The Rise of China and dealing with American grief.

Like the world today, Europe in the 19th century witnessed major shifts in the balance of power, with new technologies changing how life was lived. Otto von Bismarck, a Prussian, saw opportunities in that chaos. He unified the warring German principalities in 1870 via an unexpected war on France. He modernised Germany so that it was the industrial powerhouse of Europe at the start of the 20th century.

He achieved his aims by lying, cajoling, threatening, invading, persuading, networking, and analysing. He modestly said of his own achievements:

“The statesman’s task is to hear God’s footsteps marching through history, and to try and catch on to His coattails as He marches past.”

How would someone like Bismarck have viewed God’s major strides in our time, the rise of China?

The rise of China will inevitably lead to the emergence of two competing power blocks in world politics. On the one hand there will be China and its allies, on the other the West and its allies. Some countries will initially try to stay neutral or play the two major blocks off each other, but the smaller ones will be easy prey for the two power blocks to force into a choice, so they either unite in a third alliance or pick a side.

The rise of China raises obvious questions about alliances and less obvious ones about emotions.

The alliance questions are obvious: India would naturally fall in the camp of the West, so how would we prevent it slipping away? Korea and Russia could go either way, so what would sway them and what role could they be offered in the West? Should we try to delay countries who naturally belong into the China block, like Vietnam, from switching? Would three blocks be more stable than two? Can we keep the conflict relatively cordial or is some kind of low-level proxy-war inevitable? This is the obvious power-play stuff and the relevant scenarios will occupy thousands of analysts in both the West and China right this moment.

Bismarck excelled in power-play but thought deeper and considered the dynamics of group emotions.  The one I think we should watch out for is the grief that the Americans have to go through in order to come to terms with their smaller role. The West has not considered this issue yet, but I think it will dictate much of geopolitical life this century.

Consider the many ways in which the Americans will feel pain. Their military bases will be closed in the countries that switch to China, and their culture will be humiliated. Their cherished truths, pushed by their media, will no longer be the truths that others buy into as their grandeur fades. Their banks will be challenged such that the world financial system will not be dominated by them. Their internet companies will be taxed by allies and their technological inventions copied shamelessly without payment. Their corporate and political leaders will feel their power and influence reduce.

Americans as individuals will notice this when they travel abroad and taken less seriously. Their culture will be less admired and copied, which will mean the rest of the world will feel stranger to them, less welcoming. American tourists will have to watch their step more, and the brain drain to the US will reduce as American education will be downgraded in status.

The Americans are a very proud people, who have enjoyed a 100 years of being at the top of the world political tree, and 200 years of bossing around other countries in their own backyard. That is a long period of dominance to lose. They will feel intense pain and, after that, intense anger.

Britain and France have shown us that grief over a lost position of pre-eminence can last longer than 100 years and can motivate elites to do really stupid things.

France was pre-eminent around 1800 and since then has been in continuous relative decline. Its wounded pride motivated it to seed the second world war by inflicting the humiliating treaty of Versailles on the Germans, one of the worst political mistakes ever made. The grief of the French enabled the rise of Hitler and cost the world 60 million lives.

Britain resented its loss of influence enough to bottle up Germany in the early 20th century, a major factor in the outbreak of WWI. Its reluctance to accept historical shifts gave us unnecessary disasters like the Suez crisis. Even now, a century after it lost its pre-eminence, many Brits delude themselves that Britain will regain some of its former stature if it breaks with the European Union.

So if we owe devastating wars and disruptions to the British and French elites pining for lost glory, what can we expect the grief of the Americans to cost?

We face a century of American grieving over its lost position. We have only just entered the denial stage. What is yet to come is pain, followed by anger. Only after that anger can there be acceptance and bargaining.

What can we do to minimise the cost of American grief?

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25 Responses to The Rise of China and dealing with American grief.

  1. John Burnheim says:

    The old regime from the beginning of civilisation depended on military power, because getting more wealth depended ono obbing some other country. The opening up of industrial production and world trade produced a new possibility. It became cheaper to buy whatever a country needed on the world market than to engage oink the destructive and costly game of military power.

