Sorry, here's a topical aside. There's so much in the news.
Of course it
all relates to the modernist agenda and its enemies.
Saving the World Through Walmart?...
Every year, Warren Buffett (probably the world’s greatest investor personally writes a letter to the shareholders of the company he controls, Berkshire Hathaway. The
following excerpt is from a section that concerns the US trade deficit, in which Buffett explains why he is diversifying into currencies other than the US dollar.
"If the U.S. was running a $.6 trillion current-account surplus, commentators worldwide would violently condemn our policy, viewing it as an extreme form of “mercantilism” – a long discredited economic strategy under which countries fostered exports, discouraged imports, and piled up treasure. I would condemn such a policy as well. But, in effect if not in intent, the rest of the world is practicing mercantilism in respect to the U.S., an act made possible by our vast store of assets and our pristine credit history. Indeed, the world would never let any other country use a credit card denominated in its own currency to the insatiable extent we are employing ours. Presently, most foreign investors are sanguine: they may view us as spending junkies, but they know we are rich junkies as well.
"Our spendthrift behavior won’t, however, be tolerated indefinitely. And though it’s impossible to forecast just when and how the trade problem will be resolved, it’s improbable that the resolution will foster an increase in the value of our currency relative to that of our trading partners. "
While I respect and admire Buffett in many ways, I think that things may be a little more complicated that he portrays them to be.
I have a perspective I'd like to add. It does require "stepping back a bit" and taking in an even wider context, so hold on.
Many periods in history have seen one empire or another achieve enough power to establish and enforce the rules of trade - nearly always to their own advantage. It happened under Pax Romana. Britain did it with the Triangular Trade in 1770s. Ghandi's biggest complaint against the Raj was the way Indian industries were crushed in favor of exports from British mills. As Buffett says, it is called mercantilism.
Only now comes a funny thing that happened in our lifetimes. It is probably the biggest fact about world civilization in the last sixty years, yet I do not know of anyone explicitly or openly discussing it.
After WWII, the United States had an overwhelmingly superior position in the world, with an economy that had benefitted prodigiously from war, rather than suffering from it. By any measure we had become the latest "pax" or imperium, able to set rules and establish patterns that others could only follow.
But something surprising and historically unprecedented happened. For the first time, this kind of power was held by a nation and people whose value system was colored by both satiation and lessons of the Enlightenment. (The two are, of course, related.) Moreover, we were guided at this time - with respect to international matters - by arguably the greatest man of the Twentieth Century, George Marshall, who ensured that the U.S. would use all this power in ways diametrically opposite to any other historical imperium.
Motivated by a strangely pragmatic version of utopianism - called Modernism - we set about the ambitious goal of reshaping the world.
Most people today know Marshall only for his "plan" to rebuild European cities and farms in the immediate aftermath of war. But that was only one small part of a far greater scheme. More significant, in the long run was the establishment of trade policies that reversed mercantilism.
Instead of the Central Kingdom (Chung Kuo) forcing satrapies to buy manufactured goods from the center, the U.S. allowed client states to set up barriers against US manufactures while facing negligible duties to their goods imported to America.
Chief results?
#1 -
a huge U.S. balance of payments deficit. This has been discussed relentlessly ever since the sixties - offering grist and nourishment for pessimists, predicting disaster. Indeed, it is becoming hard even for optimists to imagine happy outcomes for America, with the trade deficit now reaching more than half a trillion dollars a year!
Keen observers such as Warren Buffett predict a major reconfiguring of currencies in the near future, with another dolorous outcome -- the U.S. becoming an extreme debtor nation. And they are probably right. This is mismanagement on a collosal scale.
Okay. That's pretty clear. So far. But there is another side. A completely nother side.
#2 - The 60 year anti-mercantilist trade pattern established by America also resulted in the greatest transfer of real wealth in world history. The effects, first in Europe and Japan, then Taiwan and Korea, then the smaller "Asian Tigers" and parts of Latin America, have been staggering.
Out of the world's six billion people, more than two billion have been lifted into some kind of middle class existence - with modest but clean homes, access to water, power, education and hope - as a direct or indirect result of Americans buying trillions of dollars worth of goods we never needed.
Another billion or so appear to be on the same track, only a little behind.
