The world changed last week, unreported and unseen

The world changed last week, unreported by the media and hence unseen by most Americans.   Our locked orientation — seeing ourselves as the hegemonic or imperial power — blinds us to the almost inevitable evolution of the world to a multi-polar order.  In the 21st century the center of economic power moves from West to East. 

This blindness afflicts even experts, as seen in this article:  “The Last European: Why the G-20 Was a Success“, Simon Johnson, blog of the New York Times, 3 April 2009.  The World Bank and International Monetary Fund are central organizations in the global geopolitical system.  The first always has an American boss, the second European boss.  Johnson explains that both might soon have leaders from the emerging nations, a signal of their emergence onto the world stage as a major power group.

This shows how the current downturn is accelerating the shift of economic power, as the developed nations are most afflicted by it.  The WB and IMF need money, and the West is tapped out.  We are forced to turn to the emerging nations, and so must surrender influence.  It’s important for our egos to hide this.  Note how cleverly Johnson does so, ignoring the structural aspects of this — instead painting it as brilliant political footwork by Team Obama.

Some have said structurally this is a typical “emerging nation crisis” — but taking place in the developed nations.  Perhaps we are in some ways trading places.  The developed nations entering a period of structural decay.  The emerging nations enter their period of almost inevitable growth, catching up to us.

Excerpt

In this difficult context, the Obama administration produced a rabbit out of the hat {at the G-20 meeting}.

The managing director of the I.M.F. is very powerful, with a great deal of authority and discretion, and has always been a European – in effect, appointed by European governments to represent their interests. The G-20 made it clear that this will stop – the communiqué says the selection process will be open, transparent and competitive. But really this is code for saying they will pick someone from an emerging-market country, such as India or Brazil (and there are some excellent candidates). The right person in this job could have a huge positive effect on the I.M.F.’s legitimacy.

To make things matters more interesting, the I.M.F.’s managing director is expected by insiders to resign within a year, to resume his (promising) pursuit of the French presidency. The leadership race for the next managing director effectively starts today; the stakes are high, and competition will be intense.

How did the Obama administration pull this off? In a brilliant move, they took the lead by volunteering to open up the selection process for the World Bank, the I.M.F.’s sister organization, which has always been run by an American. The next president of the World Bank is very likely to be Chinese.

About the author

Simon Johnson, former chief economist of the International Monetary Fund, is a professor at the MIT Sloan School of Management and a senior fellow at the Peterson Institute for International Economics. He is a co-founder of The Baseline Scenario (and frequently publishes there).

Afterword

Please share your comments by posting below.  Per the FM site’s Comment Policy, please make them brief (250 words max), civil, and relevant to this post.  Or email me at fabmaximus at hotmail dot com (note the spam-protected spelling).

For information about this site see the About page, at the top of the right-side menu bar.

For more information from the FM site

To read other articles about these things, see the FM reference page on the right side menu bar.  Of esp interest these days:

Posts about the fall of the American Empire, and the shift of power from West to East:

  1. Power shifts from West to East: the end of the post-WWII regime in the news, 20 December 2007
  2. Prof Nouriel Roubini describes “The Decline of the American Empire”, 18 August 2008
  3. “The changing balance of global financial power”, by Brad Setser, 22 August 2008
  4. German Finance Minister Peer Steinbrück explains how the world is changing, 30 September 2008
  5. “A shattering moment in America’s fall from power”, 19 November 2008
  6. “End of Empire” by David Roche, 29 November 2008
  7. The transition between Imperial reigns: what will it mean for America?, 16 December 2008
  8. To understand the Imperial Unconscious, Tom provides the Dictionary of American Empire-Speak, 6 March 2009

Posts about America’s broken OODA loop:

  1. News from the Front: America’s military has mastered 4GW!, 2 September 2007
  2. The two tracks of discussion about the Iraq War, never intersecting, 10 November 2007
  3. Diagnosing the eagle, chapter I — the housing bust, 6 December 2007
  4. Another cycle down the Defense Death Spiral, 30 January 2008
  5. Quote of the day: this is America’s geopolitical strategy in action, 26 February 2008
  6. What do blogs do for America?, 26 February 2008
  7. Everything written about the economic crisis overlooks its true nature, 24 February 2009
  8. The housing crisis allows America to look in the mirror. What do we see?, 9 March 2009
  9. Globalization and free trade – wonders of a past era, now enemies of America, 16 March 2009
  10. A note on the green religion, one of the growth industries in America, 17 March 2009

17 thoughts on “The world changed last week, unreported and unseen

  1. FM: “The emerging nations enter their period of almost inevitable growth, catching up to us.

    Arguments like these are too pat. Clearly, America’s “hegemony” can’t last forever. However, the so-called “growth” of emerging nations ignores the tremendous environmental *costs* these nations of incurred to obtain that “growth”. China is a poster-child. Most of their “economic expansion” has come at the expense of their land, their environment. By some estimates, they have poisoned so much of their environment that they are no longer capable of feeding their own populace. To ignore this when discussing a nation’s economic power baffles me. At some point, some economist is going to factor in these liabilities, and the economic “power” of these nations won’t be quite so stellar. I’m willing to assert, as a sort of bet, that if one *were* to factor in these liabilities, China’s growth would be negative. The world hasn’t changed. The shift in economic power is, for the time being, illusory. For all of the belly-aching, both from the right *and* left, as concerns America’s environmental policies, we are decades ahead of most nations. Our land remains our single most valuable asset (as with *every* nation) whether they realize or, as with many, not.
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    Fabius Maximus replies: I agree that there is an important point in your comment. But its context provides more confusion than help IMO. Words have meaning. “Economic growth” does not include externalities, which is why they are called externalities. That does not mean these factors are unimportant — they might be decisive. But to ask “economic growth” to reflect all aspects of life is asking too much.

    The concept you are gropping for is called “utility” by economists. Is the economic growth in China worth the environmental destruction? No need to guess. Ask them. It’s their decision, their trade-off to make.

  2. “But to ask “economic growth” to reflect all aspects of life is asking too much.”

    OK, but the question remains unanswered: Is Economic Power really shifting? If this is the assertion you’re making, or suggesting, then the externalities are consequential. You’re assertions make no sense, IMO , without considering them (whether or not it’s “asking too much” or not.) As my Great Aunt used to say: Tough.
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    Fabius Maximus replies: Economic power, by the standard definitions, is clearly shifting. Industrial production, income, assets, influence in global financial sytems, foreign currency reserves, trade balances. In what sense is this “unanswered.”

    Your assertion (IMO, it looks like an assertion) that environmental pollution has affected these metrics is, so far as I know, without basis in fact.

    Even from a wider perspective, “utility” for the emerging nations is improving. Lifespan, fraction of live births, incidence of disease — all these are improving. So what is your point?

    They have paid a high price in terms of pollution. But turn of the century London was a hellhole by our standards, between the horse dung and coal smog. Western cities were cleaned up, and I suspect the emerging nations will clean up as well. It is Maslow’s hierarchy of needs in action.

    “they have poisoned so much of their environment that they are no longer capable of feeding their own populace.”

    Do you have any evidence of this? They have had a roughly even trade basis in food (weather permitting). This is changing slightly as their wealth allows a shift to more expensive foods (i.e., importing soybeans as animal feed).

  3. I don’t see what’s wrong with the comment that obama “pulled a rabbit out of the hat.” It’s not as if he tricked the Europeans into changing their stance on the IMF. And if he is willing to give up the World Bank presidency to China (if Johnson is correct in claiming this), then he is hardly resting on all imperial complacency, but yielding to some hard new realities. Possibly this move was already negotiated with China, in return for their continued support of the US dollar.
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    Fabius Maximus replies: It’s not “wrong”, it’s just incomplete — esp. from an expert like Johnson — ignoring the wider implications of these events.

