This is the first article in a series on global power.
Which country has been the most powerful throughout history? Historians, economists, and others have written extensively on this subject, often in terms of empires. Amazon lists more than 5,000 books on global empire, where empire is measured population, land mass, economy, or military power. The top five empires by population, land mass, and economy according to Wikipedia are presented below.
1. British Empire – 531.3 million (in 1938)
2. Qing Empire – 381 million in 1820
3. Soviet Union – 286.717 million (in 1989)]
4. Mughal Empire – 175 million in 1700
5. Ming Empire – 160 million in 1600
Economy (percent of world GDP):
1. United States – 35% ($1,644.8 billion out of $4,699 billion in 1945)
2. Qing Empire – 33% ($228.6 billion out of $694.4 billion in 1820)
3. Mughal Empire – 25% ($90.8 billion out of $371 billion in 1700)
4. Afsharid Persian Empire – 24% ($119.85 billion out of $494.4 billion in 1740)
5. British Empire – 24% ($265 billion out of $1,111 billion in 1870
Of course, an empire’s reach goes beyond these measures: anyone who has visited a former French colony is aware of the artistic appreciation inculcated by the French. And former British colonies typically have good legal systems. Much of the writing on empires has dealt with their dynamics: the causes of their growth and decline. In modern times, we have seen the decline of the British and other European empires and the collapse of the Soviet Union.
The US Empire
And how about the US empire? It is quite different than earlier ones in that once it acquired Alaska, it showed little interest in further direct geographic control. The American economic/military empire was probably at its peak at the end of World War Two when the economies of other major combatants had been badly damaged. Since then, the US has lost prestige as it entered into a series of ill-considered wars. John Foster Dulles started things off. He was the first of a series of important government officials who believed countries were either with or against the US (sound familiar?). For him, the enemy was communism: any communist country was the enemy.
I have spent much of my professional career working in Asia, and have concluded that the Dulles approach was absurd. Mao might have been communist, but he did not want to be dominated by Russia. But the US would not recognize his government because it was communist. When I went to the war museum in Hanoi, I learned why the Vietnamese liked Americans – the Chinese had invaded Vietnam 12 times: we had only invaded them once! Ho Chi Minh did not want to go to war with the US; he wanted the US to recognize his government to protect Vietnam from yet another invasion from the north. And who did the US finally support in the Asian theater? Pol Pot! Why? Because he was not communist! A misguided foreign policy – a belief that countries that did not agree with the US on all matters were the enemy – has plagued the US since WWII and has markedly reduced its prestige globally.
But even today, after the rebuilding of the European and Japanese economies and the emergence of China, India, and other developing countries, the US GDP is still 25% of the world total. And the US influence extends worldwide today, in large part because of its media industry. But the US is hardly the power it once was. It has become fundamentally dependent on other countries for its survival.
Consider first its energy dependency. Unlike Japan and China, the US was richly endowed with energy resources. It is even today the third leading producer of energy from oil, the second leading producer of energy from coal, the second leading producer of energy from natural gas, and by far the largest producer of nuclear energy. (See Morss, Elliott R. (2008) “Global Energy: A Factual Framework for Future Research,” New Global Studies: Vol. 2 : Iss. 1, Article 5. Some of the material in that article is available without charge here and here.)
Because of its voracious energy consumption, the US must supplement its own production of energy with imports, Despite being a leading producer of energy. It imports 21% of all oil traded internationally. Unlike the European countries and Japan who have imposed heavy taxes on motor vehicle fuels, US government policy has been to keep the gas price as low as possible. This has resulted in the US consuming almost four times as much as much oil per capita as the other OECD countries. One can argue that all empires have been resource dependent. That is why they acquired colonies. Maybe so: but the US hardly controls its oil suppliers.
Consider now its economic dependency. The US is a debtor nation. It owes $32 trillion:
- households have $11 trillion mortgage debt and $3 trillion other debt, mostly credit cards;
- business owes just under $11 trillion, while
- all US governments owe $7 trillion.
The Federal government debt is $5 trillion. Foreigners are owed 53% of that amount, or approximately $2.3 trillion. The Chinese and Japanese governments own approximately $500 billion each. They have bought this debt to absorb dollars resulting from the annual US trade deficit of approximately $700 billion annually.
The Federal debt is expected to increase by an unprecedented $1.9 trillion in 2009, and the hope is that the Chinese and Japanese will continue buying.
