of course, anyone would like to come out farther ahead than the rules call for, but if one breaks the rules in the process, one could also come out with less than agreed upon.



But that trust isn't ever-present so eventually it all comes down to everyone playing a zero sum game.

I don't quite see how trust fits into it. Whether I trust you or not, I am going to watch your moves and make sure they're kosher. That is, make sure they are according to the rules that we agreed on before we started.



If I've misunderstood, my apologies, but unless there's some nuance I'm not seeing in your post, I don't think I have.

I don't myself see all my nuances.:))

Shek
12 Feb 10,, 12:14
Nonzero sum would indicate that cooperation leads to better results than going it alone, basically. The Prisoner's Dilemma (http://en.wikipedia.org/wiki/Prisoner%27s_dilemma) sums it how that could work rather nicely. The problem- and it is the ever-present problem in the way nations interact with each other- is that to do it requires trust. To do it consistently requires consistent trust. To do it indefinitely requires indefinite trust. Both of the latter types of trust- obviously indefinite more so- requires an alignment of interests that is extremely rare. If I know our interests are not equal, how long can I depend on equal responses to equal threats to our interests? How long can I trust that you will respond as I respond? Ideally, of course, a nonzero sum game (as I've interpreted it, which is differently from the way you have) is the way to go when you can. But that trust isn't ever-present so eventually it all comes down to everyone playing a zero sum game.

This is in incorrect interpretation of the prisoner's dilemma. An indefinite game doesn't require indefinite trust. Tit-for-tat strategies produce suboptimal payoffs, which point then to cooperation strategies for better payoffs. Furthermore, commitment devices can make a cooperation strategy credible between two parties that don't trust each other one lick. Misperceptions make the straight tit-for-tat strategy slightly less effective, but some variation of tit-for-tat leads to cooperative strategies over the long-run.

pChan
12 Feb 10,, 13:24
Not all of it was altruistic and not all of it was good, but the fact is, that in pursuing new markets and promoting its security, the US did much to lay the groundwork for the economic growth we're seeing today in China, India, Brazil and elsewhere.

The Indians and Chinese unshackled themselves from socialist dogma that was preventing them from achieving their full potential. American actions mattered very little to their present rise. South Korea is an example that will fit your conjecture.



If that were the case, little England would never have created an empire on which the sun never set. The US would never have surpassed all of Asia in economic power.

Demographics matter a lot. If England's colonies had english people then they would not be called colonies and the sheer number would mean England would be the foremost power even today. But none of the 50 states of America are colonies.



That was done once and contributed greatly to America's success. And to some extent it is still true. Look at the contribution Asian immigrants have made to US technological advances, just to cite one example. But numbers are not the answer; quality is. As technology advances, particularly in manufacturing, it's not more people you need, but more robots.:)

Unless those robots can think numbers would always matter IMHO.

Old World Order
12 Feb 10,, 18:35
Yes. But the experiences were different. The +1-1=0 is not my definition; it's the mathematical definition of the term. It assumes the trade is equally beneficial to all parties. If not, then it's non-zero-sum. There are no unopposed absolutes. One cannot exist without the other.



No. We cannot assume anything, except he experiences a loss which affects him differently than the win affects the other guy. One guy gets the joy of winning and the other guy gets more determination to win next time. Now, if the winner gets more than the game dictates, e.g., to shoot the other guy, it non-zero-sum.

It doesn't matter either way for the purpose of the definition. Only the game and the outcome matters. The wisdom of playing in the first place may be open to question. If you're going to end up losing more than just the game, you might want to decline to play...to much excitement for weak heart, losing causes suicidal tendencies, etc. etc.

If they both experienced a positive outcome, it wouldn't be zero sum.



Yes. I don't know how you view trust. I consider it meaning well. But memories are fallible. In my business I always have a written contract. A good contract is zero-sum. I get their money and no more; they get the new house as specified. :))

Seems contradictory. You win or lose too much in non-zero-sum. Of course, anyone would like to come out farther ahead than the rules call for, but if one breaks the rules in the process, one could also come out with less than agreed upon.

I don't quite see how trust fits into it. Whether I trust you or not, I am going to watch your moves and make sure they're kosher. That is, make sure they are according to the rules that we agreed on before we started.

Trust matters very much. The UK and France, for example, trusted the US about Suez before it, but found later that asymmetric interests will result in asymmetrical responses to threats.


This is in incorrect interpretation of the prisoner's dilemma. An indefinite game doesn't require indefinite trust. Tit-for-tat strategies produce suboptimal payoffs, which point then to cooperation strategies for better payoffs. Furthermore, commitment devices can make a cooperation strategy credible between two parties that don't trust each other one lick. Misperceptions make the straight tit-for-tat strategy slightly less effective, but some variation of tit-for-tat leads to cooperative strategies over the long-run.

I moved on from the prisoner's dilemma for the rest of that excerpt and into diplomacy- an important facet of geopolitical "strength". It has everything to do with how states related to each other in a state of nature. If everyone on the planet just threw their weapons in a furnace and promised never to hurt each other, wouldn't that be the ultimate positive outcome of a prisoner's dilemma involving billions of people? But why doesn't that happen?

JAD_333
13 Feb 10,, 07:30
The Indians and Chinese unshackled themselves from socialist dogma that was preventing them from achieving their full potential. American actions mattered very little to their present rise. South Korea is an example that will fit your conjecture.

I stand by what I said. The Indians and Chinese and others enjoying strong economic growth deserve enormous credit for their efforts. What I meant is that the whole body of US actions, whether through direct aid, diplomacy or military might, has contributed significantly to this blossoming. One example is US policy since WWII to protect the sea lanes from hostile navies and thereby keep international trade flowing freely. Self-serving, yes, but beneficial to all nations. Another is matching the USSR tit-for-tat in a cold war until the latter could not continue, thus establishing decisively that a communist command economy cannot outdo a free, capitalistic economy.

Neither India nor China live in a vacuum. They, like all nations, are affected by actions from afar. Ripples that begin in the western hemisphere reach Asia and vice versa. I simply say, in the past 60 years the US has sent out the most ripples. China and India are not growing in spite of them, but in large part because of them.

Yes, special attention was given to W.Europe, Japan and S.Korea, but it's also true that their success, in turn, radiated out to other nations and thereby increase trade.



Demographics matter a lot. If England's colonies had english people then they would not be called colonies and the sheer number would mean England would be the foremost power even today. But none of the 50 states of America are colonies.

I believe history shows that having a smaller population is not necessarily a detriment to gaining economic and military super power status. Japan, Britain, Russia, Turkey, Austria are countries that come to mind.

One quibble with your example. England's rise to empire and falling away from it had nothing to do with its population. It's rise was due to its liberal climate of entrepreneurship fostered by law and protected (with occasional lapses) by a powerful navy. The midwife of all this was an elected body, the House of Commons. That liberality was pretty novel at the time. War and competition brought the BE down.


Unless those robots can think numbers would always matter IMHO.

Yes, you're right. But in the context of manufacturing, thinking isn't always necessary. Robots could free up manpower to use elsewhere, say military service. Rome grew because it citizen-farmers had free time between cycles of planting and harvest to go off on months-long campaigns. A labor-intensive economy can't afford to do that. I am not advocating a policy of conquest, but if faced with a military intent on conquest, it would be good to have manpower available rather than strip factories for it.

JAD_333
13 Feb 10,, 07:54
If they both experienced a positive outcome, it wouldn't be zero sum.

Right. Equal benefit would be a better way of putting it.


[QUOTE]Trust matters very much. The UK and France, for example, trusted the US about Suez before it, but found later that asymmetric interests will result in asymmetrical responses to threats.

Yes, it matters. But I'd be willing to wager that you calculate, consciously or unconsciously, from their past behavior whether you can trust a person.
As the saying goes, "trust but verify."

Shek
13 Feb 10,, 14:15
I moved on from the prisoner's dilemma for the rest of that excerpt and into diplomacy- an important facet of geopolitical "strength". It has everything to do with how states related to each other in a state of nature. If everyone on the planet just threw their weapons in a furnace and promised never to hurt each other, wouldn't that be the ultimate positive outcome of a prisoner's dilemma involving billions of people? But why doesn't that happen?

The problem is that the prisoner's dilemma continues. It's not a single shot game against unknown players. It's a continuous game against known players. If you're going to use the prisoner's dilemma, you can't just pull results from one version of it and then ignore the other variations.

As to your question as to why doesn't everyone just throw away weapons, your not modeling risk in your payoff structure. I agree with you that there's a security dilemma, but it's not the one you try to present to where you maximize security. Instead, you hedge against risk by guaranteeing some minimum level of security. Thus, the payoffs that are modeled within the prisoner's dilemma need to reflect expected payoffs, not some unrealistic payoffs.

The evolution of cooperation between the US and the USSR over the course of the Cold War shows how an iterated prisoner's dilemma results in greater cooperation over time, despite the fact that the two parties have nowhere near infinite trust in one another. Hence, JAD's use of the phrase "trust but verify." The verification schemes of the START treaty are an example of a commitment device that allows for greater cooperation and to artificially build "trust" that doesn't exist because it prevents cheating/defecting.

Old World Order
13 Feb 10,, 19:03
But what does that mean? Did the US and the USSR both increase in power during the Cold War?

Canmoore
13 Feb 10,, 19:03
Canada has a historically powerful nation on a very long border- never good for business- and most of its territory is all but unsettled, some of that even inhospitable.

How do you figure? We have a huge territory full of untapped resources, fresh water, and lots of land. Our ONLY neighbour is the worlds most powerful nation, between us, more trade crosses our boarders than any other boarder in human history.

Plus, we do not have a 3rd world country on our boarder, and all of the troubles that come along with that!;)

ArmchairGeneral
13 Feb 10,, 19:16
Regardless of terminology, it does seem to me that Old World Order has a valid point regarding relative strength. The UK is undeniably much richer and more powerful than it was a century ago, but it is certainly much less rich and powerful in relative terms.

In the same way, unless both China and India experience some sort of economic or demographic catastrophe, it seems inevitable that the US will be eventually eclipsed as the world's largest economy and (possibly significantly later, going by the example of the US) also eventually be matched or exceeded in military strength.

Not there's much to be done about it, since a demographic/economic catastrophe in China/India would likely be a much worse outcome for everyone, including America. The only thing about it all that really concerns me is the thought of a multi-polar world with nuclear weapons. :eek:

Would be nice to have a peaceful transfer of superpower status without all the fuss and bustle of a Punic/Napoleonic/World War. Yeah, right. :(

Shek
13 Feb 10,, 19:56
But what does that mean? Did the US and the USSR both increase in power during the Cold War?

Yes.

Old World Order
13 Feb 10,, 23:30
How do you figure? We have a huge territory full of untapped resources, fresh water, and lots of land. Our ONLY neighbour is the worlds most powerful nation, between us, more trade crosses our boarders than any other boarder in human history.

Plus, we do not have a 3rd world country on our boarder, and all of the troubles that come along with that!;)

Historically, it's not a good thing to be right next to a world power.


Yes.

!!!

From when to when? And as compared to when?

JAD_333
14 Feb 10,, 00:57
From when to when? And as compared to when?

Old world:

Shek answered your question. You said during the 'cold war'. And for comparison you should be able to infer any non-cold war time frame.

Old World Order
14 Feb 10,, 01:34
Ummm...no? Obviously the USSR didn't increase in power throughout the entire Cold War; it ended kind of badly for them. And Shek seems to be talking from the position of the 70s detente, but I wanted some acknowledgment of that.

Shek
14 Feb 10,, 02:48
Ummm...no? Obviously the USSR didn't increase in power throughout the entire Cold War; it ended kind of badly for them. And Shek seems to be talking from the position of the 70s detente, but I wanted some acknowledgment of that.

No, the Soviets saw an increase in their power up until pretty much the end of the Cold War. The wheels didn't come off until 1988, and then it ended a year later.

Chunder
14 Feb 10,, 03:25
Gotta say, OWO has a point. Being next to the U.S is not a recipe for safety when you have Bears coming over the polar ice cap - with you in between them and their target. Or when you got the potential for being a big fat secondary target I.E September 11. Don't read that wrong, if your allied your allied, but if your Poland between Nazi Germany and the USSR...

Invariably though Resources do not mean jack if you lack the ability to exploit them. The U.S is powerful because it's political system is paired with tremendous natural wealth and hospitable lands.

Trade efficiency is a great enabler. You may have the goods but if you can't deliver en mass with efficiency you loose. Brazil case in point.

Old World Order
14 Feb 10,, 19:16
No, the Soviets saw an increase in their power up until pretty much the end of the Cold War. The wheels didn't come off until 1988, and then it ended a year later.

You're proposing that after the Sino-Soviet split and, especially, the subsequent (and mostly successful) triangle diplomacy between China, the USSR, and the US that Soviet power actually increased? Or that after the Politburo decided that it couldn't treat Solidarity as it did the Prague Spring that Soviet strength over the Warsaw Pact nations didn't falter? I don't think you'd find too many people to agree with you there.

Shek
14 Feb 10,, 19:23
You're proposing that after the Sino-Soviet split and, especially, the subsequent (and mostly successful) triangle diplomacy between China, the USSR, and the US that Soviet power actually increased? Or that after the Politburo decided that it couldn't treat Solidarity as it did the Prague Spring that Soviet strength over the Warsaw Pact nations didn't falter? I don't think you'd find too many people to agree with you there.