  4. Fabius, why do you think that changing the nationality of the IMF MD, or the World Bank President, makes for a significant change? What matters is voting rights (quota) in the IMF, and the basket of currencies against which the SDR is calculated. Even if these changes come about, the US will have a 16+% stake in the IMF, and only 4 currencies are considered important enough to be benchmarked against for the SDR.
    The Environment is now a new Chapter in the US Dollar Epic. The US is seeking, and largely winning agreements in the comity of nations; that economies that continue to rely on technology that results in carbon emissions will have to purchase rights to conduct that activity. This will result in a foreign tribute accruing to the US that will further strengthen the US dollar hegemony. These agreements are presumably going to be enforced through a new divide-and-rule policy in which some countries will be favored with the green technology to motivate them to support the tribute.
    In the background of the loss of military domination over all oil-producing territories and oil logistics, this is the new strategy to perpetuate the US dependence on cheap foreign imports.
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    Fabius Maximus replies: It’s a milestone, a concrete sign of change. A milestone does not mean that you have arrived at your destination, but indicates movement.

  5. I agree with your premise, that America will no longer have hegemony that it had. I am not an economist, so the simple analogy I use is that today America’s an 800 lb gorilla and the next largest gorilla is Japan at about 300 lbs. It is likely that in the future, there will probably be more 300 to 500 lb gorillas and America may go on a forced diet to around 700 lbs.

    China’s ability to improve the standard of living for many of it’s citizens is tremendously impressive, but to clarify upinvermont’s point, China has made some trade offs that could become costly. For example: “China has only 8 percent of the world’s fresh water to meet the needs of 22 percent of the world’s people.” (source)

    Given the environmental damage done by industrialization and fresh water fish farming, which is where I first heard about this problem, questions about sustainability are reasonable.

  6. Editors: This reply probably exceeds your strictures. If you opt not to post this, I certainly won’t be personally offended. {FM : its OK; I have inserted replies}

    “Economic power, by the standard definitions, is clearly shifting”

    Well, yes, but that’s exactly what I’m questioning. Is the standard definition sufficient?

    FM: We should be able to compare apples and organges, monetary and non-monetary factors. That’s what it means to balance growth, freedom, and the environment. Pretending they call all be measured in dollars IMO ends up as propaganda exercises, supporting whoever is doing the addition.

    “Your assertion (IMO, it looks like an assertion) that environmental pollution has affected these metrics is, so far as I know, without basis in fact.”

    It’s obvious that I’m not an economist and my field of expertise is not emerging economies. I’m not smart enough to make this stuff up. Here are the *facts* on which I base my assertion:
    * “The Environmental costs of growth in India and China, op-ed in The Business TImes, 13 June 2007
    * “Pollution May Cancel Out China’s Economic Growth“, NPR, 9 August 2007 — Excerpt:

    “Much has been made of China’s dazzling economic growth, but when the negative effects of China’s pollution are factored in, the growth rate is less impressive. The Chinese government has calculated that the effects of pollution wiped out $67 billion, or 3% of the nation’s GDP, in 2004. The World Bank calculates that pollution costs China about 5.8% of GDP every year.”

    FM: All these show what nobody questions. China has a severe environmeental problem. The question is: are their people net better off than they were 5 or 10 years ago, netting the growth vs. the costs?

    You may object that these are only two examples, but they are drawn from the research and the reporting of others. If *you* are interested, I’m sure you can ascertain for yourselves whether the sources, from which these reports drawn, are reliable.

    FM: It’s your proposition. IMO it’s a annoying rhetorical trick to say “well, you can prove if I’m right. Life is short, so why don’t we just say it’s up to you to prove your assertions, and I’ll prove mine.

    “Lifespan, fraction of live births, incidence of disease — all these are improving. So what is your point?”

    Who said anything about lifespan, births, incidence of disease? Vermont, my home state, may rank first in any number of health statistics, but our “economic power” is a joke. What’s *your* point? My assertion remains that a nation’s wealth is ultimately its environment, and China’s “economic growth” has been at the expense of its environment.

    FM: This is a factual method to test your theory. One way to assess the environmental effects on China’s people of China is to examine their health. If the effects are as horrible as you imply, offsetting the beneficial aspects of economic growth, then their health should have improved only marginally — or perhaps not at all.

