The Changing of the Global Economic Guard
April 29, 2017 12:07 PM Subscribe
In January 2017 the global economy changed guard. [...] The assembled hedge-fund tycoons, Silicon Valley data executives, management gurus, and government officials were treated to a preview of how rapidly the world is about to change. Xi Jinping, the president of China, had come to the Swiss Alpine resort to defend the global trade system against the attacks of the U.S. president-elect, Donald Trump.
The venue was Davos, the annual gathering of the world’s wealthiest recyclers of conventional wisdom—and consistently one of the last places to anticipate what is going to happen next.
I've been to Davos more than once and this, well this is spot on.
posted by chavenet at 12:33 PM on April 29, 2017 [16 favorites]
I've been to Davos more than once and this, well this is spot on.
posted by chavenet at 12:33 PM on April 29, 2017 [16 favorites]
The neoliberal world order can't cope anymore, that's for sure. It's on its way out, one way or another. I can't help but find it a little alarming, though, that nobody seems to have any clear idea of what comes next. How this whole rickety global structure holds up once climate change really starts to hit, I can't even fathom.
The Chinese can point to their political model of centrally-managed state capitalist technocracy for now, but they're probably twenty or thirty years away at most from the forces shaking Europe and the US now. As the Luce article mentions, manufacturing employment in China is already shrinking, while production keeps increasing. The Chinese technocrats might not need to have elections like we do, but the government nevertheless has come to draw its legitimacy from its ability to make people more prosperous, and it is equally vulnerable to losing that legitimacy when its consumer class have their jobs automated away.
From one perspective, it would seem like the world was never riper for a classical Marxist revolution, and yet the left has never looked further from power. Instead it's the goddamn fascists who look ready to take over.
posted by strangely stunted trees at 1:13 PM on April 29, 2017 [5 favorites]
The Chinese can point to their political model of centrally-managed state capitalist technocracy for now, but they're probably twenty or thirty years away at most from the forces shaking Europe and the US now. As the Luce article mentions, manufacturing employment in China is already shrinking, while production keeps increasing. The Chinese technocrats might not need to have elections like we do, but the government nevertheless has come to draw its legitimacy from its ability to make people more prosperous, and it is equally vulnerable to losing that legitimacy when its consumer class have their jobs automated away.
From one perspective, it would seem like the world was never riper for a classical Marxist revolution, and yet the left has never looked further from power. Instead it's the goddamn fascists who look ready to take over.
posted by strangely stunted trees at 1:13 PM on April 29, 2017 [5 favorites]
I can't help but find it a little alarming, though, that nobody seems to have any clear idea of what comes next.
World war?
posted by Thorzdad at 1:21 PM on April 29, 2017 [2 favorites]
World war?
posted by Thorzdad at 1:21 PM on April 29, 2017 [2 favorites]
> I can't help but find it a little alarming, though, that nobody seems to have any clear idea of what comes next.
The standard formulation is "socialism or barbarism," but, well, it's pretty clear which side's winning right now.
posted by You Can't Tip a Buick at 1:29 PM on April 29, 2017 [2 favorites]
The standard formulation is "socialism or barbarism," but, well, it's pretty clear which side's winning right now.
posted by You Can't Tip a Buick at 1:29 PM on April 29, 2017 [2 favorites]
I can't help but find it a little alarming, though, that nobody seems to have any clear idea of what comes next.
Yeah I can tell you it ain't gonna be luxury communism like it's supposed to be.
posted by Jimbob at 1:34 PM on April 29, 2017 [5 favorites]
Yeah I can tell you it ain't gonna be luxury communism like it's supposed to be.
posted by Jimbob at 1:34 PM on April 29, 2017 [5 favorites]
> Friedman possesses an uncanny knack for catching the spirit of the age with revealing insights.
