Archive for July 10th, 2010

From a First Class to a Second Class Power?

July 10, 2010

From a First Class to a Second Class Power?

Paul Kennedy, in his book, Preparing For The Twenty-First Century, sends us a warning from his vantage point. His book was copy written in 1993.

In my view, his warning resonates with increased authority in the year 2010.

What do you think?

Speaking of an economic slowdown that the U.S. has experienced over the past 60 years, he states the following:

Whatever the explanation for this slowdown, the consequences are serious for the United States with its internal and external obligations. With a high, fairly evenly distributed standard of living, a favorable current-accounts balance, and no foreign commitments, a country like Switzerland, perhaps, or Luxembourg, might suffer a long period of sluggish economic growth and the results, although depressing, might not be serious. But the United States is the world’s foremost military power, with commitments all over the globe; its wealth, while considerable, is unevenly distributed, resulting in immense social problems at home; it has a large current-accounts deficit and needs to borrow from foreigners. Given those circumstances, a prolonged period of slow growth compounds its existing problems, making it unlikely that the United States can continue to fund the same level of military security and attend to its social needs and repay its debts. A country where real weekly incomes have fallen steadily since 1973—as in this case—is ever less inclined to fund even the worthiest needs.

Such a dilemma is intensified if other nations are growing faster, leading to changes in economic relationships. The leading Great Power simply cannot maintain its status indefinitely if its economy is in relative decline. Moreover, because this decline is relative and gradual, it is insidious, not dramatic; as one economic historian has noted, ‘a country whose productivity growth lags 1 percent behind other countries over one century can turn, as England did, from the world’s undisputed industrial leader into a mediocre economy it is today.’ It also turned from a first-class to a second-class power. (pps.194-195)
End of Quote.

Wake-Up America!

V. Thomas Mawhinney Ph.D. 7/10/10


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