    FM: “Do you have any evidence of this, … ‘they {CHina} have poisoned so much of their environment that they are no longer capable of feeding their own populace.‘”

    The links I provided below provide evidence.

    * “Farm Land Pollution Decreases China’s Grain Production By 40 Billion Kg“, Xinha, 5 December 2005
    * “Pollution ‘hits China’s farmland’“, BBC, 23 April 2007
    * “China’s Economic Engine Forced to Face Environmental Deficit“, 26 July 2007
    * “True Cost of Coal“, Greenpeace, September 2008 (See page 56 — “Cost of internalizing the external costs of coal”

    FM: These do not show that the Chinese “are no longer capable of feeding themselves.” That’s because your statement is absurd, as China’s net food imports are minor. Also note the data on page 56 shows that the cost of the “Cost of internalizing the external costs of coal” is relatively minor.” Increasing the cost of coal by 50% could be absorbed by China. Commodity prices (e.g., coal and oil) incerased many times that during the last expansion.

    “But turn of the century London was a hellhole by our standards, between the horse dung and coal smog.”

    I’m sorry, but to compare the toxicity[sic?] of London’s industrial revolution with China’s is a comparison I can’t take seriously.

    FM: And the reason for that is? Coal smog was a major killer. The epidemiological effects of poor santitation are well-proven. Why is this difficult for you to understand?

    “I suspect the emerging nations will clean up as well.”

    Yes, they will… and that’s the crux of the matter isn’t it? What will the cost of that be?

    FM: We don’t know, or need to know. They control their destiny, and I trust that they will manage just as well or (probably) even better than we have.

  7. Michael Hudson, in today’s Counterpunch, has a different view of what happened at the G-20, particularly the agreement to fund the IMF with $1 trillion: “The IMF Rules the World“, 6 April 2009.

    He claims this money will be used for new loans to countries like Iceland and the bankrupt Eastern European countries who experienced similar real estate bubbles. The loans will be used to repay current debt to international banks (British and German, especially) in return for which the debtor countries will agree to cut back social services and privatize public resources. This is simply a continuation of the old neo-liberal policy of extracting wealth from developing countries by saddling them with debt. The losers are the debtor nations; the profiteers are the banks.
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    Fabius Maximus replies: Thanks for posting this, which I will read with interest. Based on your description, I agree. This post discusses who runs the machinery, not how it runs — or for what purpose. The next question is how will these institutions change as their management slowly changes?

  8. Another recent article from Prof Michael Hudson that goes into the strategic/national implications of the current debt-based economic structures, of which the concluding sentence lays things on the line quite nicely: “The Financial War Against Iceland“, Centre for Research on Globalization, 5 April 2009 — “Being defeated by debt is as deadly as outright military warfare.”

    “The real issue is the health of the overall economy. The parties seeking the most are not the most indebted individuals, but the largest creditors. Their aim is to increase their dominion over the rest of society. Above all, their aim is to maximize the power of debt over labor. The worse the economy does, the stronger the creditor position will grow. This is a recipe for economic suicide that will lead to outright debt peonage as domestic depression intensifies. Creditors everywhere else in the world are writing down their claims for payment to reflect plunging property values. Iceland has an opportunity to make itself a model test case for economic justice. What better time to post the basic principle of what is to be saved – an unsupportable debt burden that must collapse in the end, or a society’s survival? Will the government defend its citizens from financial predators, or turn the economy over to them? That is the question.”

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    Fabius Maximus replies: The story of Iceland’s rise and fall IMO will be considered paradigmatic by historians writing the story of our financial insanity. Another must-read about this is “Wall Street on the Tundra“, Michael Lewis, Vanity Fair, April 2009 — Excerpt:

    “The world is now pocked with cities that feel as if they are perched on top of bombs. The bombs have yet to explode, but the fuses have been lit, and there’s nothing anyone can do to extinguish them.”

  9. For me one of the most significant changes from last week is a clarification viz. Russia which has been revealed as being essentially a 2nd tier player despite her enormous territory and abundant natural physical resources. It is perhaps cliche, but the most valuable ‘natural resource’ of any nation is in fact her population.