Hmm.
posted by The Card Cheat at 1:56 PM on April 29, 2017 [7 favorites]
Hmm.
posted by The Card Cheat at 1:56 PM on April 29, 2017 [7 favorites]
There are times that I catch myself thinking, "I'll probably be dead by then." And not in any negative way. Almost with longing. This is one of those times.
posted by Splunge at 2:39 PM on April 29, 2017 [3 favorites]
posted by Splunge at 2:39 PM on April 29, 2017 [3 favorites]
One of the more probable of the economic catastrophes at least a number of which Trump will unleash upon us is to cost the US Dollar its status as the de facto international currency.
Then we'll see how well Wall Street likes him.
posted by jamjam at 2:50 PM on April 29, 2017 [5 favorites]
Then we'll see how well Wall Street likes him.
posted by jamjam at 2:50 PM on April 29, 2017 [5 favorites]
As far back as 1902, when China’s imperial ruins had long since been picked over by the European powers and the United States, the British historian John Hobson anticipated the day when a resurgent China would turn the tables.
That was old hat even in 1902. Go back another century and Napoleon famously observed: "China is a sleeping giant. Let her sleep, for when she wakes she will move the world."
I can't help but find it a little alarming, though, that nobody seems to have any clear idea of what comes next.
Nobody ever does, and those who do are usually wrong. My advice - keep your eye on lamp posts.
One of the more probable of the economic catastrophes at least a number of which Trump will unleash upon us is to cost the US Dollar its status as the de facto international currency.
It will happen, and it may happen on Trump's watch, but it was going to happen anyway, even if it had been Hillary or Bernie or Bush III or Obama redux. (It's one reason I have been baffled that anyone would voluntarily agrees to play musical chairs for that office). No currency lasts forever, and the US has abused theirs big time long before Trump came along.
And then? China will probably take that role. Either them or some kind of bit coin. We've had a then again, China is a bit touch and go - on the one hand, plenty of Economic Big Mo, on the other, plenty of internal unrest that doesn't make it into the news and much of their boom is artificial, make-work projects such as the ghost cities, brand new, no one in them, that enrich Chi-Com-Crony-Capitalists short term, the proceeds of which they are desperate to get out of the country. There's a reason luxury real estate in the west is still going up; hard assets for funny money.
The Chinese government's hopes of rebuilding the Silk Road and by-passing the eventually exhausted US (good farmland, though) is interesting, but will it work, long term? Will Europe be that much a market? Will India want Chinese goods at all, or can the sub-continent go it alone?
Then there's the question of Africa- China likes the raw materials, and is working hard to get a handle on them. On the other hand, the locals (I gather) are not uniformly thrilled with their new dance partners. You can guess why. Regardless, the elephant in that room is demographics. You think the migrant crisis is an issue now, just wait.
As to Classical Marxist Revolution, I damn well hope not. It's been a hundred years since Russia gave it a go. A hundred years on, millions are dead and the countries who tried it Karl's way still haven't recovered. Well, except for the connected- they've made out like bandits.
"I'll probably be dead by then." And not in any negative way. Almost with longing. This is one of those times.
Half in love with easeful death, ey? Me, I have progeny. I'm still pretty annoyed.
posted by IndigoJones at 3:03 PM on April 29, 2017 [9 favorites]
That was old hat even in 1902. Go back another century and Napoleon famously observed: "China is a sleeping giant. Let her sleep, for when she wakes she will move the world."
I can't help but find it a little alarming, though, that nobody seems to have any clear idea of what comes next.
Nobody ever does, and those who do are usually wrong. My advice - keep your eye on lamp posts.
One of the more probable of the economic catastrophes at least a number of which Trump will unleash upon us is to cost the US Dollar its status as the de facto international currency.
It will happen, and it may happen on Trump's watch, but it was going to happen anyway, even if it had been Hillary or Bernie or Bush III or Obama redux. (It's one reason I have been baffled that anyone would voluntarily agrees to play musical chairs for that office). No currency lasts forever, and the US has abused theirs big time long before Trump came along.
