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.