    So perhaps we could say that the result of the G20 summit was that the G2 stands revealed, although more realistically we could say ‘G3’, i.e. US, China (G2) and everybody else (G3). G1 and G2 are in opposition in that one is a debtor and the second a creditor conglomerate.

    The tide has now turned for sure. How it plays out is anybody’s guess since it can still go limitlessly variable ways of benign or horrific.
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    Fabius Maximus replies: I agree that reliable forecasts are impossible now. The primary reason is IMO that the outcome will be determined by our choices. Yours, mine, folks in China, everybody.

  10. If this interview on PBS with Moyer (transcript) goes ‘unreported and unseen’ it is final confirmation – for any who still need it – about just how unredeemingly infested with fraud is the current USG and US elite status quo.

    Unless all ‘the bums are thrown out’, and soon, the US will become an internationally recognised ‘failed state’, at which point dollar hegemony will evaporate rapidly and with it the entire military-industrial empire which serves it.

    If not, we enter a weird twilight zone for a while until some sort of sanity-based equilibrium ensues. Not yet the case.
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    Fabius Maximus replies: Moyer’s interview of William K. Black is great, very much worth reading.

    But jumping from this to the US becoming a “failed state” (e.g., Yugoslavia, Sudan) is IMO absurd. More likely we will descend to becoming structurally similar to an emerging nation, as many experts have suggested. For examples, see America on its way from superpower to banana republic, 28 March 2009. This is a well-worn path, previously walked by Argenina and Chile.

    Definitions of a failed state, from Wikipedia:

    (1) The Fund for Peace:
    * loss of physical control of its territory, or of the monopoly on the legitimate use of physical force therein,
    * erosion of legitimate authority to make collective decisions,
    * an inability to provide reasonable public services, and
    * an inability to interact with other states as a full member of the international community.

    (2) The Crisis States Research Centre: a condition of “state collapse” – the state can no longer perform its basic security functions and no longer has effective control over its territory and borders.

  11. Re comment #7: isnt this what happened in Zimbabwe ? ( + a terrible drought ) .
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    Fabius Maximus replies: I am not familar with Zinbabwe, but I do not believe so. Latin America are usually cited as classic examples of how the “Washington Consensus” on trade and development is a rigged game. The success of Brazil shows that the Bretton Woods II “system” (perfected in Asia, esp by China) can be successfully adopted by nations — breaking free of the western finanical institutions.

    Now both global financial structures — old and new — lie in ruins. Nobody can say what comes next in the great game.

  12. Fabius Maximus replies: Do to the complexity of this comment, I have inserted answers into the comment.

    No need to post this. I’m content for your response to be the final word – publicly. However FM, you’re response is curious. Very professional in that you have filled out my links with the names of the articles and the relevant information – something which I did not do and should have. On the other hand, you seem excessively defensive?

    FM: “Pretending they [can] all be measured in dollars IMO ends up as propaganda exercises, supporting whoever is doing the addition.”

    Yes, but isn’t that what *you’re* doing? My point, and I thought that you confirmed this, was that economists *weren’t* “[including] externalities”?

    *** No, I’m not. Can you quote an example?

    FM: “All these show what nobody questions. China has a severe environmental problem.”

    Here is what you stated: “that environmental pollution has affected these metrics is, so far as I know, without basis in fact” I demonstrated that my assertions *were* based in fact. That’s all.

    *** Your assertion in comment #1 was as follows: “By some estimates, they have poisoned so much of their environment that they are no longer capable of feeding their own populace.” That is clearly false, and the quotations you cite show nothing of the kind.

    *** In comment #2 you asked “Is Economic Power really shifting?” To which I replied “that environmental pollution has affected these metrics is, so far as I know, without basis in fact” You provided evidence that China has pollution — which nobody questions. You provide no evidence that it has noticably affected their economic stats (although there are unquestioned effects on their quality of life).

    FM: “The question is: are their people net better off than they were 5 or 10 years ago, netting the growth vs. the costs?”