No, I'm saying that both US and USSR power increased over the course of the Cold War. Soviet power only started faltering right around 1988 when they imploded internally and then the Cold War ended followed by the USSR imploding as well.

Old World Order
14 Feb 10,, 20:39
...Why did you say 'no' there? If you're proposing that US and USSR's power increased over the course of the Cold War, you are saying that the USSR's power increased during the Sino-Soviet split/Nixon opening China/triangle diplomacy and you are saying that the USSR's decision not to stamp down on Solidarity increased their power. From 1945 to 1988, both became stronger overall but not because of cooperation, but because each decade (roughly) they hashed out- and expanded- their spheres of influence over varying regions (ie, 40s, Europe; 50s, Northeast Asia; 60s, Southeast Asia; 70s, Africa; 80s, Central/South America). After detente started, though, the Soviet Union successively lost power.

Officer of Engineers
14 Feb 10,, 20:44
You're proposing that after the Sino-Soviet split and, especially, the subsequent (and mostly successful) triangle diplomacy between China, the USSR, and the US that Soviet power actually increased?Right after the Sino-Soviet split? I think anyone who has studied period would state outright that Soviet power increased relatively and absolutely. Just going by the numbers alone, they had upwards of 30,000+ nuclear warheads (up from zero near the beginning of the cold war), had over 200 divisions under Moscow's command (Soviet Far East and Warsaw Pact) and had reached technological equivlency with the West (space race and Soviet armament at some point even surpassed the west - T-64 vs M-60 for instance).

In the mean time, the US had just retreated from Vietnam and China just woke up from the GPCR and whose army, though large, was little better than the WWI trench forces, resulting in the disastrous performance in the 1979 1st Sino-Vietnam War.

At least in 1979, the Soviet Invasion of Afghanistan was on par with the American Invasion of Iraq. They punched through mountain passes during the middle of winter and built roads to flush their army through.

Soviet allies, Vietnam and Cuba, were giving China and South Africa black eyes.

Old World Order
14 Feb 10,, 20:52
I'm not talking about military numbers.

Officer of Engineers
14 Feb 10,, 21:00
I've also included influence. Soviet fingers through Vietnam reached into South East Asia and through Cuba, influenced events in South Africa. The US after suffering Vietnam was not in a position to stop Moscow from doing anything. You've included Solidarity. Did you forget that Poland did stomp down on that union, under direct pressure from Moscow? Never mind that it didn't work in the long run but the fact was that had not Poland acted, Warsaw Pact tanks would have rolled through Poland.

Mao died in the middle of th Sino-Soviet split. Chinese direct challenge to the communist leadership died with him. And the Chinese fearing a Soviet invasion, withdraw her military forces 100 miles from the border, in effect trading space for time, and hopefully to stretch Soviet logistics. However, there was no question who was going to invade whom.

So I don't understand where and how do you think the Sino-Soviet split actually weakened Moscow. If anything, China was not the beast everyone thought she was.

Old World Order
14 Feb 10,, 21:20
The Soviet Union just lost nearly 800 million people from under its sway, and had a brand new serious enemy- many in the government considered China a larger threat than the US- that was also very soon to be a nuclear power. That wasn't a positive change for Moscow.

As an aside, documents have come to light exhibiting that Andropov and Chernenko (and obviously Gorbachev) never had any intention of actually of deploying Soviet troops to Poland (the Mitrokhin Archives and Mark Kramer's Cold War International History Project Bulletin), although they certainly milked the threat of it for all it was worth.

Officer of Engineers
14 Feb 10,, 21:52
The Soviet Union just lost nearly 800 million people from under its sway, and had a brand new serious enemy- many in the government considered China a larger threat than the US- that was also very soon to be a nuclear power. That wasn't a positive change for Moscow.But it was contained, overcame, diminished, and rendered irrevelent by further Soviet action. Whatever enemy the Chinese had become, it did not stop nor limit Soviet power growth. In fact, the Chinese caused Soviet power growth. The rasing of 45 divisions and moving of 200 warheads to the Sino-Soviet border.

And increased Soviet alliances in India and Vietnam to encircle China.


As an aside, documents have come to light exhibiting that Andropov and Chernenko (and obviously Gorbachev) never had any intention of actually of deploying Soviet troops to Poland (the Mitrokhin Archives and Mark Kramer's Cold War International History Project Bulletin), although they certainly milked the threat of it for all it was worth.Still does not change the fact that the Poles gave in to Soviet pressure.

JAD_333
14 Feb 10,, 22:03
I'm not talking about military numbers.

OWO:

Then it would be good if you restated your basic contention. I thought it had to do with economics.

Old World Order
15 Feb 10,, 09:44
But it was contained, overcame, diminished, and rendered irrevelent by further Soviet action. Whatever enemy the Chinese had become, it did not stop nor limit Soviet power growth. In fact, the Chinese caused Soviet power growth. The rasing of 45 divisions and moving of 200 warheads to the Sino-Soviet border.

I don't think it was contained/overcame/etc. Resources- lots of resources, militarily, political, diplomatically- were dedicated to a threat that simply didn't exist in the years before and, as I mentioned, was considered greater than the threat that existed previously (which was formidable). It'd be like if the US during the Cold War was suddenly struck with a threatening Western Europe (ignore, of course, for the purposes of this analogy that a threatening Western Europe would render the Soviet Union incredibly less threatening- the same situation did not occur with the US and China vis-a-vis the USSR). I mean, yes, it technically was overcame, but there was an expense. An expense that weakened the relative strength of the USSR.


And increased Soviet alliances in India and Vietnam to encircle China.

Something it didn't even have to bother with doing- let alone focus on- in the years prior.


Still does not change the fact that the Poles gave in to Soviet pressure.

Well...that's why I said "as an aside".


OWO:

Then it would be good if you restated your basic contention. I thought it had to do with economics.

That the US's strength is declining in an increasingly multipolar world, because it's share of the pie is decreasing. All of this talk about detente and the USSR increasing or decreasing in strength during the Cold War is incredibly superfluous to it. As we've ascertained, you can fall into the camp that says the UK is 'stronger' now than it was in 1900 because it's economy and military is more advanced now than it was then, or you can fall into the camp that says the UK is 'weaker' now because its economy and military is less powerful as compared to its peers now than it was then. I fall into the second category because I'm not sure why the first matters. Back to the "tall analogy" I talked about a page or two ago.

JAD_333
16 Feb 10,, 10:06
...That the US's strength is declining in an increasingly multipolar world, because it's share of the pie is decreasing.

Thank you for restating your contention.

Yes, of course, as more countries come into their own, previously dominant ones will grow relatively less dominant.



All of this talk about detente and the USSR increasing or decreasing in strength during the Cold War is incredibly superfluous to it. As we've ascertained, you can fall into the camp that says the UK is 'stronger' now than it was in 1900 because it's economy and military is more advanced now than it was then, or you can fall into the camp that says the UK is 'weaker' now because its economy and military is less powerful as compared to its peers now than it was then. I fall into the second category because I'm not sure why the first matters. Back to the "tall analogy" I talked about a page or two ago.

I have no doubt that one can be struck by the dynamics of it all and find that others are not. You have to make allowances for the fact that OEO and Shek are inveterate students of history, as are many here. They're aware of the dynamics of which you speak. It's just that some of us come to an awareness of the dynamics sooner than others and are inclined to say, so what? We're not going to turn off the lights because somewhere down the road everything might be rearranged in the community of nations.

Statisticians have a term called 'naive projection' which is a prediction of where we will be at any given time in the future if everything continues the way it is going now. As expected, the projection changes all the time because of unexpected events.

Your contention is a 'naive projection'. (I don't mean you are naive.) It is so because you are tuned to a trend, but can't know the future. We are all naive about the future. We predict, and we're either right or we're wrong. But in the meantime, we just keep trucking. :)

Shek
16 Feb 10,, 12:29
OWO,

You asked several posts back why I stated “no,” and the answer to that is that you created yet another strawman by stating what you thought I thought. That wasn’t what I was thinking when I posted.

Next, your 7’0 analogy is overly simplistic because it’s only a single dimension. It’s illustrative within that single dimension, but not so much beyond (although you can loosely apply it). Celebrity death match – Manute Bol vs. Shaquille O’Neal. Who are you betting on? My money’s on Shaq, the shorter person by 6”.

Why do I bring this up? Because you’ve poorly defined your arguments and terminology across this entire thread. That’s why you’ve got JAD asking whether you’re arguing along primarily economic lines and finally understands your argument five pages into the thread. IIRC, you completely ignored the military dimension of power, and then dismiss it when OOE brings it up. You argue zero sum for about two pages, incorrectly applying game theory (both before and after this stretch) while doing so, before making it explicit that you’re arguing about relative power within the entire system. You ask me the broadest of questions to which I could answer just about anything and be correct, and then want to tell me I’m wrong because I didn’t answer the question you didn’t ask.

You also tend to avoid questions. You still haven’t explained how out of one side of your mouth, you mark the apex of US power as 1945, a time marked by a multi-polar or bi-polar world, and then out of another side, argue that moving to a uni-polar world is an increase in power. The US was a uni-polar power in the wake of the Cold War, so how is it that 1945 was the apex of US power (this is the third time I’ve addressed/asked this – will you respond this time?).

So back to your 7’0 analogy – power is multifaceted, and so you can’t just look at one dimension. How much do these seven footers weigh? How much do they squat? How much do they bench? What’s their 40? Etc., etc., etc.

During the Cold War, the US and the USSR both grew to 7’0. But other countries didn’t. So the US and USSR both gained power absolutely and relatively during the course of the Cold War. On the margin, US and USSR power waxed and waned relative to each other, but that distracts from the fact that they both gained power absolutely and relatively.

Old World Order
16 Feb 10,, 18:30
Thank you for restating your contention.

Yes, of course, as more countries come into their own, previously dominant ones will grow relatively less dominant.




I have no doubt that one can be struck by the dynamics of it all and find that others are not. You have to make allowances for the fact that OEO and Shek are inveterate students of history, as are many here. They're aware of the dynamics of which you speak. It's just that some of us come to an awareness of the dynamics sooner than others and are inclined to say, so what? We're not going to turn off the lights because somewhere down the road everything might be rearranged in the community of nations.

I never said or even implied that. Just stating clearly that the US' relative strength has declined and there's no reason to assume that it won't more or less continue to the point that it is another 'great power' along with several others that experience highs and lows like any other. Anything beyond that is reading into it past what I've stated.



Statisticians have a term called 'naive projection' which is a prediction of where we will be at any given time in the future if everything continues the way it is going now. As expected, the projection changes all the time because of unexpected events.

Your contention is a 'naive projection'. (I don't mean you are naive.) It is so because you are tuned to a trend, but can't know the future. We are all naive about the future. We predict, and we're either right or we're wrong. But in the meantime, we just keep trucking. :)

Well, of course if things weren't as they are now, they'd be different.


OWO,

You asked several posts back why I stated “no,” and the answer to that is that you created yet another strawman by stating what you thought I thought. That wasn’t what I was thinking when I posted.

As far as I've seen it, you're the one that's created several strawmen. Your attitude is somewhat poor. To wit:


Next, your 7’0 analogy is overly simplistic because it’s only a single dimension. It’s illustrative within that single dimension, but not so much beyond (although you can loosely apply it). Celebrity death match – Manute Bol vs. Shaquille O’Neal. Who are you betting on? My money’s on Shaq, the shorter person by 6”.

When boiling down concepts to cute little analogies, I thought "if all else were equal" is pretty standard fare.


Why do I bring this up? Because you’ve poorly defined your arguments and terminology across this entire thread. That’s why you’ve got JAD asking whether you’re arguing along primarily economic lines and finally understands your argument five pages into the thread.

I've been speaking broadly. The question was broad.


IIRC, you completely ignored the military dimension of power, and then dismiss it when OOE brings it up.

A comparatively stronger military is not exclusive to a comparatively weaker international position, is it not?


You argue zero sum for about two pages, incorrectly applying game theory (both before and after this stretch) while doing so, before making it explicit that you’re arguing about relative power within the entire system. You ask me the broadest of questions to which I could answer just about anything and be correct, and then want to tell me I’m wrong because I didn’t answer the question you didn’t ask.

Uhhh...no, I didn't incorrectly apply it. Thank you for your concern, though.


You also tend to avoid questions. You still haven’t explained how out of one side of your mouth, you mark the apex of US power as 1945, a time marked by a multi-polar or bi-polar world, and then out of another side, argue that moving to a uni-polar world is an increase in power. The US was a uni-polar power in the wake of the Cold War, so how is it that 1945 was the apex of US power (this is the third time I’ve addressed/asked this – will you respond this time?).

Sorry I missed this. The US as an economic power was strongest- comparatively speaking, remember- after the war. Politically, it was strongest after the Berlin Wall fell, but that is now slowly on the retreat.


So back to your 7’0 analogy – power is multifaceted, and so you can’t just look at one dimension. How much do these seven footers weigh? How much do they squat? How much do they bench? What’s their 40? Etc., etc., etc.

No one ever said to look at one dimension.


During the Cold War, the US and the USSR both grew to 7’0. But other countries didn’t. So the US and USSR both gained power absolutely and relatively during the course of the Cold War. On the margin, US and USSR power waxed and waned relative to each other, but that distracts from the fact that they both gained power absolutely and relatively.

And yet, as compared to the US, the Soviet Union 'shrank', basically- although not uniformly and without exception- from the late 60s on. I'm sure you're aware that one military strength is used, reactionary forces grow stronger whether they're utilized or not, so you could maybe point to the tamping down of the Prague Spring as the apex.

