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Foreign Affairs

3 New Thoughts on China’s Emergence as a Superpower

September 6th, 2012 // 2:19 pm @

There is a lot of recent chatter about China, even though Iran is the big topic in international affairs.

Recent articles and books on China mostly center around one of two themes.

One side argues that China is a serious and growing threat, the other that China is misunderstood and Washington should do more to cooperate with Beijing.

A third, more relevant, argument is needed, and it goes something like this: China isn’t the problem, Washington is!

Three Trends

Consider the following three trends:

1-Many China experts in the West criticize China because it is becoming a superpower without showing much likelihood of getting involved in world leadership.

But this is actually a normal historical pattern. New superpowers benefit because the older superpowers are overextended around the globe trying to “exert leadership” in every part of the earth.

For example, Britain’s overreach made it simple for the U.S. to become a superpower, just as Spain’s overextension did the same for Britain. Rome did the same thing. Critics say that it was Hitler who weakened the UK, but imagine how strong London would have been if it had stopped trying to police the world for the decades before Hitler and had instead built its wealth and strength. Hitler may well have declined to spread across Europe in the face of such power.

One would think that an old superpower in a battle with a rising new threat would be smart enough to reduce its global overreach and return to the things that once made it competitive. But, historically, logic seldom reigns in superpower decline.

2-China is currently involved in aggressive currency competition. It seems to want the U.S. currency to be weakened, and for the U.S. credit rating to be downgraded again. It is also pushing for the dollar to lose its world reserve currency status (which allows Washington to print money at will without metal backing).

When this same thing occurred to Britain in the 1970s, the British economy was deeply hurt and still hasn’t fully recovered. In fact, the average net worth of most people in the UK was decreased by more than 30% overnight when this happened.

Such a circumstance in the current U.S. would be a major boost for Chinese power in the world, and the American economy is presently vulnerable. The natural consequence of such a development would likely come in two stages. First, a new reserve currency would be an IMF or other international tender backed by currencies from several top nations including the U.S., EU and China. Second, eventually China’s currency would be adopted as the world reserve.

This is not a far-fetched possibility. As mentioned above, it happened to Britain as recently as the 1970s.

Shockingly, while China is actively promoting this scenario, Washington is basically ignoring it and suggesting tax increases, increased government spending, and more regulation. This plays right into the Chinese strategy, and is worse than the old clichés of arranging chairs on the deck of the Titanic or fiddling while Rome burns. We have time to turn this around, but Washington is preoccupied with increasing taxes and regulations, both of which actually strengthen the Chinese agenda.

3-Chinese firms (government owned) are buying up many of the world’s natural, mineral and energy resources on all continents—including North America. U.S. firms can’t compete with such purchases because of the regulations and extra costs required by the federal government. Washington is literally refusing to compete with China and forbidding private American companies from doing so either.

Don’t Blame China

As I’ve written before, we shouldn’t blame Beijing for this. It’s natural to try to increase one’s power and place in the world. Good for the Chinese for expanding their influence and wealth! That’s the pursuit of happiness.

But it is amazing that Washington won’t let U.S. free enterprise compete fairly in this contest. If Americans want to compete with the emerging Chinese Century, we should give freedom a chance. Free enterprise is significantly and demonstrably more effective than the kind of centralized state economics used in China.

But a federal government in Washington that is highly bureaucratized and addicted to more regulation isn’t much better. In fact, when a Chinese company with the backing of Beijing competes with an American firm that is highly hampered by Washington, it isn’t surprising that the Chinese win.

The battle for leadership in the 21st Century couldn’t be clearer: China vs. the U.S.

If this were as simple as authoritarian Chinese state capitalism versus American free enterprise, the battle would be short and easily won by the United States.

But the battle is actually authoritarian Chinese state capitalism versus overreaching federal U.S. regulations, higher taxes, bigger government and other policies that dampen American business endeavors.

If this reality remains, Beijing has all the advantages.

Unless something changes, and soon, we are going to lose this battle.

Category : Blog &Current Events &Economics &Foreign Affairs

A Different View

August 13th, 2012 // 12:54 pm @

In a stunning reversal of the common wisdom, a leading voice in the United States is arguing that Iran should be allowed to pursue and get nuclear weapons.

And the person making the argument isn’t Ron Paul.

This view comes from long-time international relations expert Kenneth Waltz.

His idea, and the case he makes for its implementation, was published in the influential journal Foreign Affairs (July/August 2012).

As such, it has a real chance of gaining support in Washington.

Waltz says that there are four possible outcomes to the Iranian nuclear crisis.

One, diplomacy and sanctions could convince Iran to stop seeking nuclear capability.

Two, Iran might obtain nuclear power but not weaponize, like Japan.

Three, Iran might continue developing a bomb and eventually obtain it despite opposition from the U.S. and Israel.