    China realises this and has been spectaculaarly successful at the new game, at the expense of American dominance. The rest of the world needs to encourage China and India in their constructive paths and resist America;s attempts to impose the old game on us all, as in “Make America Greatagain” . In fact America is not doing too badly. It needs to learn that most of the troubles of the world have been triggered by its hamfisted interference in other countries. It could find a new role for itself in referring to the constructive politics of the leadership in a peaceful international order.

  2. conrad says:

    “That is a long period of dominance to lose.”. 200 years is historically pretty tiny, and they have only really been globally dominant since WWII. There are lots of nations/cultures that have managed to pass the point of worrying about historical greatness, so there will no doubt be some pain, but things move on.

    I also think that things are sorting themselves out already — basically, the idea that America withdraws from many of its world roles and focuses on America (as China did for a large chunk of its history). Given recent shifts in energy generation in the US, this will make that route much easier.

    I also suspect that public opinion for things like Americans not having expensive military bases all over the world is probably quite a vote winner, and the main problem will be getting around the gargantuan military industry and not the desire of the public to leave this space. Trump already seems like a very confused politician moving in this direction, but if someone smarter turns up, I think many Americans would be grateful.

  3. R. N. England says:

    I don’t identify with the “we” in this article. I am a scientist. A major part of my culture is science and engineering, though I love the arts of 18th century Europe. For decades now, Chinese leaders have been engineers, and Western leaders have belonged to Snow’s other culture that is dying, mired in contradictions and endless squabbles that it refuses to resolve. I favour leadership by people that know how things and people work; who abjure expensive personal taste and are therefore less easily corrupted. I favour public magnificence and enterprise, and private frugality. I see more of my culture in socialism with Chinese characteristics than I do in the West. I am glad it is working well for them, and despair of the West.

    • Nicholas Gruen says:

      Thanks R. N. An interesting and in some ways compelling perspective. But cultures morph in different ways. It will be interesting to see how things turn out – in the good sense and in the ‘may you live in interesting times’ sense.

    • paul frijters says:

      The fancies of engineers!

      How good do you think life in China truly is? Guess why the human flow from China is large and the human flow to China is minute? And do you really think you’d turn traitor to the West if it came to a conflict? And do you really think Chinese politics has less squabbles and corruption?

      The main failing I have found in many engineers is that they have almost no understanding of who they really are. That makes them very dangerous as politicians.

      • Moz of Yarramulla says:

        Guess why the human flow from China is large and the human flow to China is minute?

        No need to guess, the information is readily available, direct from China. Note that Naturalization … is rare other than through marriage or a great contribution to the country. I suspect they prefer cash for the latter :)

        Likewise, their border control is vigorous and their internal ethnic homogeneity and tight control over their citizens makes life difficult for non-legal arrivals.

    • conrad says:

      I agree with Paul — I don’t see anything great about the Chinese government.
      I also think people attribute too much to governments, and that the effect of governments is asymmetrical. In particular, terrible governments can wreck your country, but good governments won’t necessarily make it good.

      Given this I think:
      (1) The reason China is getting somewhere is because of 2000 years of Chinese culture, not the government. So comparing to a baseline of 60 million dead people doesn’t mean the current government is good — China could get somewhere with a very broad range of governance structures.

      (2) Given China has 1.3 billion people, it is unsurprising they are getting somewhere and lots of infrastructure is getting built.

      (3) The advantages people see, like being able to get stuff done quickly, which in part is because of the dictatorship, are disadvantages in other respects, like when your president gets to rule for life or, as an individual, when you have no rights.

  4. R. N. England says:

    The most interesting thing about China is the fact that the Communist Party has maintained its power while it has encouraged those Confucius called “the common people” to pursue self-enrichment. Confucius, the educator par excellence of future mandarins, taught them personal frugality and benevolence to the common people. One gets the impression from the Analects that Confucius would have regarded the wheeling and dealing that enriches some and impoverishes others as typical peasant activity, beneath the dignity of a gentleman, but to be treated benignly by the administrator (gentleman), whose duty was to be just to rich and poor alike. Keeping administrators from being corrupted by rich “peasants” is the perennial battle. It seems to have been touch-and-go over the last few years, generating the recent internal crack-down by Xi Jinping. The personality cult now surrounding him seems to be connected with that power struggle. Whether it is harmful or useful to the country depends on how good he is.

