… towards, so China and Saudi Arabia might wish, an implosion of American global hegemony

-Cuban Missile Crisis

–Failure to turn Brazil into a commie dictatorship

—Focusing on Nicaragua instead of Mexico (did not learn from their mistakes in Brazil)

I think that the soviets collapsed in spite of Reagan.

—-Afghanistan invasion

The truly wonderful thing about the structure of the market is that you can make lots of money betting on it’s destruction and then flip around and make more as the pump is primed. Woohoo! And Nero only had a fiddle!

Best Wishes, Peter Fox-Penner

Right now, at this particular point in history, we have two distinct evolutionary trends — the American model and the Chinese model — that appear to be converging to a common dimension within a couple of generations: Governments that are accountable to the governed, a process that’s been in train since at least the 11th and 12th centuries, which itself was an historical convergence of massive trends set in motion centuries before in Greece and Rome and Anglo-Saxon England. (Sounds a little like G.F. Hegel, I know … and I do think he was a bit of a nut with all that hero-worship … but he did see the flow of history correctly.)

Keep in mind, both America and China — in their present incarnations — are the products of popular revolutions. This means the people living within the borders or both countries seized control of their destinies, albeit in violent fashion. So, at a very fundamental level, both governments evolved out of a massive re-ordering of the social contract.

Following some horrific displays of murderous disregard for its citizens natural rights, China’s leadership now appears to be doing its best to accommodate a massive internal migration, in which millions of people who live there — seeking a better life for themselves, but mostly for their kids — are moving from rural to urban areas every year. How the successful formula for leading in China went from the cult of Mao, and his total control, to a Communist Party that, to all appearances, wants to retain power by providing basic physical necessities to as many of its citizens as possible, is a mystery. Maybe the overlords realized that, in a massively interconnected world, it was impossible to lie to the masses unless they were willing to shut down all interaction with the rest of the world like N. Korea apparently has done. But that would be too costly, and it would be unsustainable: Generations of Chinese intellectuals who were trained in the West returned home and set themselves to building a future that, at a very deep, almost genetic level, pre-supposed freedom of thought and inquiry as the starting point of any problem-solving effort.

To accommodate the demand of its citizens for basic necessities, the government must build cities and supply jobs. Those jobs must create wealth, so that internal growth can occur. For the past several decades the only outlet for the increasing production of China as these policies became reality has been the US, Canada, and Europe.

In the US, following the end of the Cold War (including the Vietnam War), a massive wave of consumer demand was unleashed, which could not be fully met by US productive capacity alone. Asian supply — Japan, then Korea, then China — all tee’d up to meet this demand, largely owing to a labor-cost advantage, but gradually becoming a technological advantage.

So we’ve been, in a way, co-dependent. But that’s what economic intercourse is — it is mutual dependence on each other: Demand cannot be met without supply, and supply needs a sink or else it’s waste.

What’s striking right now is the visible opening of China’s political and social spaces, which is occurring as the economy expands. And, even tho they’re not exactly America’s Founding Fathers, the Chinese leadership does appear to be directly the government toward being accountable to the governed. Look at how the government responds to natural disasters, e.g.

This is not to say, as Simon notes in this post, that you won’t see destructive rent-seeking behaviour in China, just like we’ve seen here in the US thru countless large and small cycles.

But in both countries it appears the trend is upward — toward more accountable government. Open societies are better able to correct past excess than dictatorships and oligarchies: the collective IQ far exceeds any individual’s or clique’s. China’s behaving as if it realizes this. America has always realized this.

These types of societies have multiple self-corrective mechanisms, which can be subverted as we’ve seen. The hope for the future is those in power don’t want to risk another revolution, where everything has to be restarted at t = 0.

But, then again, as Jefferson said, “Every generation needs a new revolution.”