Officer of Engineers
16 Feb 10,, 19:31
A comparatively stronger military is not exclusive to a comparatively weaker international position, is it not?And here I do not understand your point. The Soviets grew stronger both relatively and absolutely at your point in time of after the Sino-Soviet split.

You've stated that the Soviets were burdened with an extra cost of containing China. Well, they did not shift forces from West to East. They raised new divisions. They didn't shift nukes targetting the US to China, they've added several thousand more nukes to their arsenal. What that means was that at the time, they could afford to do so and in fact did so, to the point in fact that they were strong enough to stare nose-to-nose with the US, contain China, and invade Afghanistan. And this is after the Sino-Soviet split.

Compare that with China. At the time, she less than 12 nukes and none of them were readied to be deliver, ie they were not mated to their rockets nor assigned to a bomber and none of the bomber crews even trained on how to deliver a nuke.

She had 77 divisions but only two real armies of any value and those were 100 miles behind the border.

Added to this, you've ignored the relative declines of both the US and China. The US just lost the Vietnam War and China was reeling from the Great Proliterate Cultural Revolution in which they've lost an entire generation of productivity and misspent youth.

China was more than contained. She crippled herself.

JAD_333
17 Feb 10,, 02:19
I never said or even implied that.

I said it.


Just stating clearly that the US' relative strength has declined...

We generally agreed with you. The discussion went on because it seemed worthwhile to explore how and why. You cited some milestones and whatnot, and a teacher of economics and a seasoned military officer, not to mention a nail pounder, disagreed with you on some of them. Nothing personal.



....and there's no reason to assume that it won't more or less continue to the point that it is another 'great power' along with several others that experience highs and lows like any other.

The general sweep of history bears you out. But you'd be on somewhat safer ground if you said we'll all die someday. So, I wonder; why are you reiterating an apparent inevitability?



Well, of course if things weren't as they are now, they'd be different.

You misunderstood. It's not that things would be different now if they were different, which is circular reasoning; it's that using projections of current trends to predict the future 'naively' assume that no unexpected event will derail the trend. That's a legitimate way to look at the future, but it's not infallible.

True, we can look back and see that all powers gone before the present time, rose and fell, but we cannot be absolutely certain from history that all powers henceforth will fall.

The relative strength of powers may change, but as they say around here, 'an inch is as good as a mile.' That is to say, the difference between 100 times more powerful and 1.1 time more powerful is only in degree. The top dog can still bite bad.:)

Old World Order
17 Feb 10,, 03:28
And here I do not understand your point. The Soviets grew stronger both relatively and absolutely at your point in time of after the Sino-Soviet split.

You've stated that the Soviets were burdened with an extra cost of containing China. Well, they did not shift forces from West to East. They raised new divisions. They didn't shift nukes targetting the US to China, they've added several thousand more nukes to their arsenal. What that means was that at the time, they could afford to do so and in fact did so, to the point in fact that they were strong enough to stare nose-to-nose with the US, contain China, and invade Afghanistan. And this is after the Sino-Soviet split.

Compare that with China. At the time, she less than 12 nukes and none of them were readied to be deliver, ie they were not mated to their rockets nor assigned to a bomber and none of the bomber crews even trained on how to deliver a nuke.

She had 77 divisions but only two real armies of any value and those were 100 miles behind the border.

Added to this, you've ignored the relative declines of both the US and China. The US just lost the Vietnam War and China was reeling from the Great Proliterate Cultural Revolution in which they've lost an entire generation of productivity and misspent youth.

China was more than contained. She crippled herself.

Were those courses of actions sustainable? Do you think that had a direct influence upon the degradation of Soviet society a decade a later? That is to say, yes, the Soviet Union did what you described, but they really couldn't afford to, and they paid for it down the line. If they were acting in a more sustainable, long-term manner they wouldn't have had the power to do those things at all.

Back in my physical prime I wasn't much of a runner, but I could churn out a 6:15 or so mile for an Army PT test. It defeated the purpose, though, because my second mile was going to be considerably lower. Lower to the point, in fact, that I would've been better off running 6:45 on the first mile and keeping that up for another and settling on the 13:30 two-mile time, then blowing my wad on the first mile, being spent on the second and finishing around 14 minutes.

Some, ostensibly, don't like those analogies. I find them helpful. If I couldn't keep up the 6:15 pace for as long as I needed to, did I really have the power to in the first place? Or was it just me exerting and extending myself past my limits in an ultimately counterproductive fashion? I'd propose the USSR didn't have the strength to do the things outlined- and others- and ended up failing spectacularly because of it.


I said it.

So you're saying "So what?" Okay. I'm not suggesting action or inaction beyond that. The "so what?" would be an entirely different discussion.


We generally agreed with you. The discussion went on because it seemed worthwhile to explore how and why. You cited some milestones and whatnot, and a teacher of economics and a seasoned military officer, not to mention a nail pounder, disagreed with you on some of them. Nothing personal.

As a seasoned (ex-) NCO, now an analyst, and a long-time student of international relations, I don't take things personally anymore. I don't even get personal about sports at this point.


The general sweep of history bears you out. But you'd be on somewhat safer ground if you said we'll all die someday. So, I wonder; why are you reiterating an apparent inevitability?

Well, it was the question. Some regular folk seem to believe the US just continue on unabated, perpetually living out the 50s through 90s. Others seem to think that the US is due for a catastrophic collapse into destitute. Both of which I consider so unlikely as to not be worth much thought. More likely is the US decline from the world hegemon to one of a handful of great powers. It doesn't win the hearts and minds of people loving extreme and sensationalistic viewpoints, and there's no "U-S-A! U-S-A!" or "Death to America!" in there. Just pointing out the most likely of outcomes.


You misunderstood. It's not that things would be different now if they were different, which is circular reasoning; it's that using projections of current trends to predict the future 'naively' assume that no unexpected event will derail the trend. That's a legitimate way to look at the future, but it's not infallible.

No, I didn't misunderstand, I was just being irreverent. Of course you're right, but we can't knowledgeably speak about unexpected events at this point- basically by definition. We can only deal with what we have now.


True, we can look back and see that all powers gone before the present time, rose and fell, but we cannot be absolutely certain from history that all powers henceforth will fall.

The relative strength of powers may change, but as they say around here, 'an inch is as good as a mile.' That is to say, the difference between 100 times more powerful and 1.1 time more powerful is only in degree. The top dog can still bite bad.:)

The US declining wouldn't necessarily mean that it wasn't still the top dog and I didn't mean to imply otherwise.

Shek
17 Feb 10,, 04:23
A comparatively stronger military is not exclusive to a comparatively weaker international position, is it not?

No, it's not exclusive. OOE's example of a large but ineffective PLA is an example of your proposition.


Uhhh...no, I didn't incorrectly apply it. Thank you for your concern, though.

Actually, yes. You spoke about how game theory demonstrated your zero sum game concept. The only specific game you've spoken to is the prisoner's dilemma. This is not a zero sum game. Your Nash equilibrium is typically a negative sum game - both sides are worse off because of the dominant strategies of both sides. Your preferred outcome is typically a positive sum game. An iterative prisoner's dilemma of unknown length through backwards induction given a tit-fot-tat strategy will result in coordination that leads to the best individual and collective outcome (misperceptions require a revised tit-for-tat strategy, both of which will reduce the positive sum, but it's positive sum nonetheless), or if you can design a commitment device to prevent defection will result in cooperation and then your typical positive sum game. Any way you cut it, prisoner's dilemma doesn't demonstrate zero sum outcomes in and of itself.

It is also argued that behavior in the system follows the stag hunt game, where the payoffs are all positive sum, with failed cooperation making it less so and sustained cooperation more so.

It is possible that you can have a zero sum game in game theory, but this possibility doesn't then translate to validate your zero sum power system. In your prisoner's dilemma scenario, you end up with a zero sum in relative power simply because you've defined a closed system of relative positions.

So yes, you've applied game theory incorrectly across this thread. You use of the prisoner's dilemma to illustrate the security dilemma is a correct application, though.



Sorry I missed this. The US as an economic power was strongest- comparatively speaking, remember- after the war. Politically, it was strongest after the Berlin Wall fell, but that is now slowly on the retreat.

In relative terms, I'd agree to both.


And yet, as compared to the US, the Soviet Union 'shrank', basically- although not uniformly and without exception- from the late 60s on. I'm sure you're aware that one military strength is used, reactionary forces grow stronger whether they're utilized or not, so you could maybe point to the tamping down of the Prague Spring as the apex.

I'd agree with the first half of the statement in terms of economics, but I wouldn't agree militarily or overall. The Soviets achieved nuclear parity and made advances to where their military technology was rival to ours, and given that quantity has a quality of its own, were in a very strong position in Europe. Also, while their economic power shrank compared to the US, they still grew, and so in terms of compared to the rest of the world, I'd state that their power still grew.

As to the sustainability of Soviet military spending, it was conceivably sustainable. We apply a hindsight bias that sees an economic collapse that precipitated a lose of internal control, but this is because we know that the bottom dropped out of the price of oil, which then made it unaffordable (see the drop in planned Russia military activity two years ago) and spurred Gorbachev to attempt drastic reforms. Take away the combination of Gorbachev and a drop in oil prices, and we could see a much different outcome and the analysis they were already losing power might seem silly.

Were they pushing the limits of spending given the bankruptcy of socialism? I'd agree to that proposition, and if left them vulnerable to swings in oil prices. But China is an instructive case here, because we can see how a socialistic economic system has been transformed to a capitalistic economic system while still maintaining communism as the form of government. This is one of the potential paths of the USSR left unseen because all we can see now is the sudden collapse. If the butterfly had flapped its wings just a little bit differently . . . if Gorbachev had been able to institute some market reforms without an oil price bubble bursting, our analysis could be completely different.

Officer of Engineers
18 Feb 10,, 05:39
Were those courses of actions sustainable? Do you think that had a direct influence upon the degradation of Soviet society a decade a later? That is to say, yes, the Soviet Union did what you described, but they really couldn't afford to, and they paid for it down the line. If they were acting in a more sustainable, long-term manner they wouldn't have had the power to do those things at all. But a decade later was not your point in time. The point in time was the Sino-Soviet split.

However, no, the Chinese did not directly influence the degradation of Soviet society. The Chinese turned inward under Deng Xia Peng and did not directly challenge the Soviet war machine up north. There was no arms build up and in fact, the complete opposite, the Chinese withdrew 100 miles from the border in effect ceding 100 miles of territory in any event of war.

Also, it was not the Sino-Soviet confrontation that collapsed the USSR. It was the NATO-Warsaw Pact and the arms race that caused the USSR to fail in keeping up. The Soviets enjoyed complete military technological superiority over the Chinese who did not, could not, and has not caught up, not even today.

Old World Order
18 Feb 10,, 07:55
No, it's not exclusive. OOE's example of a large but ineffective PLA is an example of your proposition.

More or less.


Actually, yes. You spoke about how game theory demonstrated your zero sum game concept. The only specific game you've spoken to is the prisoner's dilemma. This is not a zero sum game. Your Nash equilibrium is typically a negative sum game - both sides are worse off because of the dominant strategies of both sides. Your preferred outcome is typically a positive sum game. An iterative prisoner's dilemma of unknown length through backwards induction given a tit-fot-tat strategy will result in coordination that leads to the best individual and collective outcome (misperceptions require a revised tit-for-tat strategy, both of which will reduce the positive sum, but it's positive sum nonetheless), or if you can design a commitment device to prevent defection will result in cooperation and then your typical positive sum game. Any way you cut it, prisoner's dilemma doesn't demonstrate zero sum outcomes in and of itself.

It is also argued that behavior in the system follows the stag hunt game, where the payoffs are all positive sum, with failed cooperation making it less so and sustained cooperation more so.

It is possible that you can have a zero sum game in game theory, but this possibility doesn't then translate to validate your zero sum power system. In your prisoner's dilemma scenario, you end up with a zero sum in relative power simply because you've defined a closed system of relative positions.

So yes, you've applied game theory incorrectly across this thread. You use of the prisoner's dilemma to illustrate the security dilemma is a correct application, though.[/quote]


Actually, no. I never conflated zero sum and the prisoner's dilemma. Somehow, you thought I was.


In relative terms, I'd agree to both.

Glad to be in agreement.


I'd agree with the first half of the statement in terms of economics, but I wouldn't agree militarily or overall. The Soviets achieved nuclear parity and made advances to where their military technology was rival to ours, and given that quantity has a quality of its own, were in a very strong position in Europe. Also, while their economic power shrank compared to the US, they still grew, and so in terms of compared to the rest of the world, I'd state that their power still grew.

As to the sustainability of Soviet military spending, it was conceivably sustainable. We apply a hindsight bias that sees an economic collapse that precipitated a lose of internal control, but this is because we know that the bottom dropped out of the price of oil, which then made it unaffordable (see the drop in planned Russia military activity two years ago) and spurred Gorbachev to attempt drastic reforms. Take away the combination of Gorbachev and a drop in oil prices, and we could see a much different outcome and the analysis they were already losing power might seem silly.

Were they pushing the limits of spending given the bankruptcy of socialism? I'd agree to that proposition, and if left them vulnerable to swings in oil prices. But China is an instructive case here, because we can see how a socialistic economic system has been transformed to a capitalistic economic system while still maintaining communism as the form of government. This is one of the potential paths of the USSR left unseen because all we can see now is the sudden collapse. If the butterfly had flapped its wings just a little bit differently . . . if Gorbachev had been able to institute some market reforms without an oil price bubble bursting, our analysis could be completely different.