    But that’s a different question! It seems that you are equating “a population’s “better-off’ness” with its status as an economic powerhouse. I’m sorry to disagree. Recent studies have indicated that a population’s happiness has little to do with a nation’s economic ranking (within limits of course). You continue to play this as your trump card, but I just don’t see the connection. You’re original assertion (based on your post) seemed to be monetary, but then you accuse *me* of limiting the scope of my argument to the same?

    *** It is not a different question, it is a methodology to compare monetary with non-monetary factors. I don’t equate “better off” with money, or with happiness. That’s bizarre. How many have clean water? Percent of live births? Average lifespan? Percent malnourished? These are the kind of metrics commonly used to measure welfare and quality of life in third world nations.

    FM: ” I’m sure you can ascertain for yourselves whether the sources, from which these reports drawn, are reliable.” … “It’s your proposition. IMO it’s a annoying rhetorical trick to say “well, you can prove if I’m right. Life is short, so why don’t we just say it’s up to you to prove your assertions, and I’ll prove mine.”

    There was nothing rhetorical about it. I provided evidence for my assertion. I assumed, perhaps incorrectly, that you are better read in these matters than me. My statement was an *acknowledgement* that you might have knowledge of which I’m unaware and was an invitation for you to correct me. That’s all. I never asked you prove anything. In fact, you would have been more perceptive to accuse me of flattery.

    FM: “Life is short, so why don’t we just say it’s up to you to prove your assertions, and I’ll prove mine.”

    I did.

    FM: “This is a factual method to test your theory. One way to assess the environmental effects on China’s people of China is to examine their health. If the effects are as horrible as you imply, offsetting the beneficial aspects of economic growth, then their health should have improved only marginally.”

    At his point I have to question *your* information. China is nothing if not cagey about the state of its population and standards of living. They have an obvious interest in biasing whatever information is disclosed. Even now, they have forbidden the discussion of child-deaths during the previous earthquake.

    *** There is a large body of data about the health of China’s people, which shows substantial improvement as China has industrialized. I don’t see how you can wave your hands and dismiss this data.

    From Reuters: “China’s life expectancy to jump: report”, 12 March 2007 — Excerpt:

    Average life expectancy in China will jump 13 years to 85 years and all households will be lifted out of poverty by the middle of the century, Chinese academics forecast in a report issued in state media on Monday.

    The number of years a Chinese child spends in school will almost double to 14 years and an increasingly affluent population will spend a far smaller proportion of their income on food, the official China Daily said, citing a 20-volume report called an Outline for China’s Sustainable Development.

    But the weighty report, put together by 184 academics and policy makers mainly from the influential Chinese Academy of Sciences, warned a growing population and environmental problems posed risks to China’s sustainable development, the Chinese News Service said. Poor use of energy, social inequality, the country’s rural woes and a lack of creativity and innovation were also risks, it added.

    … But it said that by 2015, China’s social and economic indicators should be on par with developed countries in the 1960s, by which stage China would have moved from an agrarian economy to an industrial one.

    None of this bodes well for life-expectancy. And that is my point. I predict that until China deals with their environment, they won’t supplant the United States.

    *** This article contradicts your theory.

    FM: “These do not show that the Chinese “are no longer capable of feeding themselves.” That’s because your statement is absurd”

    Hardly. It’s already a fact. {FM: this excerpt is from “Sooty Air Cuts China’s Crop Yields”, Science News, 4 December 1999}

    “China leads the world in grain production, harvesting more than 360 million tons each year. The growing affluence of its 1.2 billion inhabitants, however, has fostered a craving for more than China now grows. As a result, this nation imports grain.”

    Not to put too fine a point on it FM, but you’re wrong.

    *** Your statement is wrong on many levels. First, this article is a decade old. Second, even in 1999 it was not true that China could not feed itself. US Census data shows that in 1999 China exported rice and corn, more than offsetting its wheat imports.

