> USA is superpower at the peak.
That remains to be seen
> Argentina used to be richest country in the world.
That is not true. In the early 20th century they were top 10, but never surpassed Britain or the US in GDP per capita.
That remains to be seen
> Argentina used to be richest country in the world.
That is not true. In the early 20th century they were top 10, but never surpassed Britain or the US in GDP per capita.
The fact that it remains to be seen is kind of the point. It is possible that it is at peak, and if it is true, then it is likely that historical data is not very useful in understanding market returns.
It assumes that the future will look like the past, even though there are some plausible reasons to think that it won't.
Some of those reasons would push you harder in the direction of investing in stocks (e.g. increasing automation, globalization) and some would push you in the opposite (e.g. declining gdp growth, rising inequality, political instability).
What would a more powerful USA look like? It doesn't appear that the country is after an empire the same way the British had one 100 years ago, so raw aggression is out. I can't imagine a realistic scenario that doesn't require the implosion of other nations to embiggen America.
Not saying it would happen but I think that's one scenario that would be even "more powerful".
Passenger rail; durable houses; less unemployment and more labor-force participation; a population not balkanized along political/cultural lines.
I mean, there is "always" going to be jobs for plumbers and spots for artisan made stuff... but those jobs aren't going to replace the amount of jobs that will be lost when $15 becomes more expensive than iRobot...
I don't know where it would come from (perhaps the same magical unicorn tooth fairy who would remove balkanization, inspire durable construction, and give us more passenger rail), but the US would look a lot stronger if it had it.
This includes politically stronger; poverty, disengagement from the labor force, and high inequality are not good for a country's political stability.
Not fast enough to replace the abolished ones, and most of those new jobs are knowledge work, which can't scale as there's a IQ floor that will stop most people from being able to work them. The more we shift to knowledge work, the higher unemployment will climb. You're making the mistake of thinking the past predicts the future, but today's automation is unprecedented, it will not follow the same pattern because it has different effects.
50 years ago there was 'America', the 'Soviets' and 'Europe'. Everything else was a footnote.
What we've seen with China 'coming out of nowhere' in the last 25 years is about to happen 4x with the rest of the world.
America and Europe's share of global economy is falling fast, and it simply has to do with electricity, plumbing, democracy, knowledge and productivity gains in the rest of the world.
India is coming on a little slowly, but surely.
Pakistan is 180 Million people. Nigeria almost that - and they have oil.
Africa is a billion people.
There are a lot of Asians outside of China, India and Japan.
As they start to become connected to the global economy, relative power shift will happen.
I don't see the emergence of any new 'superpower' and America will likely remain the only 'superpower' in the classical sense, but it won't be as powerful as it is today - relatively speaking.
If you look at the growth of Japan after WW2 - a period of fast growth, then slowing down as it approaches parity with the west - this is what the underdeveloped world will look like, but a little slower.
Also - a very important point - a lot of real growth is not measured in the GDP.
For example, the value that is created by governments is measured simply in 'government spending'. But $1 of gov. spending hopefully creates more value than $1!
For example, if the US Gov spent $50B and created this amazing national public transport system that everyone used, and cost next to nothing - the 'economic surplus' would be massive, but the GDP would directly be down. Why? Because the only thing that would count towards the GDP would be the $50B spent by the gov, not the $Trillion in value derived from it. Obviously, there would be indirect business benefits ... point being - the GDP is not necessarily the best way to measure things for many obvious reasons.
Maybe. But the trend towards privatising military force could end up accelerating USA's slide down in terms of military power. If we are indeed moving back to the "normal" (historically speaking) "neo medieval" world were military force is generally mercenary and not national standing armies - coupled with the commodization of advanced military technology - the world could radically change quite quickly.
Maybe the USA won't be able to pay its contractors - and China and/or Russia can? Maybe China will restructure the PLA as the world's biggest military contractor?
I don't really think you are wrong - but it can be tricky to predict the future. Perhaps especially the sudden stumbles we seem to make every so often as a species back into new dark ages and decent into chaos.
+ This is a very marginal thing.
" If we are indeed moving back to the "normal" (historically speaking) "neo medieval" world were military force is generally mercenary and not national standing armies"
+ This is not happening. Don't worry about it.
Listen - war is too expensive. It is only economically advantageous when the parties are not interconnected.
Some American businesses can economically from a war in Iraq by getting big contracts ... but a war with any real nation would cause massive upheaval in markets.
The moment Brexit happened - it was a big shock to markets - and that was a small thing.
90% of people and businesses 'lose' in a big war, so it's very, very unlikely that China, Russia, USA get involved directly in a war - it's just too costly for everyone. USA is China's #1 customer.
The only 'rising military power' that will make a difference is China.
Everyone else - won't matter.
It's also very, very expensive to challenge the Americans in any way, even regionally, so the only actors that will do it are non-state entities, i.e. insurgents like Al Qeda etc..
The 'big shift' over the next 50 years is that 4 billion people who are not even on the radar today are going from $2 a day, to $50 a day in terms of GDP.
Don't forget that "the end of war" as proclaimed after world war one - because a new world war would be too costly, and too horrible for anyone to contemplate. Of course no one will start a war they think they will lose. You start wars you are "certain" you will win. And then they escalate. And escalate.
