Most Popular Choices
Share on Facebook 28 Printer Friendly Page More Sharing
OpEdNews Op Eds    H3'ed 5/5/14

The world has nothing to fear from the US losing power

By       (Page 1 of 1 pages)   3 comments

This piece was reprinted by OpEd News with permission or license. It may not be reproduced in any form without permission or license from the source.

Cross-posted from The Guardian

As China looks set to overtake the US as the world's largest economy, a multipolar world can only be good for democracy

The China Center, which assists Chinese investors and companies in the US, will be one of the biggest tenants in One World Trade Center, taking up six floors and 190,000 square feet of office space.
The China Center, which assists Chinese investors and companies in the US, will be one of the biggest tenants in One World Trade Center, taking up six floors and 190,000 square feet of office space.
(Image by Photograph: Paul Owen/The Guardian)
  Details   DMCA

The news that China will displace the US as the world's largest economy this year is big news. For economists who follow these measurements, the tectonic shift likely occurred a few years ago. But now the World Bank is making it official, so journalists and others who opine on world affairs will have to take this into account. And if they do so, they will find that this is a very big deal indeed.

What does it mean? First, the technicalities: the comparison is made on a purchasing power parity (PPP) basis, which means that it takes into account the differing prices in the two countries. So, if a dollar is worth 6.3 renminbi today on the foreign exchange market, it may be that 6.3 renminbi can buy a lot more in China than one dollar can buy in the US. The PPP comparison adjusts for that; that is why China's economy is much bigger than the measure that you have most commonly seen in the media, which simply converts China's GDP to dollars at the official exchange rate.

The PPP measure is a better comparison for many purposes. For example, take military spending: the money that China needs to build a fighter jet or pay military personnel is a lot less than the equivalent in dollars that the US has to pay for the same goods and services. This means that China has a bigger economy than that of the US, for purposes of military spending. And in a decade, the Chinese economy will most likely be about 60 percent bigger than the US economy.

President Obama has just returned from a trip to Asia where he was criticized for not being tougher with China. However, Americans may want to consider whether "containing" China with a "pivot" to Asia is an affordable proposition. When the US had an arms race with the Soviet Union, the Soviet economy was maybe one-quarter the size of ours. We have not experienced an arms race with a country whose economy is bigger than ours, and whose economic size advantage is growing rapidly. Are Americans prepared to give up Social Security or Medicare in order to maintain US military supremacy in Asia? To ask this question is to answer it.

Fortunately, such an arms race is not necessary. China is a rising power, but the government does not seem to be interested in building an empire. Unlike the US, which has hundreds of military bases throughout the globe, China doesn't have any. The Chinese government seems to be very focused on economic growth; trying to become a developed country as soon as it can. Since China has 1.3 billion people, having an economy the size of the US means that average living standards are less than one-fourth of ours. They have a long way to go to become a rich country.

Of course, just because an arms race is unnecessary or unwinnable doesn't mean it can't get started. The Washington foreign policy establishment is much accustomed to the authority, prestige, and privilege of being the overwhelmingly dominant power on the planet. And as we saw during the eastward expansion of NATO in the 1990s -- now coming back to haunt us in a new cold war with Russia -- there are politically powerful military contractors that can also have a voice in US foreign and military policy.

The American people, according to polling data, are of another point of view. They are largely tired of unnecessary wars and mostly sympathetic to Obama's response to critics while in the Philippines: "Why is it that everybody is so eager to use military force, after we've just gone through a decade of war at enormous cost to our troops and to our budget?" It is arguable that the only reason our government is able to maintain an imperial foreign policy is that so few Americans serve in the military and pay the ultimate price for it.

Still, there is a powerful ideology of American exceptionalism and a widespread belief that if the US does not run the world, somebody worse -- possibly China -- will. The fact that the US and its European allies still have more democratic societies with more developed rule of law than most middle-income countries -- despite the setbacks of the past decade -- reinforces this notion that the world will be worse off if the US loses power and influence.

But the US lost most of its influence in Latin America over the past 15 years, and the region has done quite well, with a sharp reduction in poverty for the first time in decades. The Washington-based International Monetary Fund has also lost most of its influence over the middle-income countries of the world, and these have also done remarkably better in the 2000s.

In the 18th century, those who opposed democratic revolutions like that of the United States had dystopian visions of governance without monarchy. So, too, our foreign policy establishment cannot imagine a multipolar world where the US and its allies must negotiate more and give orders less often. But economic trends are making this reality inevitable, and Americans should embrace it. Whatever the internal political systems of the countries whose representation in the international arena will increase, the end result is likely to be more democratic governance at the international level, with a greater rule of international law, fewer wars, and more social and economic progress.

Must Read 1   Well Said 1   Valuable 1  
Rate It | View Ratings

Mark Weisbrot Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

Mark Weisbrot is co-Director of the Center for Economic and Policy Research in Washington, D.C. He is also the author of "Failed: What the 'Experts' Got Wrong About the Global Economy (Oxford University Press, 2015)."

He writes a weekly (more...)
 

Go To Commenting
The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.
Writers Guidelines

 
Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
Support OpEdNews

OpEdNews depends upon can't survive without your help.

If you value this article and the work of OpEdNews, please either Donate or Purchase a premium membership.

STAY IN THE KNOW
If you've enjoyed this, sign up for our daily or weekly newsletter to get lots of great progressive content.
Daily Weekly     OpEd News Newsletter
Name
Email
   (Opens new browser window)
 

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Snowden, Greenwald and Wikileaks are winning

Assange case: Sweden's shame in violating human rights

The Trans-Pacific Partnership treaty is the complete opposite of "free trade"

GOP's assault on women bogs down in the quicksand of free contraception

Bernie is Not a Radical - He is a Pragmatist

The truth about Venezuela: a revolt of the well-off, not a "terror campaign"

To View Comments or Join the Conversation:

Tell A Friend