    *** Citing imports as evidence that China cannot feed itself is absurd. The US imports food too! Does that mean that we’re no longer capable of feeding ourselves? In fact, we import food from China — does that mean we’re both starving? It’s called trade; like the US, China both imports and exports food. As the Wikipedia entry on China explains:

    Due to the shortage of available farm land and an abundance of labor, it might make more sense to import land-extensive crops (such as wheat and rice) and to save China’s scarce cropland for high-value export products, such as fruits, nuts, or vegetables. … China’s agricultural exports have greatly increased in recent years.

    {another excerpt from the Science News article}

    “A new study finds that by cleaning its air, China might eliminate at least in the near term�its need for imported grain. Dust-size particles of soot and other pollutants have created a haze over much of China’s grain belt. This pollution can significantly depress photosynthesis, reducing crop yields, the new study finds. [And what follows is the most important sentence.] In fact, its calculations suggest that the haze could be robbing farmers of more grain than China now imports.”

    The clear implication, FM, is that China wouldn’t have to import food if it’s environmental standards improved. Perhaps you are an astute political observer, FM, but your science is lacking.

    *** You cite stuff that has no relevance to your assertions, then declare victory. Your said “they are no longer capable of feeding their own populace”. You have given no support for that. Yes, they could produce more food. So could we. It’s not relevant to your claims.

    “I’m sorry, but to compare the toxicity[sic?] of London’s industrial revolution with China’s is a comparison I can’t take seriously.”
    FM: “And the reason for that is? Coal smog was a major killer. The epidemiological effects of poor santitation are well-proven. Why is this difficult for you to understand?”
    Because the scale is vastly different, FM. This should be obvious.

    *** The scale is different, but you have it backwards. The epidemics from poor sanitation in London until the 20th century have no equivalent in modern China. Even then there were horrific problems. The Great Smog of 1952 “caused or advanced the death of 12,000 Londoners, and made 100,000 ill.” On a population one-fourth that of modern Bejing.

    FM: “I suspect the emerging nations will clean up as well.”
    Yes, they will… and that’s the crux of the matter isn’t it? What will the cost of that be?
    FM: “We don’t know, or need to know. They control their destiny, and I trust that they will manage just as well or (probably) even better than we have.”

    This is all besides the point, FM. My assertion remains that their economic expansion and dominance should be questioned. You have offered *nothing* to counter this but pat assertions like “I trust they will manage well”. What does this have to do with anything?

    *** China has already initiated large programs to improve their environment. You seem to assume they are stupid, that you see and understand China’s problems better than they do. I doubt that.

    I hope they do too and trust they will. Until then, I don’t see that change you’re talking about.

    *** Have you looked? Read China Daily, and you will see that they are aware of these problems and acting on them. For more on this see comment #16 below. It will take time, just as it did for the US and Europe to start on this road.

  13. Re ‘failed state’. I was going by other more economically-based definitions (read years ago so no links) by which criteria America already demonstrates surprising convergence. But in terms of the four criteria you cite above from {the Fund for Peace}, only the first seems secure, the other three are increasingly wobbly though agreed not really to a degree one could characterize as outright ‘failure’. And if things get worse on the domestic front, we might see more outright confrontation between States and the Federales viz. #1.

    The Fund for Peace:
    * loss of physical control of its territory, or of the monopoly on the legitimate use of physical force therein,
    * erosion of legitimate authority to make collective decisions,
    * an inability to provide reasonable public services, and
    * an inability to interact with other states as a full member of the international community.
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    Fabius Maximus replies: For comparison, below are the 20 worst failed states from the 2008 Fund for Peace list (the bottom 17%, including the ones most often called failed states). The odds of the US looking anything like them in the next 2 generations — or next 4 or even 8 — is remote, IMO.

