FORWARD BASE B

"Pay my troops no mind; they're just on a fact-finding mission."

How Does the US Empire End?

The world has largely been at peace for almost 80 years now under American hegemony. It’s pretty impressive, really. Constant war and high levels of local violence have been the rule for most of human history. The world is a far more tame and centralized place than it used to be…for now. No one lifts a finger without an ID number that’s far more important than their mere given name. So what after all, is so bad about our entrenched ruling classes?

There were also about 100 years between the Conference of Vienna and World War 1. It would seem that when conflicts have been held in stasis for awhile and the balance of power becomes ever more like a precarious house of cards, it can all come tumbling down at once.
As with forest fires, even managed forests have to have controlled burns to prevent a much worse conflagration later in a forest packed full of trees weakened by tight competition.

But how does the seemingly impregnable national order actually end? It took two world wars to finally end the British Empire and unseat the pound as the world reserve currency.
America has an enviable geopolitical position with domination of an entire continent, separated from any competitors by thousands of miles of ocean.
It has a stranglehold on the world economy. They say when a debtor gets too big, the creditors are at their mercy. Too big to fail, as they say. If the US were to fold we would see another worldwide depression.
Hence it’s in everyone’s interests to make sure that doesn’t happen. So long as US consumers are indispensable to the world economy, the whole world of servants will rush to keep the consumers aloft on their luxurious palanquin and comport them along their way, above the sweaty press of the common crowds.

However, Golden Age Spaniards also thought they could purchase more than they could produce forever and that never works. Even if you have access to bottomless bullion from a whole New World, it’s just stand-in token for real wealth. Sooner or later, reality catches up. If, like a Spanish Habsburg King, you’re buying all your tapestries from Flanders, your parade armor from Milan, your glasswork from Venice, sooner or later the bill comes due and all the people you poured your money on for a hundred years are now the powerful people.

At present, though, the thought of a Chinese unilateral superpower remains laughable when we consider they’d be thrust back into bare subsistence farming with human shit for fertilizer if it were not for the juggernaut of 1st world demand. Constant hysteria aside, China cannot be even a truly sovereign power until they are no longer utterly dependent on other powers for their wellbeing.

I am a fan of the Mark Yuray hypothesis that besides a US led “international community” there are only really two sovereign powers, China and Russia. While the two “sovereign powers” may have formidable home rule, though, they are still completely dependent on the international system.
If we were to reformulate a bit, we might say there are:
-Powers under the direct political hegemony of the US Neo-Liberal Establishment
-Powers (like China and Russia) that manage their internal affairs but still answer to the world-wide economy.

China is stuck making manufactured goods for Wal-Mart, or else there would probably be a second Taiping rebellion composed of the starving unemployed.
Russia can’t really deny shipments of natural gas to Europe or even the oligarchs would be facing hard times. The whole economy of Russia is only worth a bit more than that of Italy with nearly 3 times the population. Accounting for Purchasing Power Parity means the numbers aren’t quite as ridiculous—everything 1st world is ridiculously expensive. It doesn’t change the fact Russia isn’t really 1st world and never really has been. They have tons of weapons, but so what until you actually use them?

Manufacturing and commodities comprise the backbone of economic activity, yet in the post-modern era the real proceeds go to value-added goods and rent-seeking. An I-phone beats the crap out of the world’s best potassium anyday when it comes to securing money and power. Every step of the process, outsourced all over the world, accrues a bit more profit than the last and presents that much more of a barrier to entry against any competitors. As for rents, why actually make stuff when you can just charge someone to use your same old property every month?

So, we have a world economy where finance, interest, rent, value-added products are the predators and commodities and manufacturing are prey.
Of course, the weakness of predator nations is they increasingly lack a backbone to support all their stored-up fat after decades of feasting.
As with the Spanish after their golden century, all the money gets sent to the actual producers of tangible goods and all the manipulations of finance and rent might as well be a sleight of hand with Chuck-E-Cheese tokens.

But for now, banana republics like Russia that churn out boring commodities are suckers. How do we transition into the long run?

On casual observation, the US Empire has two main mechanisms that keep it in power:
-Economic interdependence. No one can afford to opt out.
-Military dominance. If persuasion fails no one can opt out, even if they want to.

On one side of the world, the oil exporters of the Middle East are obligated to do business in dollars by both the overwhelming convenience of the network effect (the same one that keeps people using Windows) and and if the offering of bread fails, then the stick.  “Pan o palo,” as Porfirio Diaz liked to put it.

On the other side of the world along the Pacific Rim, the price of mass exporting to the US is you have to use much of the proceeds to finance US debt.  It also pays to buy tons of US currency to be able to manipulate the dollar.