That's interesting and I agree to a point. The stark difference, though, is that China didn't extend itself- at all, really- far past the constraints of its economy. Even after doing that, there's time to regroup and consolidate power before that economic stress really hits society. The Soviet Union pushed beyond that, too. To mix metaphors, I really think the die was cast well before all the players in the USSR turned over their cards in the late 80s. One or two mistakes would've been surmountable and yes, could've led to a 'Russian miracle' that China could've just emulated instead of trailblazing upon/into. But I think there were too many for oil prices or such to have such an effect on.


But a decade later was not your point in time. The point in time was the Sino-Soviet split.

If you do something that you can't afford to do and down the road you lose your house or something, the matter of the fact is you couldn't afford to do what you did, whether it bites you in the as the next day or ten years from now is irrelevant.


However, no, the Chinese did not directly influence the degradation of Soviet society. The Chinese turned inward under Deng Xia Peng and did not directly challenge the Soviet war machine up north. There was no arms build up and in fact, the complete opposite, the Chinese withdrew 100 miles from the border in effect ceding 100 miles of territory in any event of war.

And yet, the Soviet Union still spent substantial amounts of capital standing up units and sending them east, regardless of the facts occurring with the PRC.


Also, it was not the Sino-Soviet confrontation that collapsed the USSR. It was the NATO-Warsaw Pact and the arms race that caused the USSR to fail in keeping up. The Soviets enjoyed complete military technological superiority over the Chinese who did not, could not, and has not caught up, not even today.

An arms race, of course, that was exacerbated by having to send some of those arms to deal with a threat that didn't exist in the late 40's to early 60's. I never said China was the main reason. I said it was a contributor to the loss of Soviet power.

Freeloader
18 Feb 10,, 08:27
Now, to default on the debt would be stupid, as it'd shoot the credibility of the dollar and harm our interests, but we don't even need that threat to maintain leverage over the Chinese. Instead, it's a situation similar to the recent financial crisis, where the banks were bailed out because they were too big to fail. Likewise, the Chinese see us as too big to fail, and so they did the same thing, which is buy the dollar to maintain its value.

As the saying goes, if you owe someone a little, they own you. If you owe them a lot, you own them.

Yeah, I hear this quote, and like to hope it is true in this situation. But when I read that quote in TR's autobiography (which is quite good btw) it makes me wonder how far that can go and last. As stated above by JAD 333 - they do have close to a billion people more than us (800 million or so I think roughly) so seeing some skewered numbers like a higher GDP is realistic.

But you said "to default would be stupid" which I agree with. Yet I think that exact stupid idea might be what happens in the future.

Freeloader
18 Feb 10,, 08:36
1. Once you adjust for the catch up effect of Western Europe/Asia recovering from the war, the US' share of world GDP has remained remarkable stable. Rather than "consistently losing ground," we have maintained our relative economic power, while enjoying the bountiful fruits of the positive sum game of trade that has increased our real income (and in turn, consumption) 6.5x since the end of WWII or 3x since 1969, which is the start date of my graph below.

http://4.bp.blogspot.com/_otfwl2zc6Qc/SwWyuy39ikI/AAAAAAAAL8g/Cp4XVVbTmqY/s400/worldgdp.jpg

That's an interesting graph. The EU goes down as China goes up to the effect of a mirror image practically. I wouldn't of guessed that the EU was higher than the United States by that much.

Freeloader
18 Feb 10,, 08:44
Original quote
Quote:
Originally Posted by Old World Order View Post
Canada has a historically powerful nation on a very long border- never good for business- and most of its territory is all but unsettled, some of that even inhospitable.


How do you figure? We have a huge territory full of untapped resources, fresh water, and lots of land. Our ONLY neighbour is the worlds most powerful nation, between us, more trade crosses our boarders than any other boarder in human history.

Plus, we do not have a 3rd world country on our boarder, and all of the troubles that come along with that!;)

No, you aren't pestered by Mexico. However, the United States is the better geographical location due to far greater diversity of living conditions. I would agree some of it is inhospitable. That Ice Road Truckers show on National Geographic is proof of that.

zraver
18 Feb 10,, 09:51
And yet, as compared to the US, the Soviet Union 'shrank', basically- although not uniformly and without exception- from the late 60s on. I'm sure you're aware that one military strength is used, reactionary forces grow stronger whether they're utilized or not, so you could maybe point to the tamping down of the Prague Spring as the apex.

Major disagreement here, relative Soviet power probably peaked between 74-81. Unlike the US Army the Red Army did not miss a modernization cycle. In the air the US did not yet have large numbers of the teen series so the technology in the air was close. At sea the Soviets were in the process of a massive building program and they had more than 25,000 nukes. To add to this raw power, America was in retreat (or seen to be so)- Vietnam had fallen, South Africa willing to take on the Communists was stabbed in the back by the West for political ideals, The worlds largest democracy was a virtual Soviet client, Europe and America were wracked by social divisions, and in 1979 the Soviets executed a flawless invasion of Afghanistan while America lost Iran and finally Soviet clients in Africa and South America were given vast amunts of aid giving the impression of Soviet largess.

What did the Soviets in was a combination of massive American deficit spending, Steve Jobs, a disillusioning war, a collapse in the agricultural sector and a collapse in oil prices. The Soviet agricultural system was never very good, but they only needed 2 million tons of imports in 66. By 1980 they were importing 28 million tons of grain. As long as the requirements for hard currency were going up matched oil prices things were OK, when they collapsed the Soviets were left with little reserves.

Take away any of those 2 factors and you'd probably see a Soviet state today. AS they stood the Soviets in the 80's began to rapidly unravel as they could not meet the needs to provide for her citizens, her clients, he defense in the West and East, her war in A-stan and the development of technology. Unlike America, the Soviets could not go on to the World markets and sell debt in their own currency to get the cash they needed to have their own Reagen revival.

Shek
18 Feb 10,, 12:06
That's an interesting graph. The EU goes down as China goes up to the effect of a mirror image practically. I wouldn't of guessed that the EU was higher than the United States by that much.

You have to remember that the Great Powers before World War I were all concentrated in Western Europe except for Russia. They built their economies through colonialism and so had a huge head start. Combine them together as part of the EU15, and you can see why they come out ahead of the US, even though they are all several decades removed from their prime at the start of the graph in 1969.

Shek
18 Feb 10,, 12:20
Actually, no. I never conflated zero sum and the prisoner's dilemma. Somehow, you thought I was.


It's 'zero sum' in that the whole system subscribes to game theory- it's one of the foundations that the international system post-Treaty of Westphalia is based on, even though there was no 'game theory' for most of that time.

You stated that the international system was zero sum. You used game theory as proof. Game theory is not exclusively zero sum; in fact, very few of the games are zero sum.

The only game that you've used in describing the international system to date in the post is the prisoner's dilemma. It describes some aspects of the international system well. It does not explain zero sum. In fact, it is a game that can range in predicted outcomes from negative sum to zero sum to positive sum.

I spoke to the prisoner's dilemma, the only game you've used here, precisely because it refutes your earlier claim that the system is zero sum because it subscribes to game theory. I also mentioned the stag hunt because it is the second game that is commonly used to describe behavior in the international system, and it is also not a zero sum game.

The system is zero sum in terms of relative power across the entire system (it is not zero sum otherwise) because of the way relative power across the entire system is defined, not because of any insights from game theory. Thus, the results of negative or positive sum payoffs from game theoretical game can then translate into zero sum outcomes based on relative power changes, but game theory doesn't provide the zero sum outcome - the definition does. It only gives you insights into who will win or lose in this zero sum translation, even though the payoff will almost always never actually be zero sum.

Shek
18 Feb 10,, 12:34
To mix metaphors, I really think the die was cast well before all the players in the USSR turned over their cards in the late 80s. One or two mistakes would've been surmountable and yes, could've led to a 'Russian miracle' that China could've just emulated instead of trailblazing upon/into. But I think there were too many for oil prices or such to have such an effect on.

Two articles for consideration, one of which was just published yesterday

http://www.aei.org/issue/25991
http://www.strategicstudiesinstitute.army.mil/pubs/display.cfm?pubID=967

Timing is critical here - give Gorbachev another decade to reform the economy, to include the agrarian sector, and you don't have to drastically cut funding to the military and take actions that eventually lead to the 1991 coup and result in the break up of the USSR a year later. Did the bankruptcy of communism contribute - absolutely. However, I believe the better metaphor here is to look at financial crisis and when the end comes, it comes fast, and institutions that are often sound in the mid- to long-term aren't in the near-term because of liquidity issues, and so they caught up in the tsunami and are washed away with the rest.

If you could replay history from 1985-1992 100 times (or 1000 times, it doesn't matter, the point is that we only saw one particular realization of history that could change completely with a minor tweak of some of the variables), I don't see the implosion of the USSR being that certain of a thing.

SMJ
01 Mar 10,, 15:53
Of course the US can be toppled over night. If the US dollar is devalued, and has it's credit rating reduced. Things could change that quickly. It's no joke, and no exaggeration. If anything China would replace the USA as the major super power, being that is a creditor nation with capital goods production. Creditors save their money, hence why they are able to lend it out. USA is broke, and if the situation continues, it's only a matter of time before the USA topples greatly from it's pedestal.

Officer of Engineers
01 Mar 10,, 16:04
Have you even read this thread?

SMJ
01 Mar 10,, 16:08
Not necessarily. If history is our guide, a new superpower will replace the US someday. But not for some time. If statistics are a guide, economically the US is already #2, behind the EU, but we know very well that this is aggregation of 28 otherwise sovereign states using a common currency.

GDP in trillions $$
— European Union 18,387,785[4]
1 United States 14,441,425
2 Japan 4,910,692
3 China 4,327,448h
4 Germany 3,673,105

China is still a distant 3rd to the US. Japan which grew by leaps and bounds throughout the 1960-70s slowed percentage wise, but still exceeds China. Both were/are heavily dependent on US markets.

Percentage growth is always high for a country emerging from undeveloped status because it is starting from a low point. That is China is today.

Thus, it would take 8% per percent in dollar growth in China's economy to equal 2-3 percent for the US (2008 figures).

Even if China grew at the rate of 25% of its 2008 GDP every year it would take 10 years for it to catch up with the US. That is, if the US stood still.

China is not the US's banker it would seem to be. It holds around $800 billion in US debt. Japan is close behind. Total US debt stands at around $10
trillion, or 10 times what China holds.

US debt is estimated to grow to 101% of GDP by 2011 or $14 trillion before decreasing. Our economic woes are to blame, not China. When our financial institutions are stabilized, stimulus spending is no longer needed, and industry regains it previous pace, then we'll see better how China stacks up to the US.



Americans are proud of being number 1 in the world economy. Were they to lose their position, I suspect they would accept it, albeit grudgingly. But "step aside" is not how I would characterize it. We're not going to bow out of the game, if that is what you mean. On the other hand, being number 1 always is not a goal I would consider worthy of pursing for its own sake. War simply to remain on top is out of the question.



Strengthen our capital markets; create effective financial controls; keep business taxes low as possible; negotiate effective international copyright and patent protections for intellectual property; innovate, innovate...




Democracy is not worldwide. I believe we should do what we've always done, with occasional lapses, and that is to encourage democracy where it does not exist without imposing it and to serve as an example of it in action. Democracy helped makes the US a superpower; it ought to serve the US well in remaining so, whether we are the strongest or among the strongest superpowers.

You must understand that the USA is funded by debt, and that the private sector is simply collateral to US government obligations. It depends on the decision of the creditors, not the US government. Since China saves money, they have money to buy up US assets, not just treasuries, but actual hard assets. USA is declining, because it can't compete productively. The US economy is overwhelmingly service sector, government sector, and consumer spending. If the consumer spends money to buy Chinese goods, that's included in the GDP. Imports. If central bankers, and world governments don't value the US dollar as much, nobody is going to export to it, and all these government unfunded liabilities will tank, and creates the possibility of the US government to print up money to pay for it all resulting in inflation.

Democracy didn't make the USA a superpower, it was liberty, or freedom. Democracy is a mob rule of despots who want to control the masses. Hence why even a democracy has a Constitution that limits the democracy's power.

Officer of Engineers
02 Mar 10,, 16:33
USA is declining, because it can't compete productively. The US economy is overwhelmingly service sector, government sector, and consumer spending.That is a whole bunch of crock. Aviation and pharmasuticals are two areas of which the US still dominates and these are high profit margin items, not razor thin survival pennies that dominates China.

In either case, go away.

Herc the Merc
06 Mar 10,, 14:17
In 2009 it won most of the nobels and Bloom Energy just got attention in Bay area CA. Whats changing is America culture from IBM type cradle to grave jobs to a innovation driven, high risk casino type economy. WE will not decline purely as no one else can get crazier than us. And remember the saying-"there is a thin line between insanity and genius". Living in America is like playing Craps. Have fun.