    The Marx and Confucius personality cults are probably both helping to maintain a “separation of powers” between the government and the rich.

    • paul frijters says:

      “helping to maintain a “separation of powers” between the government and the rich.”

      The Communist party has around 70 million members. Anybody who is anyone is in it. You dont remain rich in China if you’re not in it, so there is no separation. The Party is the collection of anyone who matters.

      The anti-corruption units are best understood in the same way as Stalin’s secret police: a means of eliminating the internal competition using whatever excuse the population will swallow. Worked like a charm. They allowed Xi to violate the laws and previous rules of his Party and assume full control, just like Stalin.

      You are so clear-eyed when it comes to the corruption in Australia, RN England. Yet, you allow yourself rose-tinted glasses when it comes to a supposed engineers’ paradise. Humans have an opportunistic and megalomaniac side. Yours leads you to fantasise about the purity of engineers and how they should run the world.

      • R. N. England says:

        Thank you for drawing attention to my serious category mistake. That was to assume that “the rich” are concerned solely with growing their own personal wealth. A significant proportion of rich people are public spirited as well, and there can be a convergence of interests between theirs and that of the public. Bill Gates has finished with the hard work of growing his personal fortune, though most of that probably grew fortuitously from the kick he got out of writing useful code. He now devotes his time to the public interest. That has been a tradition for wealthy people in Christian America, as they get closer to the pearly gates and remember the eye of the needle. Moral traditions can outlast religious belief. It might be worth recalling that the behaviour of joint-stock companies is not shaped in that way.

        Membership of the Communist Party of China may incline the rich towards greater consideration of the public interest, and that may or may not outweigh their tendency to corrupt it. What is beyond doubt is that, for what ever reason, the public interest is now being served in quite a big way in China (and as a result of its government’s trade policies, in the wider world). There is also no doubt that it is languishing in the United States, making comparisons interesting. You may even dispute that fact about China, but you are a product of your culture as I am of mine, and small-time cultures encourage their members to slag off at their rivals.

        • conrad says:

          The effect of philanthropy in most economies is tiny. For example, the US has one of the highest philanthropy rates in the world, but this doesn’t stop it also having one of the world’s highest GINI ratios, poor healthcare coverage etc. . The reason is obvious. In the US people gave $390 billion in 2016, but GDP was about 19T, with the healthcare sector accounting for 3.3T alone. So even high giving rates are tiny compared things that people need like healthcare.

          In terms of China, I agree with the “for whatever reason”. However, I think the biggest reason is that people are serving the public in the way they do in most countries, and the government has done a fair job playing second fiddle. If you don’t understand this, a good example is Hong Kong. Hong Kong is a wonderously rich and great place. It got that way with very limited government, and I’ve never heard the government even claiming that it was the main factor for HK’s current status. Thus the idea that the CCP is responsible for China’s current growth is largely biased because people in countries like Aus like to incorrectly attribute too many successes and failures to the government.

        • Nicholas Gruen says:

          Yes, I wouldn’t be putting too much faith in philanthropy.

          • R. N. England says:

            I got a bit carried away with philanthropy in the narrow sense, though I didn’t use the word and I meant it in a much broader sense. Benevolence is a word that crops up many times in my translation of Confucius’ analects. In China, the effect of Confucian ethics on the behaviour of officials in their daily duty is likely to promote better relations between the government and the people than purer Marxism, and to increase economic activity.