The net effect is that these East Asian powers are at once tributary vassal states and shareholders in the US Empire.  This is what makes the prevailing order so stable.  The USA and East Asia are joined at the hip.  China and Japan can engage in considerable internal manipulations in the US.  In return, their interests are intricately tied to the fortunes of the US, holding them hostage to its capricious whims and holding them responsible to keep their great benefactor propped up no matter what.

Those who like to obsess about the national debt fail to understand that the US, as the center of the Empire, operates by different rules.  If the US incurs trillions in debt, so what?  They simply auction it off as bonds and there must be enough takers willing to buy them up or the whole game is up and nobody wants another worldwide depression.
In reality even the national debt is just another system of extracting tribute from lesser nations and from the hapless peasantry who happen to live within the bounds of the Central Imperial Zone aka. USA.

But all Empires so far have fallen, so how does the US Empire, perhaps the most powerful in history, deteriorate?

To begin with, it has already begun.  The idiotic foreign policy of the decadent mandarin classes within the Washington beltway has already driven Russia and China into alignment.  Only their high-flung lunacy and idiocy could have managed to forge these two most natural rivals together!

This new Eurasian alliance with China and Russia at its center has begun the process of negotiating trade agreements outside of the sacred US dollar.  One by one, numerous satellites of the Empire are signalling they are dropping out and it happens with barely a headline.  Last month I think it was Cambodia.  A couple weeks ago, Pakistan after decades of enormous bribes to their leaders while getting little in return.  Much more well-broadcast, the Philippines, once literally an Amerian colony failed to kowtow to the American President.
What is most telling is how these entities can drop out now without any “color revolutions” fomented by US intelligence or wars of “freedom” fomented against them on phony pretexts.  The fear of reprisal, unless truly weak and without strong nearby allies just isn’t what it used to be.

But this steady decline isn’t enough and meaningful change is fairly rarely gradual anyway.  Even if the erosion has progressed steadily there is still a catalyst and a cataclysm that brings about a new order, always more abruptly than the bean counters expect.  In history, the water level reaches a certain key height and then there’s a flood that tends to take us by surprise.  What is that in the case of the US Empire?

A couple obvious answers right now:

-The US gets involved in more Middle East quagmires as the military budget perpetually bloats in size.  As the Empire gets more desperate to keep its “clients” in order, it starts to take off the velvet gloves.  We now see a Sunni-Israeli alliance against a Shi’ite-Russian bloc with Turkey and Egypt acting as opportunists.  The US foreign policy establishment has committed more and more to the Saudis and Israelis, a stance that could suck them into a general conflict that will finally siphon off too much of their resources, like the Soviets in Afghanistan.  Worse for the US, the Persians are throughout history a higher IQ, more civilized, and competent people than the Arabs who beyond the inception of Islam and the Rashidun Caliphate were hardly ever a major power.  Pumping money and weapons into Saudi Arabia through years of protracted conflict will be as much a black hole of wealth as social programs in inner St. Louis or Detroit.  For now, the Arabs put oil profits into useless fighter planes as the Chinese put their export profits into US bonds and dollars.  The smug US establishment will gape in astonishment as the financially bulky Saudis start to tire after just a few rounds and then they have to pay them to take more weapons, desperately trying to keep them in the fight.  As guys like Hitler can attest, crappy allies are just a liability.

-The US debt at some point simply becomes big enough to fail and the rest of the world has built just enough of its own infrastructure that they are willing to let it drop.  Already, city and state governments are failing in the US even as the federal edifice continues to vacuum up the world’s wealth.  The main takeaway though is the circle of people and organizations who benefit from the Empire’s streams of tribute grows ever smaller.  Once it grows small enough, there simply won’t be enough people with power and money who are invested in the Empire’s continuation.

3 responses to “How Does the US Empire End?

  1. August Hurtel February 15, 2018 at 3:01 pm

    I had a thought last night, which I think was precipitated by this post, plus a variety of financial stuff I read or listened to. Basically the idea is this- eventually USG doesn’t bail out something ‘too big to fail’. Why? First, it is extremely unpopular with the public. Second USG will have a massive amount of debt already on the books.

    So it stands to reason somebody like Trump or someone in his image (i.e. tapping the same voter base) will eventually say no. Awesome for real humans, probably, but the American Empire suddenly stops being as attractive as it once was for foreign investors. Decentralized systems become more attractive. So does China, for those longing for modern empire style finance, as long as it manages to stay afloat (I think they are sort of fighting the last war, and not thinking ahead- look at their treatment of bitcoin).

  2. John Q Public February 21, 2018 at 4:57 pm

    “Constant hysteria aside, China cannot be even a truly sovereign power until they are no longer utterly dependent on other powers for their wellbeing.”

    Damn straight.

  3. John Q Public February 21, 2018 at 10:16 pm

    Moldbug’s observation that fiat money is a sovereign’s equity is useful here. Why wouldn’t Amazon or Google keep selling people its stock as long as they are willing to buy it? It’s not like they can’t use the money.

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