All of these are unlikely because, as Waltz argues, Iran doesn’t want to give up this project, non-weaponized nuclear power could be quickly converted to weapons, and at some point Israel or the U.S. is likely to use force to stop the Iran bomb project.

A fourth option would be to support the Iranians in gaining nuclear capacity.

Waltz says this would stabilize the Middle East by creating a Cold-War style balance between Israel and Iran.

He points out that China, India and Pakistan all became “more cautious” after going nuclear.

I’m not a fan of this view, but I think a lot more regular Americans need to study the issue and make their opinions felt.

We have left international affairs to the experts for far too long.

Read Waltz’ article, and see what you think.

Then study the topic and start sharing your views.

It’s time for regular people to get much more involved in influencing what America does around the world.

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odemille 133x195 custom Egypt, Freedom, & the Cycles of HistoryOliver DeMille is the chairman of the Center for Social Leadership and co-creator of Thomas Jefferson Education.

He is the author of A Thomas Jefferson Education: Teaching a Generation of Leaders for the 21st Century, and The Coming Aristocracy: Education & the Future of Freedom.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

Category : Blog &Current Events &Foreign Affairs

Pooled Sovereignty

June 21st, 2012 // 7:06 pm @

The breeding ground for a global system that supports pooled sovereignty is found in the top universities, and it is promoted by the bureaucratic elite in many nations.

Much of what occurs in Washington only makes sense to those who understand this drift toward globalization.

For example, a push for increased government spending, debt and regulation on small business (even in the face of recession and a struggling economy) make perfect sense if the goal is to shift the American economy away from international leadership to global participation—to make the U.S. economy and government more like those of Europe and Asia.

Stimulus, universal health care, less entrepreneurship (through increased levels of government regulation)—all are necessary to create an American economy that can fit seamlessly with the industrialized European/Asian nations.

Another step in this process is to end the use of the U.S. dollar as the world’s reserve currency and replace it with an IMF or other currency.

The IMF has already proposed this change, and international support for it is growing.

Just to be clear, when the dollar replaced the British pound as the world’s reserve currency in the 1970s, the average net worth of nearly every home in Britain fell more than 30% the day after the change.

The British economy has still never fully recovered, nearly forty years later.

If the same change comes to the U.S., we will likely experience a worse economy for the next four decades than we have over the past four years.

Unfortunately, as Forbes reported, “It’s hard for the State Department to imagine an international agreement to which America is not part.” Republican and Democratic presidents since FDR have drastically decreased American freedom using treaties.

This is bad for Americans—good for pooled sovereignty.

Ultimately, there are two types of leadership that can turn this around: presidential leadership, and citizen leadership.

Sadly, few candidates for president (from either party) and exactly zero elected presidents since 1959 have effectively pushed back against this growing threat.

As for the American citizenry leading the charge, find out what percentage of your friends can tell you the details in the Law of the Sea Treaty, the Rome Statute, or UN Agenda 21, and that percentage is about how likely the people are to effectively lead.

In fact, this lack of citizen leadership means there is little incentive for presidents to take action against pooled sovereignty.

Or to put this in practical terms, a half-century with a bad economy is likely ahead.

Unless something changes…

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odemille 133x195 custom Egypt, Freedom, & the Cycles of HistoryOliver DeMille is the co-founder of the Center for Social Leadership, and a co-creator of Thomas Jefferson Education.

He is the co-author of New York Times, Wall Street Journal and USA Today bestseller LeaderShift, and author of A Thomas Jefferson Education: Teaching a Generation of Leaders for the 21st Century, and The Coming Aristocracy: Education & the Future of Freedom.

 

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

Category : Blog &Citizenship &Current Events &Featured &Foreign Affairs &Leadership

Type A Voters and the Simple Fix

June 7th, 2012 // 2:23 pm @

Raghuram Rajan of the University of Chicago recently said in Foreign Affairs (May/June 2012):

 

For decades before the financial crisis of 2008, advanced economies were losing their ability to grow by making useful things. 

“But they needed to somehow replace the jobs that had been lost to technology and foreign competition and to pay for the pensions and health care of their aging populations.

“So in an effort to pump up growth, governments spent more than they could afford and promoted easy credit to get households to do the same. 

“The growth that these countries engineered, with its dependence on borrowing, proved unsustainable.”

Now many of the nations in Europe, North America and leading Asian countries are facing the consequences of their reliance on debt.

We call it the economic crisis of 2008, or the Great Recession, but it began long before the Bush or Obama administrations.

Indeed, during the Ford and Carter eras of the late 1970s, constitutional scholars widely warned of this very problem.

Sadly, their recommendations went unheeded.

It now falls to our generation to deal with the realities of over forty years of bad policy, and the economic challenges ahead will likely be worse than economists are admitting.

The problems will likely still plague our children and grandchildren in their earning years.