And then? China will probably take that role. Either them or some kind of bit coin. We've had a then again, China is a bit touch and go - on the one hand, plenty of Economic Big Mo, on the other, plenty of internal unrest that doesn't make it into the news and much of their boom is artificial, make-work projects such as the ghost cities, brand new, no one in them, that enrich Chi-Com-Crony-Capitalists short term, the proceeds of which they are desperate to get out of the country. There's a reason luxury real estate in the west is still going up; hard assets for funny money.
The Chinese government's hopes of rebuilding the Silk Road and by-passing the eventually exhausted US (good farmland, though) is interesting, but will it work, long term? Will Europe be that much a market? Will India want Chinese goods at all, or can the sub-continent go it alone?
Then there's the question of Africa- China likes the raw materials, and is working hard to get a handle on them. On the other hand, the locals (I gather) are not uniformly thrilled with their new dance partners. You can guess why. Regardless, the elephant in that room is demographics. You think the migrant crisis is an issue now, just wait.
As to Classical Marxist Revolution, I damn well hope not. It's been a hundred years since Russia gave it a go. A hundred years on, millions are dead and the countries who tried it Karl's way still haven't recovered. Well, except for the connected- they've made out like bandits.
"I'll probably be dead by then." And not in any negative way. Almost with longing. This is one of those times.
Half in love with easeful death, ey? Me, I have progeny. I'm still pretty annoyed.
posted by IndigoJones at 3:03 PM on April 29, 2017 [9 favorites]
The problem is--as mentioned in the article--there needs to be new thought and new leadership. However, there can't be said new thought and new leadership because many of the people in the article would burn you alive for heresy if you said there had to be something after the neoliberal ubercapitalist world order. Even the "socialism" debate in the US comes down to unchecked capitalism versus "capitalism but with the government taking some money to finance basic services for all." These same millionaires and billionaires would finance your utter destruction if you talked about anything that was actually radical.
I mean economics is only just getting around to starting to realize that there may possibly be something off about using a model where all consumers are perfectly rational and make the best decisions at all times.
posted by Ghostride The Whip at 4:08 PM on April 29, 2017 [4 favorites]
I mean economics is only just getting around to starting to realize that there may possibly be something off about using a model where all consumers are perfectly rational and make the best decisions at all times.
posted by Ghostride The Whip at 4:08 PM on April 29, 2017 [4 favorites]
oh goodie I was worried I had somehow failed to underestimate the ways we were fucked and hurrah i was right!
posted by corb at 4:46 PM on April 29, 2017 [2 favorites]
posted by corb at 4:46 PM on April 29, 2017 [2 favorites]
> Then there's the question of Africa- China likes the raw materials, and is working hard to get a handle on them.
IndigoJones: The recent China Africa Podcast discussed how the trade between China and Africa is down, a lot. Here is the post they discussed.
posted by gen at 6:03 PM on April 29, 2017
IndigoJones: The recent China Africa Podcast discussed how the trade between China and Africa is down, a lot. Here is the post they discussed.
posted by gen at 6:03 PM on April 29, 2017
On the topic of podcasts, there was a Sinica podcast in March where one of the panelists came to the conclusion China's message at Davos wasn't an attempt to become the leader of globalization, but more as a message to the United States not to retreat from it's responsibilities, because the Chinese leadership understands that it does better with an engaged partner rather than an isolated one.
but they're probably twenty or thirty years away at most from the forces shaking Europe and the US now.
Oh, the Chinese are definitely not strangers to those forces.
posted by FJT at 8:16 PM on April 29, 2017
but they're probably twenty or thirty years away at most from the forces shaking Europe and the US now.
Oh, the Chinese are definitely not strangers to those forces.
posted by FJT at 8:16 PM on April 29, 2017
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2. Fuck hedge fund tycoons.
3. Double-fuck Trump for trying to wreck the economy. I wouldn't be surprised if he and his cronies have a ton of shorts on various things that'l pay out _yuge_ if he succeeds in crashing everything.
posted by SansPoint at 12:13 PM on April 29, 2017 [9 favorites]