I will cut to the chase and tell you that this book is
the most brilliant discourse on world economics and its history I have ever
read. If you have ever worried about China one day over taking the United
States in your life time or that of your grandchildren’s, this book will
eliminate those sleep depriving thoughts.
A sub title for the book could have
been The reality of China's declining path to progress. One must care about both history and the realities of economic
outcomes to fully enjoy the abundant supporting information that Joffe presents
to his readers. But even a speed reader will discover a bounce in their
step when the journey through its pages is complete. And if education is your
main concern, buy the book just to read the chapter Challengers and Champions to know how well we are doing as a
nation in spite of the impediments placed in our way by our government
and its teachers unions.
The myth of our decline is mainly homemade by our
resident doomsayers, originating in the 1950s, when Sputnick’s launch made
Russia look pre-eminent and then reenacted once every decade with the threat
from another country. But if history has one certain message, it is the
transience of spectacular growth, a fate that may have already overtaken China
as it did earlier to Russia, Europe and Japan.
Joffe succinctly summarizes the historic ups and downs of
the Kennedy, Johnson, Nixon, Carter, and even Reagan years, where he shows the
downs to be exacerbated by journalistic fictions when comparing us to what
were, in all cases, inferior competitors. It has been the incessant drum beat
of America’s shrinking global power and prestige that surfaced through the
decades, that has made our populace constantly concerned that we are sinking
slowly, while others were rising with our influence on the wane.
Indeed there have been ample catastrophes on the world’s
stage to feed the journalists and doomsayers with smoke where fire did not
exist. None offered greater fodder than Jimmy Carter with his famous Malaise
speech of 1979 which led Newsweek to print a cover story “Has the U.S. Lost its
Clout”. On the opposite
side of the coin, Reagan used these misguided feelings to propel himself into
office with his famous campaign speech “It is Morning Again in America”.
When Japan was predicted to overtake us in 1985 their
economy was one third of ours, and five years later it was half of ours. Shift
to the present and it is again one third of ours; so much for linear
projections, “tomorrow will be like yesterday.” Joffe explains to us.
“Japan’s
bureaucratically guided capitalism..demonstrated an increasing propensity to
corruption. The banking system that once gushed forth limitless capital was
mired in bad debt and cover-up. The school system? An inhuman pressure cooker
that was good for rote learning, but flunks on fresh thinking.” Now he tells us that China is following
that same scenario.
We were told that America was evolving into a nation of
hamburger flippers, pizza makers and big box store clerks, but in fact the
opposite was true. The primary indicator of national success is Gross Domestic
Product (GDP) per worker, and we have always outranked our nearest competitor
by a wide margin over the the past 50 years.
At the turn of this century globalization became the rage
and here we were destined to lose our edge. It did not happen. “The nice thing about prophecy” Joffe tells us is that doom never comes
with a date.”
The crash of 2008 gave the doomsayers new hope of our decline,
but who among the world’s nations is roaring back? Only the U.S. of A.. Usually
“Declinists” just come back, they
never repent but Roger Altman the former Deputy Treasury Secretary has done
just that with this quote, “the US banking system has recovered faster than
anyone could have imagined. Capital and liquidity has been rebuilt to
levels unseen in decades.” Joffe tells us that the United States has made
a huge leap in industrial competitiveness and can look forward to bringing back
jobs from the rest of the world. Our breath taking increase in energy
development from horizontal drilling in shale will increase our GDP a
full percentage point within five years, he says.
Joffe traces declinism throughout history beginning with
the bible itself. It has always been a mechanism to first scare people and then
offer to lead them out of despair. He quotes Matt Ridley’s The Rational
Optimist “Arch-pessimists are feted, showered with honors and rarely challenged
let alone confronted with their past mistakes.”
For some the book offers more history and statistics than
one may desire but these parts can be sped through.
Most readers will recall the recent focus on the BRICs,
Brazil, Russia, India and China, said to inherit the earth. Today they all find
themselves mired in economic turmoil, and of course the European Unions financial
crisis is everyday news. It is not clear how China could soon best a nation
like the United States that weighs in with a per person income ten times
larger. “A nation becomes neither rich nor powerful by adding 1.3 billion very
poor people”, Joffe says.
The authors analysis of our superior military power
versus all other nations is inspiring both in terms of hardware, planes, ships,
tankers and military bases, all of which dwarf the rest of the world. He
surprises us with figures that show that this is actually all very economical.
Joffe traces the economic miracles of Taiwan, South
Korea, Japan and China, explaining that none can ever last, as he says “whether it is balloons, airplanes or
economies, what goes up must come down. His basic knowledge of economics
explains the formula that cannot last” low beginnings, spectacular growth,
rising prosperity, authoritarian rule, forced capital accumulation, infant
industry protection, a high saving rate and an under valued currency”. His detailed analysis of all
the problems China has created including corruption and the wealth accrued by
its leaders is a fascinating read. He leaves no question unanswered about their
present and future. They are in a double bind that will stifle future economic
growth regardless of the political direction they go.
Joffe summarizes a presentation by a Chinese scholar in
2011 presented at Washington’s Woodrow Wilson Center assessing America’s
advantages in the global contest.
They include: population, geographic position, natural
resources, military muscle, high level technology and education, cultural soft
power, cyber power, allies, geopolitical strength, intelligence capabilities,
intellectual power and global strategic power.
In the final chapter, America, the West, and the Rest,
Joffe explains all elements of world order no longer ruled by one, two or five
nations, or even the U.S. Battles win tactical gains, no longer strategic
gains, while explaining clearly how world power created their earlier empires
over the past 500 years.
This book is difficult to put down both for the strength
of its argument and the joy it brings to the formerly pessimistic reader. In
the end you will not buy into to the doomsayer’s message again, and the state
of our current federal administration will bother you less. I am well aware
that my reviews have the feel of high school Cliff Notes, short circuiting the
need to buy the book. Trust me here that I can never come close to creating a
pale shadow of this great book. Read my review and you will smile for a day,
read the book and smile for a decade.
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