    1. Somalia
    2. Sudan
    3. Zimbabwe
    4. Chad
    5. Iraq
    6. Democratic Republic of the Congo
    7. Afghanistan
    8. Côte d’Ivoire
    9. Pakistan
    10. Central African Republic
    11. Guinea
    12. Bangladesh
    13. Burma/Myanmar
    14. Haiti
    15. North Korea
    16. Ethiopia
    16. Uganda
    18. Lebanon
    18. Nigeria
    20. Sri Lanka

  14. Well, that list is likely going to be out of date soon. That list above was made before the developed-world ‘recession’ which looks likely to cause meltdown in the next 6-18 months. Hopefully it won’t. But if it does the list will doubtless include:

    Many Eastern European states such as Latvia, Estonia, Ukraine, Hungary; possibly UK in total default with Scotland seceding; (not calling Israel a ‘failed state’ already in the list above makes one wonder what their definition is, in that destabilising an entire region for decades, living off other countries’ largesse, causing death and forced homelessness etc. doesn’t qualify;) If things get really bad, then more established countries like Italy, France, Russia and so forth might also get more than a little ‘wobbly’; But they are probably structurally more sound than the US which, without further priming of the debt pump, might find itself a rather hollowed out ghost of its former self, so the US should be in the first tier of large, developed nation states potentially vulnerable to serious systemic dysfunction in the near future; if this happens, it will function as a failed state in the international order with all the instability and balance of power ripple effects throughout the world this involves (one of the earlier usages of the term).

    Let us hope this all remains hypothetical. Meanwhile, a recent ‘failed state’ style article:
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    Fabius Maximus replies: No mas of this nonsense, please. You totally miss the point of “failed states.” To folks without tin foil hats there are low odds of the nations you mention becoming failed states, like Sudan. Your link to another member of the tin-foil-hat brigade is IMO unimpressive, with its facile and nonsensical talk about the US becoming a 3rd world nation.

  15. Tso articles about China’s efforts to clear its environment

    (1) We Must Seize the Energy Opportunity or Slip Further Behind“, Ben Furnas, Center for American Progress, 20 April 2009 — I recommend reading this! Excerpt:

    A February analysis by HSBC Global Research in Hong Kong projects that nearly 40 percent of China’s proposed $586 billion stimulus plan—$221 billion over two years—is going toward public investment in renewable energy, low-carbon vehicles, high-speed rail, an advanced electric grid, efficiency improvements, and other water-treatment and pollution controls. This stimulus is on top of historic levels of government spending and private investment in renewable technology, energy efficiency, and low-carbon growth all across China. The upshot: China, according to a recent analysis, is “the largest alternative energy producer in the world in terms of installed generating capacity.”

    This massive stimulus plan will spend over 3 percent of China’s 2008 gross domestic product annually in 2009 and 2010 on green investments—more than six times America’s green stimulus spending as a percentage of our respective economies. This is about $12.6 million every hour over the next two years. In the United States, the American Recovery and Reinvestment Act invests $112 billion in comparable green priorities over the next two years, about half as much as China, according to HSBC. This represents less than half of one percent of our 2008 gross domestic product.

    (2) Cities set to jointly fight air pollution“, China Daily, 23 April 2009 — Excerpt:

    Ensuring clean air will no longer be the task of a single city – it will be the responsibility of a cluster of cities whose pollutants affect each other, according to a plan being finalized by the government.

    The economic and industrial hubs – the Yangtze River Delta, the Pearl River Delta, and the Beijing-Tianjin-Hebei region – will be the pioneers executing the plan, Environmental Protection Minister Zhou Shengxian said while presenting a report on controlling air pollution to the top legislature yesterday.

    The plan is likely to include regional emission caps, Zhang Lijun, vice-minister of environment, told reporters. He said the plans, which are being drafted, are expected to take effect from the beginning of the 12th Five Year Plan (2011-15). Zhou said the three regions will take the lead because “they see concentrated air pollutant emissions, and suffer heavy air pollution”.

    According to ministry figures, the three regions occupy only 6.3% of the country’s area but consume 40% of the country’s coal and produce half of its steel. They are also home to at least 200 million people.

  16. The Ds and Rs are too busy paying off their supporters long after our elections to bother with making rational investments in our future.
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    Fabius Maximus replies: Sad but true. For more on this I recommend reading “The Coming of the Fourth American Republic“, James V. DeLong, The American (published by the American Enterprise Institute), 21 April 2009 — “The Special Interest State that has shaped American life for 70 years is dying. What comes next is uncertain, but there are grounds for optimism. ” Hat tip to the Instapundit.

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