Herc the Merc
06 Mar 10,, 20:09
1) Unemployment may persist at high levels upto 2018
2) We may have a double dip recession with very high inflation (not hyper though.
3) Maybe Republicans win in 2012 (unlikely though as their candidates lack national appeal beyond Mitt Romney, some others -I shudder -are purely running appealing to the religious sentiment of Americans and they alienate to mny other voters so they won't win), but Obama still has resiliency.
4) The dollar may devalue against foreign currencies sharply- hey folks come on down to Sunny California and Vegas -spend ur money. The Chinese will buy whatever they want her- WELCOME China(I find it laughable that there is an element that thinks China is going to try and compete with USA, it will just buy it - a golf course at a time. Too which I say just trim the greens right please.)
5)A load of Americans may leave the country for jobs (whats wrong with that? hello world.)
6) The government can convert $15trillion in private pension funds to fund its deficts. Here is where people will be pissed.

By an large as an American I would prepare for this by saving money, and perhaps consider overseas jobs. Whats the big deal, and oh invest in buying Gold and Silver as paper currencies devalue to 0. KISS.

cdude
07 Mar 10,, 00:20
In 2009 it won most of the nobels and Bloom Energy just got attention in Bay area CA.

I agree most of what you say. But Bloom Energy is all hype no substances. John Doerr is just looking for some quick returns on the IPO of the company. Look at the media hype before the launch. And people have done a lot maths and the conclusion is that this thing is not going to be worth the investment EVEN with the subsidies.
These two articles summarize up what it's about and the comment section are very informational.


An Open Letter to John Doerr Regarding Bloom Energy*:*Greentech Media (http://www.greentechmedia.com/articles/read/an-open-letter-to-john-doerr-re-bloom-energy/)

Why is Bloom Energy Lying to Us? (http://www.ecogeek.org/efficiency/3084-why-is-bloom-energy-lying-to-us)

Herc the Merc
07 Mar 10,, 02:30
Thats something to consider, also note Cloud Computing conference in Santa Clara convention center mid March.

cdude
07 Mar 10,, 03:43
Thats something to consider, also note Cloud Computing conference in Santa Clara convention center mid March.


Silicon Valley is not what it was even 10 years ago. Too many wannabe high tech startups that are focused on quick internet money. The giants HP, IBM are cutting the fundamental research.

Think about it. Nobody in China can do what Intel, or Microsoft does today. But although not as good, Baidu, Kaixin and whatever are China's Google, facebook and twitter.

Crocodylus
07 Mar 10,, 06:59
The man who trades freedom for security does not deserve nor will he ever receive either.

- Benjamin Franklin

Here is a Forbes.com article that I found on Yahoo!News



America's Richest Counties
by Francesca Levy
Friday, March 5, 2010


The country's fattest paychecks are brought home to these high-end suburbs.

The country may have started its long haul back to economic recovery -- if recent news that consumer spending increased slightly in January is any indication. But even so, most Americans still aren't ready to brag about their paychecks.

Except, perhaps, in Loudoun County, Va., where median household incomes are higher than anywhere else in the country. This affluent suburb of Washington, D.C., where families take home a median $110,643 annually, tops our list of America's 25 richest counties.

Loudoun is emblematic of the counties where the highest incomes are found. The country's riches tend to trickle away from big cities. It's not major metro areas raking in the biggest salaries; rather, it's the tony suburbs just outside big-industry centers that soak up big-city money.

Glitzy Southern California and big oil states are largely absent from the list: 19 of the 25 richest counties in the country are on the East Coast. In part, that's because our list looks at the middle incomes, and counties in the East tend to be smaller, thereby allowing for less of a spread between the richest and poorest workers.

Data for our list come from the U.S. Census Bureau, which conducts the annual American Community Survey, a smaller-scale version of the decennial census. The most recent data are from the calendar year 2008 and include 1,889 counties.

Wealth Radiates From the Capital

It's not surprising that workers in Loudoun do well. The federal government generates a wealth of jobs, keeping unemployment in the D.C. metro area at a low 6.2% (the national average is still near 10%). The best-paid workers from D.C. take their money home to Loudoun, where jobs have grown 4% between the second quarter of 2007 and the second quarter of 2009, according to the Bureau of Labor Statistics.

But a big chunk of that healthy income goes toward maintaining the good life. Loudoun homeowners pay a median $4,844 per year in property taxes. Tax burdens are similarly high in a lot of well-off counties.

Like Loudoun, a number of the country's wealthiest households are tightly concentrated in counties around the nation's capital. Six of the richest counties lie on the outskirts of Washington: Fairfax County, Va., Arlington County, Va., Stafford County, Va., Prince William County, Va., Charles County, Md., and Alexandria City, Va.

Not far from D.C. lies another cluster of wealthy counties. Howard County, Md., a suburb of Baltimore, has a standout school system with standardized test scores that consistently beat out the national average, and median household incomes of $101,710. In nearby Montgomery County, where 59% of residents over 25 have an advanced degree, households bring in a median $93,999. Historic Calvert County, Md., has profited from its roots as a tobacco-rich farmland as well as its proximity to Washington, D.C., and Baltimore, and claims a median income of $89,049.

Big Apple, Big Incomes

The suburbs of the New York area reap the benefits of the big city's financial industry. Six of the wealthiest counties in the country -- Hunterdon County, N.J., Somerset County, N.J., Morris County, N.J., Nassau County, N.Y., Putnam County, N.Y. and Suffolk County, N.Y. -- are all part of the New York metropolitan area.

These counties may be knocked a few rungs down the list when the next American Community Survey is released later this year. The new data will reflect incomes for 2009, when the near-collapse of Wall Street stripped many families in the city -- and its wealthy outlying suburbs -- of their paychecks.

While big-city life may seem glamorous, the rule that it's the boring old 'burbs outside of moneymaking metros where the highest incomes are found also applies far beyond the East Coast. Median incomes are highest in counties outside big cities driven by growth industries such as health care, technology and government.

Counties No. 18 and 19 on the list are two wealth centers in California: Marin County and Santa Clara County. Picturesque and stylish Marin offers scenic vistas, health care industry and technology industry money -- Kaiser Permanente and Comcast are among its major employers -- and a median income of $88,101. Well-paid, highly skilled tech jobs boost the median income to $87,287 in Santa Clara.

Nashville, Tenn., suburb Williamson County and Atlanta, Ga., suburb Forsyth County are the South's only representatives--but just like the other counties on our list, they have big-city growth industries to thank for their prosperity.

Nashville may be best known for country music, but it's the heavy-hitting health care giants like Hospital Corporation of America headquartered there that account for locals' wealth. Many workers in that booming industry take their paychecks home to Williamson, which has a median income of $88,316.

Beneficiaries of the jobs that companies like UPS, Coca Cola and Delta Airlines created in Atlanta have increasingly taken up residence in Forsyth, fueling a 71% population boom between 2000 and 2008 and helping drive the area's median income up to $86,938.

It makes sense that suburban median incomes tend to beat out big cities; workers earning big metropolitan incomes look for top-tier schools and space to settle with their families, thus pulling up median incomes in small bedroom communities. It also helps if those city economies are linked to growth sectors with lots of highly-skilled workers.

Where you choose to settle tends to be an extension of how much you make, rather than the other way around.

1. County: Loudoun County, Va.

Population: 277,433
Median Household Income: $110,643.00
Percent of Residents 25 or Older with Bachelor's Degree or Higher: 58

2. County: Fairfax County, Va.

Population: 1,005,980
Median Household Income: $106,785.00
Percent of Residents 25 or Older with Bachelor's Degree or Higher: 60

3. County: Howard County, Md.

Population: 272,412
Median Household Income: $101,710.00
Percent of Residents 25 or Older with Bachelor's Degree or Higher: 60

4. County: Hunterdon County, N.J.

Population: 129,000
Median Household Income: $100,947.00
Percent of Residents 25 or Older with Bachelor's Degree or Higher: 52

5. County: Somerset County, N.J.

Population: 321,589
Median Household Income: $100,207.00
Percent of Residents 25 or Older with Bachelor's Degree or Higher: 53
I might be reading too much into the article, but having a concentration of wealthy cities near the capital does raise a question mark or three. Would this be indicative of a move towards a command economy much like what the Soviet Union had? Or is it just one more step in the evolution of a capitalist economy? (What I see these days is more like government-sponsored mercantilism than actual capitalism :mad:)

Shek
07 Mar 10,, 14:13
Here is a Forbes.com article that I found on Yahoo!News

I might be reading too much into the article, but having a concentration of wealthy cities near the capital does raise a question mark or three. Would this be indicative of a move towards a command economy much like what the Soviet Union had? Or is it just one more step in the evolution of a capitalist economy? (What I see these days is more like government-sponsored mercantilism than actual capitalism :mad:)

I'd venture to say that there's numerous things at play. Of course, if you wrote this article 200 years ago, you'd have the wealthiest cities near the capital since the East Coast was pretty much the entire US. So the leading candidate is the fact that the East Coast is your most established portion of the country and you have major transportation routes and hubs (and DC happens to be centrally located along the I-95 corridor).

Next, because of the play of politics and the role of bureaucracy in forming policy in the post World War II era, the place to be if you want to have an impact is in the DC area. Want to work in the CIA? Come to DC. Want to change careers and slide into policy at the CIA? Come get your masters degree in DC and then apply to the CIA. State? Same thing. DoD? Same thing. Etc., etc., etc. What you end up with then is a highly educated population that has a lot of human capital that can work higher paying government jobs or higher paying consulting/contractor jobs.

This is where your evolution of the economy from a manufacturing based economy to a service based economy comes into play. The internet serves as catalyst, both for the transition for the move to a service industry but also for living in the suburbs. Go live outside the urban core where you can still access the amenities of the urban core (for DC, the free Smithsonian museums, the parks and green spaces, the access to historical sites such as Mt. Vernon or all the major Eastern Theater battles of the ACW within 90 minutes of DC) while still being able to live where there's more land/house for the dollar because you can telecommute to work.

BTW, I live in Fairfax County, and in my particular neighborhood, we're one of the few single income families. Fairfax is attractive because of what I stated above plus access to good schools, county services, recreation centers/parks, and by and large keeps a lid on crime (there are some bad neighborhoods, but nothing compared to inner city crime rates elsewhere and it remains confined). We're willing to pay the $6K/year in property taxes because of what we save in commute time (no telecommuting for us) and because we feel we get good return for what we pay.

Freeloader
08 Mar 10,, 03:10
One point earlier was that China is still well behind us in many areas, so "no worries for now" more or less. One point being the GDP, they are still 3rd overall (4th if you count the European Union).

In 1864, we were still in a Civil War. A mere 40 years later, we are quickly rising to become the World Superpower under the guidance of the greatest President (debatable technically, TR was top 5 certainly) we have ever had. I am not sure there was much the then power Great Britain could have done. And perhps there is not much we can do. For if history shows something - those with the biggest army and most numbers, do not take orders for long - they give them. China may not "give us orders" per se, but the possibility to have greater influence than us is a looming.

I imagine many others see the scary comparisons of how similar the United States surpassing England after they fell into debt with us, mirrors our situation with China. WE were producing more than anyone was.

Now...it is us who produces little. Solution - we need to produce more, become less reliant on others for our goods. Some way, some how, we need to produce more goods and begin utilizing the worlds 3rd biggest population more efficiently. Especially all those illegal aliens if we are gonna let them stay.

astralis
08 Mar 10,, 05:09
freeloader,


Now...it is us who produces little. Solution - we need to produce more, become less reliant on others for our goods.

US manufacturing output is at an all-time relative high. it makes no sense to produce more if it's cheaper getting it from elsewhere-- it allows us to spend our money in more productive areas.

technology and education is the way to go.

highsea
10 Mar 10,, 21:55
And yet during this golden age of US manufacturing, the percentage of manufactured goods that are imported has gone from 20% to 70%. IOW, 30% of manufactured goods that are consumed in the US are made here, and that number is declining.

Of course manufacturing jobs, those good-paying middle-class jobs, are history. It makes absolutely zero economic sense to manufacture something in the US when you can employ slave labor in third world shitholes, and suffer no penalty. You're stupid to manufacture in the US.

In the 70's they told us to go into aerospace and engineering. I did. I'm one of the lucky ones, I'll barely manage to squeeze a 30-year career out of it, but today I do mainly prototyping for overseas manufactured products, and one-offs for aerospace. No growth potential, and I certainly wouldn't advise a young person to go into my field.

In the 80's they told us to go into information technology. IT lasted about 5 years as a profitable profession, 1995-2000 was the happy time, and then the Internet allowed everthing to be sent everything overseas.

In the 90's it was banking, we were going to be a "service economy". Banking, lol. We all know how that turned out.

In the 2000's they said health care was the place to be. Health care is about to be nationalized, not sure what the future holds there.

I feel sorry for today's kids, they are facing a pretty bleak outlook.

gunnut
10 Mar 10,, 22:51
I feel sorry for today's kids, they are facing a pretty bleak outlook.

I will advise them to go into government. That seems to be a big growth area. :biggrin:

highsea
10 Mar 10,, 23:23
You're right gunnut, and it's the only growth area left that has any legs.

And that's what the Gov't wants them to do. Obama's loan forgiveness program that halves the payback if you go into "public service".

The biggest public service anyone can do in the US is tough it out in the private sector.

The US needs 3 things desperately if we are to get back on track. That is:

A National Energy Policy
A National Trade Policy
A National Industrial Policy

They all relate to each other, and without all 3 working together, we are a rudderless ship.

JAD_333
11 Mar 10,, 02:33
The US needs 3 things desperately if we are to get back on track. That is:

A National Energy Policy
A National Trade Policy
A National Industrial Policy

They all relate to each other, and without all 3 working together, we are a rudderless ship.