            In scientific terms, the level of economic behaviour (behaviour for the good of others for whatever reason) is under the control of non-monetary as well as monetary contingencies of reinforcement (contingencies that increase the frequency of the behaviour). Pure science is an example of behaviour which has been, and will continue to be, of supreme economic importance. Yet it is not a product of monetary reinforcers. That’s why it is called “pure”, terminology that presumably originated in the days of the benevolent gentleman scientist. Most important branches of science originated entirely under the effect of non-monetary reinforcers. Thermodynamics, born from consideration of the efficiency of steam engines, is the only real exception. Even today, a scientist is more concerned to work in a well equipped laboratory than to take home a fat salary.

            Because the social system is an unstable one with positive feedback, non-monetary as well as monetary reinforcers can act as pump primers to increase the level of economic activity.

            Negative reinforcers of economic activity also need to be more thoroughly investigated. For example, pooh-poohing by economists of non-monetary reinforcers depresses behaviour for the good of others. Examples of its effects are the closure of scientific laboratories and underfunding of science teaching institutions.

            Economics cannot presume to give us a complete picture of economic behaviour without taking non-monetary reinforcers into account. They too can be identified and classified and their frequency measured, by the methods of behaviour analysis. Some monetary equivalent may need to be estimated to quantify behaviour maintained by non-monetary reinforcers so it can be integrated with the other type. The ultimate aim is to maximise and sustain “behaviour for the good of others for whatever reason”. Considering only monetary reinforcers means we fall short, perhaps well short of the target.

            • conrad says:

              I think that’s what Daniel Kahneman and Richard Thaler got their Nobel prizes for — and of course endless work in psychology looks at non-monetary factors and their influence on behavior.

              Also, the problem of just saying “behavior for the greater good” is there isn’t just one function to maximize, and most of the time, we don’t know what the greater good is anyway. Is it happiness, space exploration, consumer goods, sitting in the sunshine, having a clean environment, some combination of these etc. ? Beats me. That’s what philosophy is for.

              Even within limited domains, it is also easy to find multilevel problems where something good at one level is not good at others. For example, even on my silly list above, space exploration trades off with a clean environment. So the best I could do is give them some arbitrary weight in some arbitrary function.

              Obviously there are more serious problems. For example, China’s growth gave lots of peasants jobs but also caused lots of environmental destruction. Which is the greater good? It depends who you are, and how you want to arbitrarily weight things.

              So of course economics falls short of solving your impossible question, but it probably does a not too bad job of finding a tractable second-best solution.

              • R. N. England says:

                As far as I can see, behavioral economics is only about ways in which people play the money game ineffectively, messing up some of the theory of why obsessive playing gives us the best of all possible worlds. It never considers the fact that it’s only a game, and that it’s unfortunate that people who don’t play it and want to go on living get punished. Possibly worse, people who get no kick out of playing because they are preoccupied with finding out things or devising mechanisms that could be of great help to their fellow human beings are underused by big players. Game-obsessives usually have a poor understanding of the possibilities science gives us of shaping a better world (and profiting from it). It is also difficult to keep the profit of such investment to themselves. Scientific investigators themselves often don’t think about the future utility of their discoveries. They don’t actually need to, such is the ultimately useful nature of investigating, for its own sake, how the world works. This activity is unfortunately suppressed, and would-be investigators are forced to play a game for which they have little enthusiasm.

                The game has other disadvantages. The tendency for it to be played enthusiastically varies cyclically. Too much of it can be played for promises which can fall like dominoes and put people off playing. This exposes large numbers of people to the threat of punishment, because they need to go on living but have run out of chips. The alternative, of putting much this speculative money into planning by engineers may explain why China is doing better than the West. Engineers are a step ahead of economics-trained capitalists because they specialise in putting scientific discovery to practical use. Engineering itself is a benevolent vocation, concerned fundamentally with using science to make the most useful product you can for the money. Engineers make mistakes that tend to turn up in the long term, but they are probably more useful than economists.

                The paradox of economics is that it presents itself as a benevolent vocation, but pooh-poohs benevolence as a major factor in the shaping of a better world. It has probably got that way by telling big players what they want to hear– different but similar, to Adam Smith telling the landed gentry what they wanted to hear about the motives of those who were displacing them.

