Do We Need to Be a World Power?
The United States is the most powerful country in the world,
past or present, but what does that mean? It has meant certain
advantages that most people probably do not think of, like paying
less for many things because of the dollars position as the world's
reserve currency. With oil and other commodities quoted in and
sold in dollars, there is a demand created that allows us to
print more and more currency without the usual inflationary effects,
although the limits of this are being tested at the moment.
Of course, all powerful countries get more leverage when it
come to negotiating as well. This is why tariffs are higher on
many small and poor countries than on larger and wealthier ones.
The United States, European countries, and even developing countries
like Mexico often have low-tariff or even duty-free access to
markets of the world. Compare that a country like Bangladesh,
where tariffs of over 15% for exports to the U.S. mean garment
workers have to work for less pay and with less safety in order
for factories there to be competitive against countries that
do not pay so much. Power, or a lack of it, shows in the trade
deals that can be negotiated.
But there are costs to being a world power beyond those paid
by the poor countries. There are costs to the countries which
wield that power. The histories of the Roman Empire and, more
recently, the British Empire show that those costs can be overwhelming
eventually. In any case, there is no sure way to maintain an
empire, and in the United States our position as the most
powerful is probably coming to an end in this century.
China is rising to challenge our status, for example. It still
has a lot of areas which need to be updated to the most modern
technology, but there will eventually be tractors for all farms,
and other technological improvements that will rapidly increase
their economic growth. Because of the lower base they are starting
from, it is virtually inevitable that within a few decades they'll
be at least half as productive as the United States. Consider
for a moment that a tractor can quickly double or triple the
output of a farm versus human power. There is no technology in
the United States that can similarly skyrocket our productiveness.
Adopting the best technologies available is easier than creating
ever better ones, so expect China and other poorer countries
to continue to grow at a faster rate than the developed world.
Some readers might think it isn't so impressive that China
could soon be half as productive as the U.S. That doesn't sound
like much, but let's look at the numbers for a moment. According
to the World Bank, as of 2011 the United States had a GDP (gross
domestic product) of about $15.09 trillion, for a per-capita
GDP of about $48,428 (divide GDP by the population of 311,591,917).
Now, if China was half as productive, with a per-capita GDP
of around $24,200, their total current GDP would be $32.53 trillion,
because there are currently 1,344,130,000 people living there.
That's more than twice the size of our economy and that day is
coming. The math is actually quite simple. If each person in
China produces only half as much but there are four times as
many people, total production will be twice as high as here.
A larger economy means more potential military power, since
a bigger economy means more potential tax revenue to buy more
weapons. That is also very simple math. Both India and China
are very likely to be more powerful than the United States at
some point in this century, and the wait won't be very long for
It's assumed by many that it is a bad thing for the people
of a country to have their nation lose its dominant position
as a world power, but is that true? Not necessarily, and that
hypothesis has not been proven by history. The British Empire
was lost, and afterwards the British people became richer as
individuals than they ever were before. Maintaining an empire
costs money, after all, and the wealth created by the labor of
the people must be diverted to that purpose through taxation.
Furthermore, the wealth gathered up through taxes in order
to have troops overseas and for other empire-related expenditures,
even if not left in the hands of the people, could be put to
more productive purposes. We can argue about whether a country
does better when the government spends more or the people are
allowed to spend more of their own money, but if a government
is to spend some part of the production of the populace, the
different ways in which they do it clearly have differing economic
impacts. Creating a freeway system here in the United States,
for example, because it made transportation much more efficient,
did much more for the economy than fighting wars in Asia.
In other words, what we might call the "empire-collapse-dividend"
could either mean more money in the hands of the people or more
efficient use of tax revenues in regards to encouraging economic
growth. Those of us who live here don't necessarily have to lose
anything important from the coming shifts in power. On the other
hand, if our fear of those changes causes us to pursue expensive
and dangerous policies which try to prevent the inevitable end
of an era, we might face a true and lasting impoverishment.
The better plan, in my mind, is to live peacefully and prosper!
Here are some questions to ponder about what it means for
the United States to no longer be the primary world power. I
add a couple of my own thoughts to each, but these are not meant
to be definitive or researched answers.
1. When the U.S. is no longer the most powerful country
militarily, will the people be at greater risk of wars or a loss
I think that more openness between countries is already lessening
the threat of world wars. Furthermore, a strong economy always
leaves open the possibility of quickly gearing up for war as
the U.S. did for World War Two. An economy weakened by spending
excessively on the military and on other measures to maintain
an empire leaves us less able to sustain new defense measures.
Are we actually safer for having military bases in 130 countries?
I doubt it. In fact, our armed presence and meddling causes enough
animosity in many places that it easy to suppose it puts us at
greater risk of war. Imagine for a moment how people here would
react in their were foreign troops in our country and internal
economic policies were often dictated to us by France or Germany.
2. Are there things we could do develop a healthier
economy based on the coming changes in power?
As I suggested above, my feeling is that some seriously strategic
thinking has to be done when it comes to military spending, so
we can stop adding debt that threatens to someday impoverish
us. Cutting military spending and means-testing so-called entitlements
so only those in need receive Social Security and Medicare payments
are the two biggest things we could do. (Yes I know that despite
there actually being no accounting basis for calling these programs
anything but "promised welfare," many readers will
hate that last idea.)
3. What can we do individually to prepare for the changes
The United States is almost certainly in the process of losing
its status as the world power, but what you should do
about it as an individual depends in part on how you think our
culture and government will respond to this inevitability. If
you think we are likely to go on expanding our power into the
world and add ever greater debt in an attempt to avoid the end
of the empire, prepare for some really rough times a couple decades
down the road. If you think wiser heads will prevail, you still
should be ready for temporary disruptions, like potentially massive
inflation for several years when the dollar loses its status
as the world's reserve currency and we have to start paying a
truer price for the worlds goods.