When it comes to military power, the US clearly still has a technological advantage. And for the last decade, it has worked to maintain is almost complete dominance in space. But as important as that will be in the future, the US military has little comparative advantage when it comes to extended land wa
The US Education System
How did the US get into its excess demand/dependency situation? Perhaps something can be gleaned by comparing the US education system to China’s, the odds-on choice to be the next global emperor. US perceptions of Chinese teaching are that it is coercive and controlling, and designed to help bright students to the top. The US views its system as open and trying to bring out the best in all students and to promote creativity.
To get a better picture of reality, it is useful to consider a recent article written by a Chinese school principal who recently spent time visiting US schools (Wu Shimin, “Opposite Extremes or Connected at the Root? A Comparison of Basic Education in China and the United States” (November 2007). He started by summarizing two studies done in the late ’70s when a Chinese team assessed US education and a US team assessed the Chinese system. The findings are summarized in the table below.
|China Assessment of US Students||US Assessment of Chinese Students|
|Arrogant and full of ambition||Very disciplined|
|Talk about innovations and inventions all day||Students get up early.|
|Can read only a few words and count with fingers||Homework” means “extension of school work at home|
|Music, art, and sports are emphasized||Only best students receive certificates|
|Math, science, and technology are virtually ignored|
|Classroom behavior out of control|
Principal Wu ended up with very positive things to say about the US system. How could that be possible? Consider the following facts:
- Only 70% of US high school students earn a degree;
- 2,000 high schools, aptly called “dropout factories”, lose 40% or more of their students between freshman and senior year;
- 14% of new high school teachers leave by end of first year, 33% within 3 years, and 50% by end of 5th year.
The above data come from The Alliance for Excellent Education.
The US was leader in nearly all measures of high school educational quality 30 years ago. It is now ranks 18th of 23 industrialized countries. US 15-year-old students rank 15th of 29 OECD countries in reading and 24th of 29 in math. In 2005 test scores showed no improvement in reading and math for high school students. And only 51% of students taking a reading assessment test in 2006 demonstrated the ability to meet college reading standards (Wisconsin Department of Public Instruction, “State Superintendent’s Adolescent Literacy Plan, 2008).
Consider now China’s history. Mao believed education and intellectuals were diverting China from its primary goals. So in 1966, he launched The Cultural Revolution. The decade-long Revolution resulted in libraries and schools being closed, intellectuals being beaten, and students were forced to suspend their schooling and work manually in rural areas. This was a fundamental educational disruption for a generation of students. But in the last 30 years, major strides have been made: the literacy rates of Chinese youths is now the same as in the US, and it is well documented that Chinese students are better prepared in mathematics than American students (H. Stevenson and J Stigler, “The Learning Gap, Why Our Schools Are Failing”, Touchstone Books, 1994). In fact, there is even evidence that ninth grade Chinese students have a better understanding of math than American school teachers! (Liping Ma, “Knowing and Teaching Elementary Mathematics: Teachers’ Understanding of Fundamental Mathematics in China and the United States”, Lawrence Erlbaum Associates, 1999). In another study of 200 teachers in the Midwest, only slightly more than half could provide an example of a number between 3.1 and 3.11 (D. Ball, “The Subject Matter Preparation of Prospective Teachers”, National Center for Research in Teacher Education, East Lansing, 1988).
This information presents a quandary: why did Principal Wu come away with such a positive impression? To understand what is going on, look the following table on high school graduation rates.
The US problem resides primarily in the underperformance of African Americans, Hispanics, and Native Indians. Principal Wu spent all his US time observing schools in a high education, high income Boston suburb. There are very few African Americans, Hispanics, and Native Indians going to school in Acton MA.
But let us now return to the observations of Wu Shimin. He said that in America, the purpose of education is “not to fill the bucket but to light the fire.” He meant that while in China, students take mathematics to master the discipline, students take courses in the US to exercise their minds and to stimulate imagination. Wu found that US students are encouraged to have their own opinions. In China, students are asked to copy a painting; in the US, students are shown paintings and then ask to paint their own picture. In math exercises, US students are encouraged to deign their own problems and provide solutions; in China, students are given problems and asked for answers.
“In China, we use tests for the purpose of acceptance or rejection. We look for talent.
American education builds students’ confidence, independence and self-reliance, while the Chinese education pays a great deal of attention to discipline and rigorousness.”
Two concluding thoughts:
- the US education system has two parts – one that stimulates imagination, confidence, etc.; the other is in serious disrepair;
- my bet: most of the “wizards” that caused the financial markets to freeze attended US schools that stimulate imagination and confidence.
Economic Facts of Life about Global Energy by Elliott Morss
Energy: The Frantic Global Search for More/ by Elliott Morss (Morss Global Finance)