Power Without Production


shutterstock_217626877About 33 minutes into the last Ricochet Podcast, Bret Stephens added his voice to the chorus suggesting we shouldn’t overly fret about China because their economic numbers are rigged and their production levels are nowhere close to our own, however quickly they are improving. Alright, let’s suppose that China’s economy is truly lackluster. Does that make it less of a diplomatic and military threat?

The Soviet Union was doomed from the start for the simple reason that communism doesn’t work. The USSR survived by claiming territories and sucking the life out of its members, which it could only do for so long. It’s economy never had a chance in the long run.

But that inevitability didn’t matter for half a century.

Americans across the nation constructed bomb shelters. We kept bombers in the air at all times so the Soviets would be certain that we could retaliate if they attacked American soil with nuclear weapons. We fought proxy wars in Asia and South America. Soviet spies infiltrated our government and media. The US invested countless resources in technological competition to maintain military advantages. Conservatives’ most revered president in living memory made defeating the Soviet Union his top priority.

Production isn’t everything. It’s significant, but it does not by itself determine global influence.

That said, I doubt China is presently a threat to our homeland. But it can upset our interests abroad and weaken our position in the world. That’s worth a little fretting.

There are 8 comments.

Become a member to join the conversation. Or sign in if you're already a member.
  1. Steve C. Member
    Steve C.

    It’s not that China represents a direct threat to the continental US, it’s the potential threat to our Asian friends and allies. And I’m not sure how much of an actual threat exists. Each of the nations bordering China has a different mix of concerns. Taiwan is rightly concerned about being assimilated, whether by occupation or by gradual isolation. Japan has some very serious karmic debts they still owe to China. The Phillipines and Vietnam happen to be in the way of an emerging neo-imperial power. The last thing the Koreans need is for China to mishandle their junk yard dog and precipitate a refugee crisis and a possible last roll of the dice attack across the DMZ.

    I tend to agree with those who describe China as being in the same position as Wilhelmine Germany. There are some important differences. The Germans were hemmed in by peer competitors and their emperor was not a serious politician, he often acted without considering the long term consequences. I credit the Chinese politburo with a good deal more sense. I do think China is attempting to expand its regional influence, but also to pursue a foreign policy that plays to the jingoistic propaganda fed to the public. In simpler words, post Bismark, the Germans didn’t have a strategy. That proved their undoing. The Chinese do have a long view and an approach matching their goals.

    Our primary actions should consist of reassuring our allies that they have our full support. Taking those actions that make our commitments credible.

    • #1
  2. J Flei Inactive
    J Flei

    Aaron Miller:That said, I don’t believe that China is presently a threat to our homeland. But it can upset our interests abroad and weaken our position in the world.

    Isn’t it probable that Chinese hackers were behind the North Korea thing?  That is one way China could be a more direct threat.

    • #2
  3. Petty Boozswha Inactive
    Petty Boozswha

    Unless the business cycle has been repealed for China in perpetuity, we haven’t really been exposed to what kind of threat they might present. The Communist Party’s only claim to legitimacy is that they provide order to allow economic growth. What happens when they get a real shock to their system? I think there’s a reason they are holding two trillion dollars in liquid assets abroad – analogous to Americans in the 1840’s investing in British manor houses instead of railroads.  The reason is the elites know a day of reckoning is coming and they want to have an escape clause. But what kind of Falklands War will they look for to divert public attention?

    • #3
  4. Frank Soto Contributor
    Frank Soto

    We should note that Stephen’s critique of using PPP as a factor in measuring economies is only half valid.

    Yes China doesn’t have great external purchasing power, but they are producing an ever growing percentage of what they need internally, and the cost of those goods to their people is an important factor in rich they are.

    I don’t know anyone who seriously thinks PPP is sleight of hand.  Not factoring cost of living is foolish because without it, you don’t have an accurate idea of how much surplus people actually have.

    • #4
  5. user_1938 Member

    Right. Their people don’t need to live well in comparison with Americans to build a capable military. And the Chinese government doesn’t have to pay competitive prices for weapons and supplies.

    Also, as I argue in the podcast thread, it’s worth considering China’s means of profiting without producing goods and services. They have been buying control of raw resources in Africa and elsewhere in recent years.

    • #5
  6. carlboraca@gmail.com Inactive

    I’m with, Bret, you can’t believe those crazy numbers from the PRC.  What’s the U.S. unemployment rate again? 5.8%?  Odd, seems like it should be higher than that.

    • #6
  7. Steve C. Member
    Steve C.

    Purchasing scads of natural resources overseas would turn out to be of little use if you don’t have naval power to ensure it can be delivered. If nothing else we’ve learned that ownership of foreign based assets is only as secure as the host nations desire to be on good terms with the U.S.

    • #7
  8. AIG Inactive

    Am I missing something here?

    China isn’t a threat to the US. Militarily or otherwise. Taiwanese own half of China. They don’t seem to be worried. Japanese and Koreans own the other half. They don’t seem to be worried. China wants to continue trade.

    They invest in natural resources in third world countries because they’re the only ones who can, and are willing to. It’s not as if American companies are clamoring to get into…Sudan, for example. So someone has got to do it.

    Why do people insist of thinking about everything in terms of “conflict”? What’s the conflict here? You think the Chinese are stupid enough to get into trouble with the countries that they depend on economically?

    You think the Chinese buy US government bonds, because they think that they are in a “conflict” with the US?

    • #8

Comments are closed because this post is more than six months old. Please write a new post if you would like to continue this conversation.