Highsea:

Just for the sake of discussion, what makes you think that we need government policies to "get back on track"?

With perhaps the exception of an energy policy, it seems to me unwise for government to lead the way on trade and industry. That smacks of a command economy, which as we know did the Soviets in and held the Chinese back for many years.

But of course it all depends on what you mean by policy.

When left alone, private enterprise does a pretty good job of finding opportunities to make money. The only policy role I can see for the government is to get out of the way, i.e., keep regulation and taxes to a minimum and keep the credit market healthy.

Abroad is a different matter. I've heard foreign service officers say that 60-70% of what most of our embassies do abroad is helping US companies in their dealing with foreign governments. That's good policy IMO.

highsea
11 Mar 10,, 02:58
I'm saying that there needs to be clear direction that only the Gov't can provide.

Trade policies should provide equal access to markets- our carmakers can't import cars to Korea, but Korean carmakers have unlimited access to the US market. You can't open a GM dealership in Tokyo. Our "free trade" policies are one-sided, and disadvantage US companies that could otherwise compete globally. You can't do business in China without a JV that leaves 51% under their control. But we will sell any US company to China lock,stock, and barrel.

We need an industrial policy that insures US manufacturing doesn't die completely. We've lost a generation already, there is a need to maintain the capability to build ships, airplanes, etc to support National defense. If it's bad to import our energy, why isn't it bad to import all our manufactured goods?

We need an energy policy so that companies know where to invest. We've said we are going to move away from oil, but what are we going to move to? Where will the infrastructure investment be? Electricity? Natural Gas? Hydrogen? The carmakers can support any one of those, but they have to know which it will be. You can't spend billions developing electric cars if the grid won't support the load. Can't develop fuel cell cars if there won't be any way to get hydrogen. We have an existing infrastructure around oil, so we keep making gasoline powered cars.

We need to know what the nuclear component will be. What's the point in training a new generation of nuclear engineers if there won't be any new reactors built? We're running out of nuclear power people, they are all retiring. Who will run the power plants if we do build them?

It's nice that the Congress spends their time naming post offices and such, but there is some serious work to be done as well.

astralis
11 Mar 10,, 03:21
highsea,


I feel sorry for today's kids, they are facing a pretty bleak outlook.

that's the way of the modern economy. given the fact that there's 6 billion people out there and only 5% reside of that reside in the US, i don't expect field dominance anywhere to last over a decade.

in any case, considering that manufacturing jobs have been a relatively small part of the US economy for the last twenty years, it's not as big a bulwark of the middle-class as you put it here.


We've lost a generation already, there is a need to maintain the capability to build ships, airplanes, etc to support National defense. If it's bad to import our energy, why isn't it bad to import all our manufactured goods?

like i said, manufacturing output is at an all-time high. these arguments are the same as the people whom noted in the early 20th century that US agricultural jobs (middle-class of the time) was falling dramatically, even as US agricultural output was booming. i suspect we'll live.

Freeloader
11 Mar 10,, 03:31
freeloader,

US manufacturing output is at an all-time relative high. it makes no sense to produce more if it's cheaper getting it from elsewhere-- it allows us to spend our money in more productive areas.

technology and education is the way to go.

I certainly do not disagree with the last part. Energy - yes (I think Thorium for nuclear power research needs serious consideration)but Education is more than a financial fix IMO.

However, the importing may be cheaper, but it also has an effect of making us reliant on others that doesn't sit well with me. Moreover, my understanding was that some of that importing was with Chinese goods, and some of it leads to imbalanced trade with China, this causing a negative effect on the deficit.

We were once the World leaders for exporting. That is no longer the case.

highsea
11 Mar 10,, 03:49
March 1, 2010

The President
The White House
Washington, D.C. 20500


Dear Mr. President,



The global economic crisis poses new challenges to American manufacturing. The U.S. manufacturing sector is the world’s largest, but it will not remain so unless our nation acts, and acts now, to reverse its decline. The loss of manufacturing plants and jobs has stifled economic opportunity for middle class families and compromised our ability to compete in the 21st century economy. Indeed, for the last several decades, administrations have passed up critical opportunities to formulate a rational and comprehensive manufacturing policy. Continued apathy will undermine our country’s ability to achieve energy independence and place our military readiness at risk.



We are convinced that the recovery and long-term health of our economy depend on a strong, competitive U.S. industrial manufacturing base. Therefore we appreciate your release late last year of “A Framework for Revitalizing American Manufacturing.” The framework represents a thoughtful approach to recognizing manufacturing’s importance to the middle class, our energy security, and our national defense.



In particular, we agree with many of the basic strategies for reinvigorating U.S. manufacturing as outlined in Section III of the framework. Developing a highly skilled and productive workforce, investing in new and emerging technologies, ensuring stable capital markets, providing support for communities in transition, strengthening infrastructure, improving market access for U.S. exports, and fostering entrepreneurial talent are all significant elements of an integrated policy strategy.



Without an adequate commitment of resources and coordination among every executive branch department, we are afraid that the tenets of this framework may not be appropriately fulfilled. We would therefore respectfully request additional information about how the Administration is putting these strategies to work, including specific goals, detailed initiatives supporting those goals, and performance measures to help ensure continuous progress.



We recognize that moving forward promptly to support manufacturing companies and workers can speed America’s recovery. Historically, the manufacturing sector has led the American economy out of recession. For instance, the auto industry contributed significantly to the economic recovery following the recession of the early 1980s. Today we need a multi-industry strategy to propel job and economic growth, one that deploys federal resources and private-public partnerships to promote emerging manufacturing opportunities.



Today, nothing is more imperative than putting Americans back to work. We believe it will take a coordinated effort to assist America’s entrepreneurs, innovators, and workers by advancing policies that enhance U.S. manufacturing, increase U.S. competitiveness and export opportunities, and protect the quality of life for all Americans.



We look forward to working with you to promote U.S. manufacturing on behalf of working families and the manufacturers who employ them, and in support of our nation’s continued global leadership.



Sincerely,



Sherrod Brown
United States Senator

Lindsey Graham
United States Senator

Christopher J. Dodd
United States Senator

Olympia J. Snowe
United States Senator

Debbie Stabenow
United States Senator

Thad Cochran
United States Senator

Jack Reed
United States Senator

Carl Levin
United States Senator

Robert P. Casey
United States Senator

Jeff Bingaman
United States Senator

Sheldon Whitehouse
United States Senator

astralis
11 Mar 10,, 04:41
freeloader,


However, the importing may be cheaper, but it also has an effect of making us reliant on others that doesn't sit well with me. Moreover, my understanding was that some of that importing was with Chinese goods, and some of it leads to imbalanced trade with China, this causing a negative effect on the deficit.

We were once the World leaders for exporting. That is no longer the case.



the trade deficit is a separate issue from the overall deficit, and is connected to various factors such as the strength of the dollar and relative/absolute advantages in goods.

generally, expounding exports while limiting imports is an economic strategy known as mercantilism and hasn't been in the vogue since the 16-17th centuries. trade deficits simply demonstrate that foreigners believe your country is a good place for investment, among other things. if this were not true, then the 30s would have been a boom period-- the US was consisting running trade surpluses then.

i agree there'd be reason for concern if we were giving away the shop in a mania for globalization, but as i said to highsea, increasing manufacturing output and the fact that exports/imports in general do not make up that big a part of our economy should let you know that this isn't happening. simply put, the internal US market is so big that turning into a HK or a Singapore just isn't in the cards.

highsea
11 Mar 10,, 18:02
...these arguments are the same as the people whom noted in the early 20th century that US agricultural jobs (middle-class of the time) was falling dramatically, even as US agricultural output was booming. i suspect we'll live.The problem with your analogy is that agricultural jobs declined as a result of industrialization- farming got more efficient with new farm machines and better understanding of farming processes. It's not the case that the US suddenly started importing 70% of it's food and then displaced millions of workers because it was cheaper to buy food from other countries. We still produced enough food domestically to meet the demand, and we still do today.

The US consumption of manufactured goods has not declined, it has risen. We are just importing a lot more than ever before. Manufacturers are more efficient, and productivity per worker is up as a result, just like farming. But in the case of farmers, they had a place to go- they could go to the cities and get factory jobs. The offshoring of manufacturing jobs in the US has left millions of people with nowhere to go.

I don't care that the US has only 5% of the worlds population, that's no reason to drag ourselves down to some "global mean" via bad trade policies that punish American workers for the crime of being Americans..

astralis
12 Mar 10,, 01:41
highsea,


manufacturers are more efficient, and productivity per worker is up as a result, just like farming. But in the case of farmers, they had a place to go- they could go to the cities and get factory jobs. The offshoring of manufacturing jobs in the US has left millions of people with nowhere to go.


how true is this? despite the fact that manufacturing jobs have been relatively declining since the 70s and absolutely declining since the 80s...we had historically low unemployment rates from 1994-2008.

it took a historically devastating recession that wiped out trillions to raise unemployment to the levels they have now, which is approximately the average historical level of western europe. as the economy recovers, we will go to unemployment rates higher than what we got used to during the boom times, but by no means outside the US historical median.

people are finding jobs outside of manufacturing, and have been for the last twenty-thirty years. outside the emotional attachment anyone has for their employment field, why the fixation on manufacturing? ultimately, the main driver of the shrinking manufacturing job base isn't so much trade policy (although certainly globalization is a major part), but improved technology. that's a fact of life, and one of the rare ones which is a -good- thing.

JAD_333
12 Mar 10,, 03:41
[QUOTE]I'm saying that there needs to be clear direction that only the Gov't can provide.

If you mean trade agreements, which usually have to do with market access and lower tariff rates, I agree. Government needs to do this and the US Trade Rep has negotiated deals, one with S. Korea that would have phased out tariffs on US auto imports, but the Senate (Max Baucus) refused to approve it because it did not lift the ban on US cattle imports. We have deals with Columbia and other countries languishing in Congress for similar political reasons.


Trade policies should provide equal access to markets- our carmakers can't import cars to Korea, but Korean carmakers have unlimited access to the US market.

US autos are not banned in Korea, they simply cost too much there because of tariffs. But on the other hand the US is main provider of car parts to the Korean big 3 automakers. Things aren't always as simple as they seem. Labor opposes the US-Korean Trade Agreement last negotiated in 2007 because they fear US automakers will set up plants in Korea that will take jobs from US auto workers.


You can't open a GM dealership in Tokyo.

GM has dealerships there and plans to add more. Sales were the problem not dealerships. GM sales sank from 50k annually a few years ago to 2,000 units a year. They now hope to double sales by 2011. Oh Boy...4,000 units.



Our "free trade" policies are one-sided, and disadvantage US companies that could otherwise compete globally. You can't do business in China without a JV that leaves 51% under their control. But we will sell any US company to China lock,stock, and barrel.

Developing economies are in the habit of requiring foreign companies to partner up with nationals. That's to prevent profits from leaving the country. The idea is to promote reinvestment and capital growth in their own economy. There are a raft of other reasons, such as it's easier to control citizens and domestic companies than foreigners and wholly-owned foreign companies. In time, this arrangement becomes counterproductive, e.g. Spain and is done away with.

Our economy is open and that accounts for much of its strength. You got the bucks you can buy a US company or open up a branch of yours here. I don't see that as an imbalance, but rather as a plus. How many people does Toyota, Honda, Michilian employ here? How much taxes do they pay?




We need an industrial policy that insures US manufacturing doesn't die completely. We've lost a generation already, there is a need to maintain the capability to build ships, airplanes, etc to support National defense.

I agree, but not as museums. The plants, shipyards etc have to produce and sell competitively. Maybe labor policies need a good once over, and so on... A policy is merely a position statement. Making it happen is another thing.



We need an energy policy so that companies know where to invest. We've said we are going to move away from oil, but what are we going to move to? Where will the infrastructure investment be? Electricity? Natural Gas? Hydrogen? The carmakers can support any one of those, but they have to know which it will be. You can't spend billions developing electric cars if the grid won't support the load. Can't develop fuel cell cars if there won't be any way to get hydrogen. We have an existing infrastructure around oil, so we keep making gasoline powered cars.

I agree with you there, but we can't stop the presses until the energy initiative finally coughs up a workable solution. For now business can only do what it has always done, seize the moment and try to divine the future. Some will succeed; some will fail. 96,000 new businesses die every year in the US... Obviously, a lot of people are trying to find a business that works.



We need to know what the nuclear component will be. What's the point in training a new generation of nuclear engineers if there won't be any new reactors built? We're running out of nuclear power people, they are all retiring. Who will run the power plants if we do build them?

You can answer those questions.




It's nice that the Congress spends their time naming post offices and such, but there is some serious work to be done as well.

I would like to see Congress spend 3 months a year naming post offices and take the rest of the year off like they did in the early 1800s. We're running out of shelf space for all the laws they're passing. The current Congress has passed 134 public laws to date. Things are improving or rather partisanship is having an effect. The 101st Congress 1989-1991 passed more than 400, and none of them to name a post office.:))

JAD_333
12 Mar 10,, 04:16
highsea,



like i said, manufacturing output is at an all-time high. these arguments are the same as the people whom noted in the early 20th century that US agricultural jobs (middle-class of the time) was falling dramatically, even as US agricultural output was booming. i suspect we'll live.


