Random Thoughts from the High Desert
Written by Sig Silber
The U.S. “Empire” has grown considerably from the way it was viewed in 1898 according to this map found in Wikipedia here. There is an insert in this map showing the U.S. Empire a hundred years earlier. We are now in 2014 and some people are wondering if the U.S. Empire is on the verge of collapsing. That is certainly a pertinent question.
To answer this question one might usefully consider the internal condition of the U.S., the external environment in which the U.S. exists, and possibly the World currency situation. With respect to the first question perhaps there is no better source of information than the geopolitical intelligence advisory firm Stratfor, and George Friedman, the founder of that firm, in particular. So let’s examine his assessment.
I was particularly impressed with the following comments from the recent Friedman article on Romania which can be found here.
“But such calculations matter only in wartime, and the Russians are inherently weak. Their single advantage is energy exports, and that advantage depends on the world price of oil, where they make their real profits. They do not control that price and in the future it is possible that the United States, suddenly a massive producer of oil, will be pushing the price downward. If that happens, there is little left for them.”
For the purpose of supplying some metrics, Russia has a population of about 143 million and declining and a per capita income of under $15,000 (and by some sources only half of that). It has a large nuclear fleet but nowhere near the population or economy to challenge the U.S. except near its borders.
“To many in Romania, Russia is near and strong, America far and indecisive. This was pointed out to me at one meeting. I replied: “In the 20th Century, the United States has won three wars in Europe. How many have the Romanians won?“
“The most remarkable thing about Romania and even Europe as a whole is that in spite of the historical reality that the United States wins European wars, there is a view of the United States that it is naive, unfocused and bumbling. This goes beyond this administration to every administration I can recall. And yet, it is the United States that decides the fate of Europe consistently.”
“The Romanians know this, but they still feel that the Russians are more clever and capable than the United States. I think the reason is that the Russians move with enormous subtlety and complexity. They do this to compensate for their weakness. The United States operates more simply. It can afford to; it is playing from strength.”
And this older 2010 quote from an article that can be found here.
“The Russian-German Relationship
In many ways, this matter doesn’t rest in these states’ hands. It depends partly on what Russia wants and plans to do and it depends on what Europe wants and plans to do. As always, the Intermarium (author’s notes: a proposal by Poland’s Józef Piłsudski for a confederation of nations stretching from the Baltic to the Black Sea) caught between Russia and Europe. There is no southern European power at the moment (the Austro-Hungarian empire is a memory), but in the north there is Germany, a country struggling to find its place in Europe and in history.
In many ways, Germany is the mystery. The 2008 and Greek economic crises shocked the Germans. They had seen the European Union as the solution to European nationalism and an instrument of prosperity. When the crisis struck, the Germans found that nationalism had reared its head in Germany as much as it had in other countries. The Germans didn’t want to bail out the Greeks, and the entire question of the price and value of the European Union became a central issue in Germany. Germany has not thought of itself as a freestanding power since 1945. It is beginning to think that way again, and that could change everything, depending on where it goes.
One of the things it could change is German-Russian relations. At various times since 1871 and German re-unification, the Germans and Russians have been allies as well as mortal enemies. Right now, there is logic in closer German-Russian ties. Economically they complement and need each other. Russia exports raw materials; Germany exports technology. Neither cares to be pressured by the United States. Together they might be able to resist that pressure. There is a quiet romance under way between them.”
So far Germany and Russia have not seen fit to challenge the U.S. Perhaps both see little value to them of such an approach. It is possible but unlikely that U.S. foreign policy, no matter how inept, will bring these two historical adversaries together.
But what about Asia and in particular China? Let’s start with this article.
“The crux of China’s demographic challenge lies in the fact that, unlike Japan, South Korea, the United States and Western European countries, China’s population will grow old before the majority of it is anywhere near middle-income status, let alone rich. This is historically unprecedented, and its implications are made all the more unpredictable by its coinciding with the Chinese economy’s forced shift away from an economic model grounded in the exploitation of inexhaustibly cheap labor toward one in which young Chinese will be expected to sustain the country’s economic life as workers and as consumers. A temporary reprieve from the demographic crisis will be difficult but possible with reform, but a long-term solution is far out of reach.”
And then there is this article having essentially dismissed China as remaining strong into the future, deals with successors to the curent Chinese Asian Hegemony.
“China has become a metaphor. It represents a certain phase of economic development, which is driven by low wages, foreign appetite for investment and a chaotic and disorderly development, magnificent in scale but deeply flawed in many ways. Its magnificence spawned the flaws, and the flaws helped create the magnificence.