We are told that the world is a devastatingly sad and oppressive place, filled with poverty and hopelessness. And, indeed, the raw numbers of people who suffer malnourishment and/or oppression, can only tear at the heart. Ideally, this awareness will spread and make us feel determined to do better.
But the irony is that only people who are relatively satiated
can indulge in empathy and feel the pain of others, for whom satiation is but a dream.
In fact, the percentage of human beings who live in some degree of comfort and safety, with secure hope that their increasingly educated children will do better, has been rising spectacularly for two generations. And the principal driver of this change has been the U.S. consumer, purchasing the output of tens of thousands of foreign factories, wherein the same pattern gets repeated from one country to the next. Workers systematically move from exploited peons to hard-pressed semi-skilled assemblers, to unionized skilled labor... while roads and infrastructure get built all around them and their kids go to school, graduating into the bourgeoisie.
Let me reiterate this point. Far outweighing all "aid" the world ever saw, the greatest force for good in the world has consisted of Americans purchasing megatons of crap we never had to buy in the first place, under trade rules designed to favor those thousand of foreign factories.
Alas, we'll never get a scintilla of credit for this vast beneficence. Because it did not blossom out of motivations like guilt or generosity. To a large part, it flowed out of a childishly spendthrift love of shopping.
Indeed, when viewed from this unusual angle, America looks even more impressive than ever. After single-handedly lifting up Europe and Japan, in the wake of WWII, then hauling Korea and Taiwan into the middle class with the helpful voraciousness of our appetites and wallets, we proceeded thereupon to offer this same bounteous good deed to dozens of other nations and peoples until, today, we are accomplishing what no one would have imagined possible.
We are SIMULTANEOUSLY lifting both China and India toward prosperity. Nations amassing more than two billion people. At the same time.
Now this view may infuriate liberals, who believe that doing good should feel like doing good, ideally motivated by sacrifice, guilt... and maybe some paternalism.)
It also won't please conservatives, who would just hate to picture George Marshall saving the world. (They certainly give Ronald Reagan all the credit for calling the final plays in Marshall's long and patient game.)
It seems to be in nobody's interest, left or right, to acknowledge either that the world is being saved, or that it has been accomplished by good-natured American extravagance. Is this why such a blatant fact is so ignored?
Oh, but it is NOT being ignored... in Beijing.
The Chinese leadership is painfully aware how much they have at stake in continuing the American buying spree. If their present transition were to stall short of the halfway point, with most of the rural population poised at an especially dangerous phase - aware of possibilities that have not yet been realized - then social disruption could wrack the nation on a seismic scale. Beijing needs confident Americans to buy plenty more unneeded goods with strong dollars, for the foreseeable future.
Can this be achieved, while our current accounts deficit shatters all records? Yes, if a sufficient counterflow is maintained. The Chinese and others could buy more American goods, for example. (Unlikely.) Or they could pay for intellectual property (even less likely).
Or they'll buy more American capital. The latter will be done even with complete awareness that US investments must depreciate eventually. They don't have any choice. They must buy our bonds and banks and skyscrapers and golf courses, as the Japanese did, at an expected long term loss.
Shall we derive some small satisfaction from that?
I don't see it as an issue of us-them quite as much as some do. Had we played this as a competitive game on that basis, Marshall would have set up a traditional mercantilist trade pattern and we would right now be not only the richest nation but the Great Creditor, owning debt in every other country... and the world would be a raging storm of rebellion against a genuine American Imperium, with billions more suffering in angry poverty than do now.
As I see it, we ARE getting something. We are getting cheap Asian goods and a better world. High quality Japanese cars and a vast majority of Earth's children going to school. A cornucopia at Walmart, and four billion people rushing toward the middle class.
(With concomitant ecological crises that will challenge the NEXT generation. Don't think for a minute that I've forgotten THAT part of things... or the way we are betraying our role as R&D department for efficient and sustainable growth.)
The ironies pile up higher and higher. If America fades somewhat because of all this, will we be taunted because a great empire let itself slip from the pinnacle through spendthrift ways?
Or will we be given credit we deserve? We spent and spent and spent, and in the long run, what we bought was hope for the world.
For follow-up, see:
How Americans Spent Themselves into Ruin, but Saved the World
...next, a return to modernism...