> The 'big shift' over the next 50 years is that 4 billion people who are not even on the radar today are going from $2 a day, to $50 a day in terms of GDP.
I absolutely agree that this is going to be the biggest change. With accompanying logistics, new (political and economical) battles over water rights and so on. If there's a new "private" war, I'm guessing it will start with a large contractor being hired by some regime to "calm down" "unreasonable unrest" over stealing natural resources and handing them over to corporations, like for example privatizing water (or as one can see in Niger, privatizing oil).
I certainly hope we won't see a third world war, but I'm also afraid of people that seem to think that large scale war is "unlikely". Nothing in history suggests that it is.
[ed: And "insurgents" are likely to always be proxy wars. The US created the modern resistance in Afghanistan to fight Sovjet power, and then end up fighting that same insurgency, now supported by Saudis, which are allies on paper.]
US empire is defined more by squashing incipient threats to its global hegemony than by UK-style colony management.
The US empire is doing precisely that, through a mixture of soft and hard power.
Both have imperial dynamics, but for the U.S. the important part is being the "world's policeman" as it comes with the authority to destabilize regions and install puppets where their sovereign governments may act against U.S. interests. With this more limited administrative footprint, they're free to focus on use of violence and propaganda, while taking up domestic market policies that benefit net importer businesses and thus justify maintaining the empire.
Where people say that the Pax Americana is ending it is in part because the dynamic has grown more multipolar since the end of the Cold War, with a diverse group of nations asserting their interests without being overthrown.
"Superpower" is better.
It also influences other countries to an extent which is similar to other empires like the British did. It invades countries to keep trade going, and it's companies dominate the world much like the companies of the British empire did.
The only difference is that the US has finished expanding.
So what really constitutes an empire? Does it need an emperor? Does it need to constantly be questing to expand in lands?
War: True, the US engages in war, and the British Empire engaged in war. But so have many countries that were no empires. When the US engages in war, it leaves and tries to set up a gov't as the new authority. This has worked well (Japan, Germany, etc.) and not so well (Iraq, South Korea initially).
Companies: Imperial British companies literally captured their markets -- they had their own armies! The British East India Company for example came to rule much of the subcontinent, with their own soldiers! Subjects of British imperial rule were told what to trade. They might have done well for themselves sometimes (or been devastated at other times), but in any case the relationship was clear.
Global leadership: The US took the mantle as global leader from the British. This wasn't desired. Indeed after WWI the US refused to play leader. Some historians believe that WWII could have been avoided if the US would have fulfilled its duty as most powerful to provide leadership.
After WWII the US became serious about being a leader, by which I mean taking the initiative on issues of global coordination, both security-wise and financial. This is another reason the US is so easily confused with an empire. The UN, IMF, World Bank, NATO, Bretton Woods, these were largely American initiatives, but they were not imperial dictats.
Again, the importance in my way of thinking is that countries with relationships with the US are not subjects of the US. That is the key distinction that must never be forgotten.
A question: In your way of thinking, is the EU an empire?
All other uses of the term are metaphorical. We can talk about the McDonald's hamburger empire.
When we talk about the American Empire, we're also using the term metaphorically, because think what you will of the US, but it doesn't rule as a supreme authority over anything but a few islands. It may have friends, allies, interests, influence, bargaining power, but it has no subjects, no subjugated peoples. It may have largely founded what is now the world's economic and security order after WWII, but those are all voluntary.
The problem is that the overlap between superpower and empire makes the term empire confusing in the American case. "Powerful like an empire" and "an empire" are very different.
When we talk or think about the "American Empire", we seek similarities and ignore differences with the Roman Empire, European colonial empires, even the Athenian Empire or Soviet Empire. It makes it sound like the US can tell other countries what to do as it pleases, that the US rules over others. That's a very important mistake, even a dangerous mistake. Allies are not subjects. When a country asks the US military to leave, it leaves. See the Philippines as a good example (and further back as an example of the bad old days, when the US was briefly interested in having a real empire).
Today's US is an empire in the sense that Microsoft is an empire -- it is an empire of the willing who can leave whenever they like.
And if you can leave whenever you'd like, it's not a real empire.
This has happened! In the past 30 years, no less.
We haven't experienced Total War in our lifetime (thankfully), but when referencing the imperial dynasties in history as being more noticeable, it's usually because the wars they held were total.
Of course, the more active a fund is, the farther it gets from zero sum, but it would never be fully zero sum.
Additionally, financial services overall are far from zero sum. There is a great deal of efficiency and market lubrication created by financial services and if you exclude the high frequency traders, you leave a huge majority that is still quite beneficial to people on both sides of the transaction.
Once again, that depends on the trade, short term trades don't make their money from dividends, but from timing the market.
> Additionally, financial services overall are far from zero sum.
Beside the point, plenty of them are zero-sum-never said they were all zero-sum; that exception exist doesn't change the point that zero-sum vs non-zero-sum is a false dichotomy, the real world is both zero-sum and non-zero-sum, depending on the way the wealth is being generated. It's tiresome watching people continually repeat the incorrect mantra that wealth isn't a zero-sum game when quite often, it is.