The arcs along which nations rise and fall vary in length and slope. China’s has been long, as far as these things go, lasting for more than 30 years. The country will continue to exist and perhaps prosper, but this era of Chinese development — pyramiding on low wages to conquer global markets — is ending simply because there are now other nations with even lower wages and other advantages. China will have to behave differently from the way it does now, and thus other countries are poised to take its place.”
Then “End of the Chinese Miracle” further puts things into perspective.
“The major shift in the international order will be the decline of China’s role in the region. China’s ability to project military power in Asia has been substantially overestimated. Its geography limits its ability to project power in Eurasia, an endeavor that would require logistics far beyond China’s capacity. Its naval capacity is still limited compared with the United States. The idea that it will compensate for internal economic problems by genuine (as opposed to rhetorical) military action is therefore unlikely. China has a genuine internal security problem that will suck the military, which remains a domestic security force, into actions of little value. In our view, the most important shift will be the re-emergence of Japan as the dominant economic and political power in East Asia in a slow process neither will really want.”
Roger Baker appears to be Stratfor’s go to person for Asia and here discusses China’s recent bellicose behavior adding depth to the prior analysis.
“The Chinese navy has undergone a significant modernization program over the past decade. Still, it is far from ready to compete head to head with the Japanese navy, much less with Japan’s treaty ally, the United States. Modernization efforts and the fleet-building program have yet to make for a superb Chinese navy, nor would having superb sailors. A superb navy requires organization, doctrine, principles and most of all experience. The main problem constraining China’s navy is not its shipbuilding or recruitment, but its limited ability to truly integrate its forces for war fighting and fleet operations. This requires substantial knowledge and training in logistics, cooperative air defense and myriad other complex factors.
There really is only one real measurement for a navy: Its ability to win against its likely rival. Part of determining the quality of a navy depends upon its technology and part on doctrine, but a substantial part is actual experience. China’s navy has little war-fighting experience, even in the past. This has substantially limited the number of individuals within the officer corps knowledgeable or capable of effective operations in the highly complex world of modern military engagements. The Chinese navy may have new technology and be building toward numerical superiority, but it faces off against a U.S. Navy with centuries of experience and generations of admirals schooled in combat. Even the Japanese navy has more than a century of experience and a tradition of maritime warfare. The lack of combat experience significantly limits China’s naval capability.”
I have to acknowledge that others such as this article are more concerned about the Chinese military threat. But I conclude that the Chinese economy will only allow them to be a threat to their close neighbors. Many articles by Michael Pettis some of which was summarized recently by Worth Wray for Mauldin Economics and can be found here suggests to me that China will be lucky to remain intact as a single nation rather than being a serious threat to its neighbors let alone the U.S.
And apparently Stratfor has a lot of respect for the perspective of the Journal Strategic Review which discussed the role of ASEAN, the Asian equivalent to NATO, here.
Does the U.S. have an Empire?
Of course one has to ask if there is such a thing as a U.S. Empire. This of course requires a definition of “Empire”. Possible characteristics of an Empire and my assessment of how the U.S. scores against those characteristics at the end of WWII and today are shown in the following table.
|Factor||Status End of WWII||Status Today||Trend|
|Occupation of Territory||Europe, Iceland, Philippines, Japan, Korea, many Islands||Only Puerto Rico and many minor islands||Expansion Unlikely|
|Projection of Military Strength||Totally Dominant Other than Soviet Union||Effective outside the U.S. only against third-rate militaries but unassailable within the Mainland U.S. ||Will decline but still far exceed any single adversary|
|Influence on Policy of Other Nations||Total||Minor if any||Zero may be the upper limit i.e. no influence.|
|Cultural Influence||Incipient||Very significant||Will gradually decline|
|Pound Sterling and gold were essentially displaced by the U.S. Dollar after WWI. ||U.S. Dollar remains dominant but other currencies and commercial arrangements have gradually eroded the dominant role of the U.S. dollar||Most likely will remain the major reserve currency for the foreseeable future|
|Gains from Trade||Growing dependence on imported oil||Still significant relative to controlling the cost of living ||Declining as labor unit cost becomes increasingly irrelevant |
|Economic Dependence Ratio||If we needed something, we could and did take it. ||A a nation that runs a permanent negative current account balance, the U.S. is less dependent on the trade policies of other nations unless they have something important for which we have no substitute. ||Tending towards zero. This has important implications re possible isolationist sentiment in the U.S. |
Stratfor shows us that the U.S. has no conventional enemies. Asymmetrical warfare is still possible i.e. terrorism but there is no challenge to the U.S. military hegemony.
Next week I will discuss the economic balance of power. Also, one has to refine the question from “Is the U.S. Empire at Risk?” to include the question of “What is the Value to the U.S. of Maintaining an Empire?’