                Where civilisation advances, economists will probably be replaced by, or morph into, behavioural engineers who specialise in the very difficult job of shaping and maintaining benevolent behaviour in the population. The money game will still be part of this, but it will be more carefully managed. I see that as more likely to happen in China than the West. That’s why I think China has a better chance of carrying the torch of civilisation into the future than the West.

                • conrad says:

                  “Where civilisation advances, economists will probably be replaced by, or morph into, behavioural engineers who specialise in the very difficult job of shaping and maintaining benevolent behaviour in the population. ”

                  I think exactly the opposite here. Once people get too good at manipulating other people’s behavior, you end up with massively hierarchical systems with too much top-down influence.

                  This then leads to corruption because those on the lower layer get no voice, and when none of the lower layer gets a voice, the top layer can do anything they want, and many end up doing so.

                  This is why science is so corrupt in China — because no-one can speak out because society is engineered to be too hierarchical and you get punished even more than in places like Australia for doing so.

                  For example, here is how bad the state of science is in China a he moment:
                  https://www.sciencealert.com/80-of-the-data-in-chinese-clinical-trial-is-fabricated

                  This isn’t because there arn’t lots of smart people — there are. It’s the system killing everything.

                  The alternative is to assume most people are benevolent to start with, in which case there is no need to engineer this behavior — you simply need controls and rewards for the minority which arn’t. We of course already have those things (Laws and social security)

                  • Nicholas Gruen says:

                    Fantastic point Conrad,

                    Which lines up with the points Alan pointed us to on another thread arguing that what you’ve just suggested is precisely Machiavelli’s view. That the real risk in politics arises from the grandi, not the populus. The grandi are insatiable, whereas the people just want to get the parasites off their back and get on with leading lives of modest decency.

                  • R. N. England says:

                    No people are naturally benevolent (explained in Dawkins’ Selfish Gene). It is the cultures that are able to work with this unpromising clay, and induce people look after each other on a macro scale that thrive. It’s not easy. The bleak answer is that if you are not induced by your culture to behave benevolently to its other members, then so much the worse for your culture and its chances of survival.

  5. Ellen says:

    China is able to splash money around, but that is a poor basis for a relationship. Emotion or sentiment is where the US can hold ground, and even gain.

    China defines itself ethnically. If you’re not Han, then you are not part of their project, even if you have been born inside China’s borders It doesn’t have a creed, or a set of values that it can readily universalise. It could even be said that its ethnic homeland animus, its testing of a larger territorial domain, increasing oppression of non-Han citizens, and its (so far) quiet suggestions of domain over all of Chinese descent in the region seem to have the vibe of Europe a century ago.

    The US, still, defines itself via a set of values that it can offer to all others. The sentiments that gave rise to Trump imperil that spirit. At the worst, they will split the US, but I suspect that the US is too diverse for that to happen, provided that the Republican Party is defeated by a Democratic (or other – who can predict these things) leadership that is committed to that end.

    Money has limits. It can’t buy friendship, all it can do is lease a facsimile. To go beyond that requires either force, or common ground. It’s hard to imagine those Confucian values, or at least the CCP’s version of them, catching on quite as readily as those of the US and friends, but I could be wrong.

    • paul frijters says:

      yes, I agree that China will have difficulty finding allies because no-one else can think of themselves as Chinese. I said the same 6 years ago (http://clubtroppo.com.au/2012/09/06/the-rise-of-china-part-i-the-new-realpolitik/). Their nationalism is indeed of the pre-WWII variety.

      Yet, they can push the boundaries of their ethnicity and dont under-estimate their competence. They move ponderously but are very smart.

      They have a huge diaspora in many countries that will be caught in the middle and gives everyone a reason to take it easy.

      American grief will ensure that the Chinese will be provoked though. I see no way to avoid this. The Americans will treat them as enemies, because that is what the schoolyard bully does when a competitor shows up. American pride and its military establishment will dictate it. Against the Chinese though, the Americans cannot compete on their own. They will find themselves out-gunned in every way.

      What will the Chinese do once they start to notice they are much stronger than the Americans? The hope would have to be that they secure their interests and otherwise stick to their own affairs. But I dont see that happen. The Americans will be relentless. Chinese pride will insist they show their power and compete.