Yes, and the most challenging question is how to keep output high. Agriculture solved the problem with automation. But the manpower it lost throughout the 20the century was industry's gain. The situation now is different than it was for agriculture. Farms closed down and consolidated for lack of hands, not lack of productive capacity or markets. Today, it's the opposite. Smokestack industry is shrinking and jobs along with it. There's no going back to the land. And there seems to be no rising sector to absorb all those workers. Technology was expected to take up the slack, but it appears that sector is not going to do it. We're really just thrashing around on the issue of job creation despite all political rhetoric on how to improve the situation. I don't think anyone has a fix. Maybe because there is simply no way to overcome the relative advantages other nations like China and India have over us in the current global economy. Until the pendulum swings the other way, the US will have to tough it out.

astralis
12 Mar 10,, 04:29
JAD,


And there seems to be no rising sector to absorb all those workers. Technology was expected to take up the slack, but it appears that sector is not going to do it. We're really just thrashing around on the issue of job creation despite all political rhetoric on how to improve the situation.

i donno, is this reflected in the job numbers? in 2000, at the end of the longest boom economy the US ever enjoyed, the unemployment rate was 4.0%. (this was after 20 years of declining manufacturing numbers.)

after the minor recession of 2001-2003, this rose to 6.0%, before falling to about 4.5% in 2007. this year, following the worst recession since the Great Depression, it's about 9.5%-10%, which is par on course for western europe in normal years.

this argues to me that the large majority of the working populace already adjusted to non-manufacturing jobs since its '50s-60s heyday. while it sucks that we're going to have to adjust to a medium-term future where unemployment will probably "balance out" at 7, maybe 8%, i just don't see how we're seeing this imploding middle-class with no choices now that manufacturing is no longer a dominant portion of the US economy. that's been true for thirty years now.

JAD_333
12 Mar 10,, 06:34
JAD,

i donno, is this reflected in the job numbers? in 2000, at the end of the longest boom economy the US ever enjoyed, the unemployment rate was 4.0%. (this was after 20 years of declining manufacturing numbers.)

after the minor recession of 2001-2003, this rose to 6.0%, before falling to about 4.5% in 2007. this year, following the worst recession since the Great Depression, it's about 9.5%-10%, which is par on course for western europe in normal years.

this argues to me that the large majority of the working populace already adjusted to non-manufacturing jobs since its '50s-60s heyday. while it sucks that we're going to have to adjust to a medium-term future where unemployment will probably "balance out" at 7, maybe 8%, i just don't see how we're seeing this imploding middle-class with no choices now that manufacturing is no longer a dominant portion of the US economy. that's been true for thirty years now.

I donno either. True, the manufacturing sector had been declining for some years when 2000 rolled around, but it was still big enough that it could shed 2.8 million jobs between 2000 and 2003. By 2000 jobs in the service sector exceeded the manufacturing sector by about 30 to 20%. So while manufacturing was down it was not out. Possibly what alleviated the pain was that other sectors were expanding, such as information technology and health. They may have provided employment for people who ordinarily would have gone into manufacturing a decade or two prior.

I don't know where that leaves us. My guess is that the US is undergoing an evolution in its economy that is masked by periodic upswings. The 90s boom and later the 00s boom look like anomalies driven by Wall Street. The dot.com boom was all about pumping out IPOs. The housing boom which followed was driven by a lust for mortgage-backed securities. Both of course turned into bubbles leaving a lot of people out of work. Both defy the notion of a steady-as-you-go economy, and when you remove them from the economic picture, you don't see an economy showing much real growth.

What's next? From all indications so far it appears that the folks who run the levers are seeing green, nuclear power, infrastructure renewal, and/or transportation as good candidates for major job growth.

astralis
12 Mar 10,, 14:34
JAD,


Both of course turned into bubbles leaving a lot of people out of work. Both defy the notion of a steady-as-you-go economy, and when you remove them from the economic picture, you don't see an economy showing much real growth.

sure, but it wasn't all illusory growth-- the US GDP per capita increased about 40-50% in the last 20 years. i think we could make a better point that the economic growth from 2001-2009 was -more- illusory than the growth from 1992-2001, as i argued to gunnut a while back that middle class household incomes had largely stagnated since '01.


green, nuclear power, infrastructure renewal, and/or transportation as good candidates for major job growth.

perhaps, but i don't really see any of the fields (with the exception of green) as being large enough to power the jobs expansion that will get us back to the circa-2000 job employment levels. i think we'll need to see the maturation of another big field in technology before that happens, much like it took the maturation of the computer/internet technology to get the rigorous mid-90's growth...

JAD_333
12 Mar 10,, 16:58
JAD,

sure, but it wasn't all illusory growth-- the US GDP per capita increased about 40-50% in the last 20 years. i think we could make a better point that the economic growth from 2001-2009 was -more- illusory than the growth from 1992-2001, as i argued to gunnut a while back that middle class household incomes had largely stagnated since '01.

Searching for a middle ground here, it's true not all of the growth was illusory, but the question is, to what extent is that, which was illusory a contributing factor in the current economic condition. The illusory part I see is that sizable chunk of the housing boom that came about because credit was extended to buyers who did not have the productive means to service it. If we liken the economy to a highway, that means a big stretch of it was built on ground that could not support it.

So, yes you're right. 2001 to 2009 (or rather 2007) was more illusory than the previous period.

BTW, income stagnation is indicative of a larger problem, e.g., competition within the workforce for a shrinking number of jobs.




perhaps, but i don't really see any of the fields (with the exception of green) as being large enough to power the jobs expansion that will get us back to the circa-2000 job employment levels. i think we'll need to see the maturation of another big field in technology before that happens, much like it took the maturation of the computer/internet technology to get the rigorous mid-90's growth...

Green probably offers the most employment opportunities. It's easy to train people to install high efficiency windows, insulation, and so forth. As you suggest, however, it may not be enough and we may need a new toy. On other hand maybe retrenching in sectors that never die may be the way to go for now. Agriculture, food processing, water management, heavy construction...etc. One thing we absolutely have to do is reinvigorate the small business climate. Us little guys are struggling....:)

astralis
12 Mar 10,, 18:56
JAD,


One thing we absolutely have to do is reinvigorate the small business climate. Us little guys are struggling....

yeah, definitely.

with any luck we'll be back on a boom cycle in the next ten-fifteen years; i've always wanted to open a little taiwanese cafe myself in arlington...

JAD_333
12 Mar 10,, 19:27
JAD,



yeah, definitely.

with any luck we'll be back on a boom cycle in the next ten-fifteen years; i've always wanted to open a little taiwanese cafe myself in arlington...

Sounds like a winner to me. I was booming last year and up until last week with one Taiwanese customer after another, so when you get ready to set it up let me know...have lots of references.:))

highsea
14 Mar 10,, 21:37
...Government needs to do this and the US Trade Rep has negotiated deals, one with S. Korea that would have phased out tariffs on US auto imports, but the Senate (Max Baucus) refused to approve it because it did not lift the ban on US cattle imports. We have deals with Columbia and other countries languishing in Congress for similar political reasons.You should read the tariff schedules on that pending S. Korea "free trade" agreement. There are over 400 pages of them, and the tariffs on US exports are roughly 4-10 times higher than on Korean imports for items in the same classifications. This includes cars, trucks, car parts, and hundreds of other manufactured items.

Don't know about Baucus, but I know Dingle is holding it up because he believes it penalizes US carmakers.

GM has dealerships there and plans to add more. Sales were the problem not dealerships. GM sales sank from 50k annually a few years ago to 2,000 units a year. They now hope to double sales by 2011. Oh Boy...4,000 units.I am talking practical terms- It's basically impossible to set up any new American car dealership in Japan. The Government doesn't want them.

I'll tell you this much. Historically, it has been the small manufacturers in the US that supported the big manufacturers. So it might be fine for the big players to have these deals, but the little guys are getting dead fast. And small business is 2/3 of job creation in the US, and the best wages overall were in manufacturing.

How come the Gov't talks it up about the "multiplier effect" when it comes to Federal spending of tax dollars, but never when it comes to private sector wages?

Astralis is wrong about US Manufacturing output- it peaked about 2000, and never recovered from that recession. And it's not going to. Productivity is up, but hours are down, jobs are down, output is down, and wages are flat at best.

The peak in manufacturing employment was 1979, and 1980 is when the decline began, starting with textiles. Hey, no one cared- we all had this picture in our heads of women in South Carolina sitting in front of long lines of sewing machines slaving away. Well, they are better off finding something else to do.

Since 2000, it has spread to high-tech manufactured items that are going away, and the trend is accelerating. That's your medical equipment, what was left of electronics, machined parts, etc.

And yet the US consumption of manufactured goods has risen 400%.

I used to be a big free-trader, now I'm not so sure. Because what we have isn't really free trade, it's trade engineered only for one thing- to keep consumer prices as low as they can possibly be. And if that hurts US manufacturing, that's just fine.

I just don't agree with that. I guess it's nice to buy a cheap shirt in Walmart. Not too many people like me left that will pay $80 for a shirt at Filson.

But at least I know that when I get it home I won't have to sew the buttons on.

GM's new battery plant will pay workers $14/hour. That's a bunch of new working poor in Michigan, and damn sure none of them will have the income to buy a new Chevy Volt. Maybe they will be able to sell them in Japan in those 2,000 new dealerships...

astralis
14 Mar 10,, 22:17
highsea,


Astralis is wrong about US Manufacturing output- it peaked about 2000, and never recovered from that recession. And it's not going to. Productivity is up, but hours are down, jobs are down, output is down, and wages are flat at best.

another chart for you.

http://www.federalreserve.gov/releases/g17/Current/ipg1.gif

highsea
14 Mar 10,, 23:26
Your chart shows what I said- manufacturing output (production in your chart) is down from 2000 levels. There was slow growth between 2000 and 2008, then it went off another cliff. The recovery will be even weaker this time around.

Mostly due to the manufacturing trade deficits we have been running since 2000- doubling in the last decade according to the CBO.
The United States lost 3.1 million manufacturing jobs between 2000 and 2006. Despite reasonably strong GDP growth over the past three years, manufacturing employment has not recovered. There is a widespread misperception that rapid productivity growth is the culprit for continuing job loss in the sector.

Employment growth in any economic sector is essentially the difference between growth in output and productivity (output per hour). Output growth, all else equal, spurs employment while productivity growth dampens it. The figure below illustrates why manufacturing employment has fallen so rapidly over the last three years.

Between 1989 and 2000, manufacturing output and productivity growth averaged, respectively, 3.5% and 3.9% per year. As a result, the two largely offset one another and manufacturing employment was relatively stable, as shown in the figure. Since 2000, productivity growth nudged slightly upward relative to the previous decade, increasing 4.2% per year. Output growth, however, cratered, and has averaged only 0.8% per year since 2000. Employment fell 3.2% per year as a result. In short, it is slow growth in manufacturing output—not an acceleration in productivity—that makes 2000-06 different from the previous decade and explains the steep fall in manufacturing employment.

Manufacturing job loss: Productivity is not the culprit (http://www.epi.org/economic_snapshots/entry/webfeatures_snapshots_20070221/)

Between 1965 and 2000, manufacturing employment never dipped below 16.5 million. The manufacturing sector's share of employment in the overall economy shrank over time, as net job creation happened mostly in other sectors, but the level (that is, the actual number) of manufacturing jobs, was generally stable.

Between 2000 and 2004, manufacturing dropped 3 million jobs (a 17% decline), while the trade deficit in manufactured goods rose by $164 billion (a 42% increase). This rise in the trade deficit means that an increasing share of domestic demand for manufacturing output is satisfied by foreign rather than domestic producers. The ratio of domestic output to domestic demand has fallen from 86% in 2000 to 80% in 2004. Between 1977 and 2000, this ratio averaged 95%. In other words, the manufacturing trade deficit has risen from a 1977-2000 average of 5% of domestic demand to 20% of demand by 2004. This rise coincides directly with the hemorrhaging manufacturing employment over this period, as is shown in the chart below.

Trade deficits and manufacturing employment (http://www.epi.org/economic_snapshots/entry/webfeatures_snapshots_20051130/)
These articles are a few years old, but the trend has continued. Manufacturing employment is down another 3 million jobs to about 11.5 million.

And a couple pretty pictures to match yours....

astralis
15 Mar 10,, 02:19
well, what that chart actually does show is that US output in 2007 was at an -all time high-, beating out 2000 by roughly 10%.

in the midst of the worst recession in 80 years, output fell to approximately 2001 levels, despite as you say a big bleed-off in jobs. in the year after the recession, despite a still weak market, output is back up at 2000 levels.

look, i'm not saying that domestic manufacturing isn't in a bad spot right now, but given output levels this is not some national security problem. the recession simply sped up a natural process that started with globalization and technological growth in the 80s. but given that output hasn't cratered to all hell, that means there's limits to the extent of the bleeding.

andrew
15 Mar 10,, 23:46
well, what that chart actually does show is that US output in 2007 was at an -all time high-, beating out 2000 by roughly 10%.


What’s the point to compare today’s data with your own past? It’s plain as a pikestaff that even with a modest growth in productivity you will see an overall growth in output on a long time scale. Your arguments are akin to the hot air in the Soviet textbooks. I remember as they bragged that in 1985 the daily output of the Soviet industry was more than the annual output of the industry of the Russian Empire in 1913.
But what’s the point?
Humans tend to compare their well-being not with their own great-grandfathers but with their coevals.
So it’s useful to glance at a chart showing the relative shares of world manufacturing output.

andrew
15 Mar 10,, 23:48
Notice, how similar this picture is to the times when the US overtook the British Empire.

highsea
16 Mar 10,, 00:05
well, what that chart actually does show is that US output in 2007 was at an -all time high-, beating out 2000 by roughly 10%. Think it's closer to 5%- 0.8% growth*7 years would be 5.6%.