      How to contain American grief will be a major issue for the non-American Western allies. It is already one of the major questions today. So far, we Europeans are letting the Americans rage a bit, whilst maintaining low defense spending. In fact, we’re secretly grateful for Trump whose antics have limited the capacity of the State Department to plan any mischief. His personal affinity with dictators is also quite useful in reducing tensions. Who’d have thought? But it cant last. The American military elite is relentless and wont be denied its next focal point. Just look at how they are steering debates in Australia!

  6. Nicholas Gruen says:

    I complemented Conrad on his comment before I’d read R.N.’s most recent.

    My sympathies on the ultimate point are not with the engineers, and in that sense I seem to be on Conrad’s and Paul’s side. In that sense R.N., if you ‘ve not read them, you might find Hayek’s comments on the limitations of the engineers’ perspective of some interest.

    But I loved the points both of you made – even if they were styled as a disagreement. There’s an awful lot of agreement there I think about what’s wrong, particularly the dysfunctionality of top-down management.

  7. R. N. England says:

    I’ve read enough about Hayek to conclude that the USA follows his system of economics more closely than other countries. When I examine the results of the US experiment, I see a flowering of behaviour for the short-term good of others, followed by culturally adverse events. Amongst the latter are damage to the environment and some aspects of human health (in particular, the effect of recreational drug-taking, an excellent example of a short-term positive reinforcer and money-spinner with long-term adverse effects). I also see a plague of lies, misery, and growing internally and externally directed malevolence, producing war after war, and which now threatens unimaginable destruction and death on a global scale. This evidence indicates that the doctrine afflicting Hayek and others is possibly the most disastrous cultural pestilence in human history.

    The money-property game is a part of our culture that recognises and employs the hard-wired selfishness of the individual who fences off resources from the rest of humanity. The game is a surprisingly effective way of turning selfishness into short-term public good (one reason is that it kicks out incompetent players and reinforces good play). It is so popular that banning it by punishing players has its own negative mutiplier effect on public good, and causes mass-defection from the social system. The evil comes from the fact that playing is an addiction that drives out other behaviour– other aspects of a big, diverse culture that are also generating behaviour which turns out to be for the good of others. In Marx’ terms, it drowns those other reinforcers in the icy waters of egotistical calculation. The game can gain or lose popularity for various reasons. One reason for decline is the satiation of players that have plenty of assets that are demanding to manage, and who begin to play in a more relaxed fashion, directing them into low-risk, more liquid forms. The game also generates large numbers of people who are unable to play because they need all their chips and more for the necessities of life. (It is worth recalling that it was in the master’s interest for his serfs to be strong and healthy, and his failure to do so was often caused by economic cycles). Every now and then, vast networks of promises, most of them made sincerely, are unable to be kept and lose all their trading value at once. When the game falters, malevolence that grew from the bitterness generated by competition (the game relentlessly plays people off against each other) is reinforced. Hungry people get punished for breaking the rules. Losers irrationally blame and kill each other, or others across the sea or the border, even classrooms full of schoolchildren. Tragically, non-monetary reinforcers of benevolence have been slowly abandoned over the long term because of addiction to the game. Hayekian economics is a fundamentalism that helps rid cultures of the non-monetary reinforcers of economic behaviour. These once acted as multipliers essential to restore the game to health. Those now-extinct reinforcers were needed to help stop the game from ending in a melée of upturned tables, chairs smashed over people’s heads, guns blazing, players and bar workers weltering in their own blood. Instead of playing a competitive game by rules, losers throw the rules aside and the game erupts into the real biological competition that was always simmering beneath its surface.

    Punishing players is like punishing addictions in general. It doesn’t work. The culture needs to be enriched by other contingencies of reinforcement that increase and sustain the rate of behaviour for the good of others, and rescue the game’s losers from depression, bitterness, and troublemaking. It is counterproductive to accuse Hayekian economists of being in any way personally responsible for the mess. They are the victims and carriers of a cultural disease that scientific behaviour analysis can cure.

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