BTW, 2007 was also the year that manufacturing imports exceeded domestic production- a real "banner year" for US mfg.

astralis
16 Mar 10,, 00:16
andrew,


What’s the point to compare today’s data with your own past? It’s plain as a pikestaff that even with a modest growth in productivity you will see an overall growth in output on a long time scale.

it's useful to see how despite a decline in manufacturing numbers, output is still growing-- which means there's still capacity and demand out there. my original point being, US manufacturing may be in relative decline but is not dead.


So it’s useful to glance at a chart showing the relative shares of world manufacturing output.

yes, it is-- it pretty much shows the medium-term evolution of US manufacturing output -closer- to the US proportion of the world populace (we're still producing three times as much as could be expected due to population numbers by 2020, though-- 5% of the world's population making 15% of the world's manufacturing output).

china, in comparison, is still underperforming, with roughly 17% of the world's population currently responsible for 15% of the manufacturing output, rising to 25% by 2020-- demonstrating that the US is still more technically efficient.

the reason why the US is discomforted is because in the past, it held both comparative (http://en.wikipedia.org/wiki/Comparative_advantage) and absolute (http://en.wikipedia.org/wiki/Absolute_advantage) advantages in manufacturing. now, the comparative advantage is slipping away.

JAD_333
16 Mar 10,, 06:40
What’s the point to compare today’s data with your own past? It’s plain as a pikestaff that even with a modest growth in productivity you will see an overall growth in output on a long time scale.Your arguments are akin to the hot air in the Soviet textbooks. I remember as they bragged that in 1985 the daily output of the Soviet industry was more than the annual output of the industry of the Russian Empire in 1913.
But what’s the point?
Humans tend to compare their well-being not with their own great-grandfathers but with their coevals.
So it’s useful to glance at a chart showing the relative shares of world manufacturing output.

Andrew:

If I get you right you would discount a rising GDP year over year because Americans are more emotionally dependent of how output compares to other countries. Granted, if you've been on top for a long time, and if being on top matters a great deal to you, you're not going to feel good about being number 2.

It's like football. Redskins fans were on top of the world when the Skins beat the Dolphins in the 1983 Super Bowl, and on the bottom after they lost the next year to the Raiders. But they got over it, and kept on cheering for their team. If China passes us in manufacturing output in 2013 as projected, many Americans may feel bad about it, but they'll get over it. They'll count their blessings, and realize they have plenty else to feel good about.

As to your question, what's the point in comparing one year to another within our own economy, well, it's important, because we need to know whether our economy is healthy or not. We can't find out comparing it to China or the EU. We have to compare our GDP year over year. If growth of 5-7% is considered good, then growth above or below that might indicate coming problems like inflation or recession. Either can be mitigated by raising or lower interest rates, increasing or decreasing the money supply, or by adjusting taxes, but we need to know in plenty of time so we apply the remedy.

Back to your main concern, try broadening your view a bit to consider what happens in the long run after a global free market economy takes hold. First, countries where wages are relatively low experience rapid growth in manufacturing. Most of what they produce is exported to richer countries where wages are higher. Since the imported goods are cheaper than goods made in the importing country, manufacturing declines in that country, throwing people out of work and causing wages to fall or become stagnant. But as low-wage workers become harder to find, wages are bid up. Now those workers become consumers of the goods made in their country, and as demand increases so do prices. As prices grow higher, countries that imported from that country, import less and less (relatively) from it and
turn to other sources for the same goods. One of those sources may very well be right at home. Full circle.

This scenario is obviously oversimplified, but the point is, sooner or later the playing field levels out. For a country with relatively high personal income, like the US, the adjustment could be painful for some time to come. But there is a way out. If the US sees what's coming, it may realize that resisting the intermediate decline of its manufacturing base is costly and ultimately fruitless, and besides raw materials will become harder and harder to find pushing prices higher.

So, instead the US should put its productive capacity and energy into sectors which low-wage countries cannot enter for years to come, unless of course they steal the know-how and trade secrets of advanced countries, such as China is doing with a vengeance. (This should make people realize that one of the most important things the US must do to protect its economy is improve computer security and counterintelligence.) The idea of developing non-manufacturing sectors to compete globally isn't new. But it hasn't sunk in yet. Too many people are still crying in their beer. Like you say, it's about well being, at least for now.

I may have missed your whole point but it was fun picking on you.:))

JAD_333
16 Mar 10,, 07:42
You should read the tariff schedules on that pending S. Korea "free trade" agreement. There are over 400 pages of them,...

Only 400? That's better than the health care bill.



...and the tariffs on US exports are roughly 4-10 times higher than on Korean imports for items in the same classifications. This includes cars, trucks, car parts, and hundreds of other manufactured items.

No quid pro quo? A lot of time these imbalanced agreements are driven by an unspoken international policy connection.



I am talking practical terms- It's basically impossible to set up any new American car dealership in Japan. The Government doesn't want them.

I recall back in the beginning we didn't want Japanese auto dealerships here. Now most Japanese cars are made here and sold by American dealers.



I'll tell you this much. Historically, it has been the small manufacturers in the US that supported the big manufacturers. So it might be fine for the big players to have these deals, but the little guys are getting dead fast. And small business is 2/3 of job creation in the US, and the best wages overall were in manufacturing.

No disputing the effect of outsourcing, but if the big guy goes down holding on to domestic component makers, no one gains.

Yes, we little guys create jobs, but we have to have buyers and clients to give them out and we don't have much now. There was a recent bill passed that would give us a bye on paying Fed payroll taxes for the first year on anyone we hired. I could maybe hire one, but if there are any strings attached to the deal, forget it.



How come the Gov't talks it up about the "multiplier effect" when it comes to Federal spending of tax dollars, but never when it comes to private sector wages?

Well, if the government is putting out tax incentives, that's where the multiplier effect starts. It then picks up momentum as the bucks come into the private sector.


Astralis is wrong about US Manufacturing output- it peaked about 2000, and never recovered from that recession. And it's not going to. Productivity is up, but hours are down, jobs are down, output is down, and wages are flat at best.

haha...poor Astralis is catching it from all sides. But in he's essentially right. Although we had a year over year decline in the early 1990s and from 2000-2001, overall US manufacturing is up. What is down big time is manufacturing employment, as you point out. It's now only 9-10% of the workforce versus 16% in 1987.



Since 2000, it has spread to high-tech manufactured items that are going away, and the trend is accelerating. That's your medical equipment, what was left of electronics, machined parts, etc.

Take that...


AP....The U.S. by far remains the world’s leading manufacturer by value of goods produced. It hit a record $1.6 trillion in 2007 — nearly double the $811 billion in 1987. For every $1 of value produced in China’s factories, America generates $2.50.

So what’s made in the USA these days?

Read more: Made in USA Is Alive and Well: Manufacturing Goes High-End and the USA is Still the Global Leader | Economist Blog (http://www.economistblog.com/2009/02/22/made-in-usa-is-alive-and-well-manufacturing-goes-high-end-and-the-usa-is-still-the-global-leader/)






I used to be a big free-trader, now I'm not so sure. Because what we have isn't really free trade, it's trade engineered only for one thing- to keep consumer prices as low as they can possibly be. And if that hurts US manufacturing, that's just fine.

Pick your poison. Isolation and tariff protection or free(er) trade. Both are double edged swords. I look at all this as objectively as possible, but down deep I'd just as soon we all head back to the farm and meet once a week in town on shopping day. We live in a big machine and it's hard not to become one oneself. :)) It's all a huge conspiracy; first they wean us off mechanical things onto electronics and then the Illuminati pull the plug on the grid forever. We'll be skipping our dead I-Pods in the creek...picture it.:)):))




I just don't agree with that. I guess it's nice to buy a cheap shirt in Walmart. Not too many people like me left that will pay $80 for a shirt at Filson.

But at least I know that when I get it home I won't have to sew the buttons on.

I forgot whatever it is you don't agree with, but those cheap shirts in Walmart are a boon to the low income people around here. I haven't paid 80 bucks for a shirt in years...actually it was $25 a piece back in the 1970s hand tailored in Madrid. I still have some nice knockoff English pumps I had made in Hong Kong along with a suit or two that was made overnight during a 2 day layover in 1990.

Yeah, but when the buttons fall off, you just get another shirt




[/quote]GM's new battery plant will pay workers $14/hour. That's a bunch of new working poor in Michigan, and damn sure none of them will have the income to buy a new Chevy Volt. Maybe they will be able to sell them in Japan in those 2,000 new dealerships...[/QUOTE]

There's good people around here who would jump at $14/hr, and were it not for a bias against wearing a suit and tie, some of them could have been bank presidents.

cheers

highsea
16 Mar 10,, 18:09
Only 400? That's better than the health care bill.And it's as much about "free trade" as the health care bill is about reforming health care.

No quid pro quo? A lot of time these imbalanced agreements are driven by an unspoken international policy connection.Well, if it's an "unspoken agreement", then it's not much value.

I recall back in the beginning we didn't want Japanese auto dealerships here. Now most Japanese cars are made here and sold by American dealers.Remember why we have those Japanese carmakers here? Reagan's threat of quotas.

You know something interesting though? The Koreans hate the Japanese, of course, and limit to a small handful the number of cars that Japan can import to Korea. One of the side effects of Japanese car production in America is that most of the Toyotas and Hondas in Korea were built in the US.

No disputing the effect of outsourcing, but if the big guy goes down holding on to domestic component makers, no one gains.I only want an even playing field. I know I am a lone voice here on the WAB speaking for US manufacturing, but let me give you an example that I am dealing with this very moment. A large medical company in the US needs a new "COW" (computer on wheels) to house a device. They need thousands of these. I have already prototyped it, and they are going to buy them.

Now here's the catch- the cart uses a machined extrusion as one of the main components. The extrusion will cost $15 in the US. I can machine the extrusion for another $15.

China is offering the machined extrusion for $15. So it's impossible to make that part here, the cost from China is the same as the raw material cost here.

Yes, we little guys create jobs, but we have to have buyers and clients to give them out and we don't have much now. There was a recent bill passed that would give us a bye on paying Fed payroll taxes for the first year on anyone we hired. I could maybe hire one, but if there are any strings attached to the deal, forget it.That payroll tax credit is only for the last 2 months of the year, with another $1,000 added on if you keep that guy for a year. So the credit will save you maybe $1500 if you keep the employee on permanently.

Well, if the government is putting out tax incentives, that's where the multiplier effect starts. It then picks up momentum as the bucks come into the private sector.So all good things have to start with the Government, huh?

Government is overhead. Services are overhead.

Wealth is created by producing something of value- e..g. taking raw materials and making a finished product that someone needs, or farming, ranching, fishing, etc. And the starting point is always energy. If you don't have the energy, you can't do any of those things.

haha...poor Astralis is catching it from all sides. But in he's essentially right. Although we had a year over year decline in the early 1990s and from 2000-2001, overall US manufacturing is up. What is down big time is manufacturing employment, as you point out. It's now only 9-10% of the workforce versus 16% in 1987. It's not up. It's down. We had a very slow growth after the 2000 recession- well below the national average, and the slowest recovery we've ever seen.

Look-0.8% growth is slow death. You can't recapitalize. You have to grow at least as fast as inflation just to stay afloat, and you need to beat that to invest in the future.

Pick your poison. Isolation and tariff protection or free(er) trade. Both are double edged swords. I'm ready for a good old fashioned trade war at this point. The pendelum has swung too far the wrong way.


There's good people around here who would jump at $14/hr, and were it not for a bias against wearing a suit and tie, some of them could have been bank presidents.And they will never be able to afford that Volt either. And they won't be able to afford health insurance, a home, or anything else that the working class has historically enjoyed.

And I'll tell you what- I bet you anything that GM can get that battery from China for 1/2 the cost of making it here even at the $14/hr wage. It's being made here because Obama is the defacto CEO of GM.

I say fix the trade policies, fix the energy policies, reel in Government spending, throw most of the CEO's on Wall Street in the clink, and give America a fighting chance to recover.

andrew
17 Mar 10,, 01:15
JAD,


This scenario is obviously oversimplified

It is.
The world economy consists of communicating vessels of national economies. But unlike water in the elementary school experiment, the well-being in the world economy isn’t (and never was) leveled out. So, your idea that some time in the future the playing field will flatten out, giving place to an American manufacturing renaissance, is at least doubtful.
Perhaps, two centuries ago Chinese, Indians and other laggards too might have been thinking that their turn will eventually come. And indeed, it is coming. At least for Chinese. But what did they come through during these two centuries? How much hardship did they digest due to their lag in manufacturing development?


So, instead the US should put its productive capacity and energy into sectors which low-wage countries cannot enter for years to come

Some time ago I had an idea what the US could specialize on - good government.
But after an encounter with the real, daily America I became a skeptic.

Old World Order
31 Mar 10,, 11:13
I really can't decide which in this thread is worse: the knee-jerk America Sucks! guys or the knee jerk Yay America! guys. Either way, being a cheerleader for a side is unbecoming.

pennsy
31 Mar 10,, 12:44
The reason why the old economies cannot compete
http://j.imagehost.org/0467/thumbs_EMOK_20Picdump_20129_016.jpg (http://j.imagehost.org/view/0467/thumbs_EMOK_20Picdump_20129_016)