Raghuram Rajan suggests the following fixes:

  • Stop using debt as the solution to increasing demands for government and private spending
  • Educate or retrain the sectors of workers whose jobs are being mechanized, replaced, or sent abroad
  • Create government policies that encourage entrepreneurship and innovation
  • Reduce regulations that hurt competition
  • Shrink government as needed to reduce unnecessary and unproductive functions
  • Move beyond attacks on bonuses and “the one percent” and emphasize the need to provide more entrepreneurial opportunity
  • Avoid calls for stimulus

Of course, not all nations will follow identical policies, but these are the general principles of overcoming our economic challenges. Rajan’s article outlines needed changed in more detail, and one quote is worth repeating:

 

Americans should remain alert to the reality that regulations are shaped by incumbents to benefit themselves.

 

If only we could stitch this quote in needlepoint, frame it and hang it in every American living room.

And get every voting citizen to read each issue of Foreign Affairs.

We have less of a Washington problem and more of a citizen problem. Too many citizens are on vacation from our duties. We want to be Type B citizens who vote, attend jury duty and watch the news, and to look down on Type C citizens who don’t do any of these.

But freedom depends on Type A citizens, who closely watch what government does and make their influence felt.

Imagine an America where the first branch of government consists of thousands of unelected citizens who study history and the great classics, read proposed treaties, important court cases, executive orders, budgets, and top bills proposed at the local, state and Congressional levels. That’s the formula for freedom, and no other formula has ever worked—in America or in all of history.

When the people don’t actively watch out for their freedoms, they lose them.

When Presidents, Senators, Governors, Justices and CEOs have an entirely different level of education than the average citizens, freedom will decline.

Again, there are no exceptions in history. In fact, there is a word for such a divide between the education of the leaders and the education of the masses. The word is Oligarchy.

As Christopher Hayes wrote in Twilight of the Elites, “In reality our meritocracy has failed not because it’s too meritocratic, but because in practice, it isn’t very meritocratic at all…. In other words: ‘Who says meritocracy says oligarchy.’”

Hayes also noted that, according to Pew Research, Canada is almost 2.5 times more economically mobile than the United States, Germany is 1.5 times as mobile, and Denmark is 3 times as mobile.

So a young person in Denmark is three times as likely to rise from the middle to the upper class as our children in America. Indeed, the only advanced nation where such progress is less likely than in the U.S. is Britain—the modern icon of class divides.

Again, the solutions are relatively simple: reduce regulation that dis-incentivizes economic growth, adopt policies that encourage entrepreneurship and innovation, and stop relying on debt.

This will cause governments and households to tighten their belts in the short term, but long-term free enterprise will rekindle economic growth and widespread prosperity.

If only our leaders would take notice. As Hayes wrote in dystopian terms:

 

It would be a society with extremely high and rising inequality yet little circulation of elites.

 

“A society in which the pillar institutions were populated by and presided over by a group of hyper-educated, ambitious overachievers who enjoyed tremendous monetary rewards as well as unparalleled political power and prestige…, a group of people who could more or less rest assured that now that they have achieved their status, now that they have scaled to the top of the pyramid, they, their peers, and their progeny will stay there.

 

“Such a ruling class would have all the competitive ferocity inculcated by the ceaseless jockeying within the institutions that produce meritocratic elites, but face no actual sanctions for failing at their duties or succumbing to the temptations of corruption….

 

“In the way bailouts combined the worst aspects of capitalism and socialism, such a social order would fuse the worst aspects of meritocracy and bureaucracy.

 

“It would, in other words, look a lot like the American elite circa 2012.”

 

All of that would be fine, if the rest of the people lived in a society with true free enterprise. Let the super-elite act like elites always have, but let the regular people live in freedom.

Over time, freedom creates growth, opportunity, socio-economic mobility and widespread prosperity.

Alas, the elites seldom ever make such changes on behalf of the people. If we want to be free, regular people must start behaving like Type A citizens.

 

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odemille 133x195 custom Egypt, Freedom, & the Cycles of HistoryOliver DeMille is the co-founder of the Center for Social Leadership, and a co-creator of Thomas Jefferson Education.

He is the co-author of New York Times, Wall Street Journal and USA Today bestseller LeaderShift, and author of A Thomas Jefferson Education: Teaching a Generation of Leaders for the 21st Century, and The Coming Aristocracy: Education & the Future of Freedom.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

Category : Blog &Citizenship &Constitution &Featured &Foreign Affairs &Government &Independents &Leadership &Politics &Statesmanship

Next…?

May 14th, 2012 // 10:16 am @

THE NEXT BIG TREND: Pooled Sovereignty
by Oliver DeMille

I recently spent two days in a Barnes and Noble reading the bestsellers on current trends and issues. I do this as often as I can—at least three times a year.

Sometimes I emphasize business bestsellers, and other times I focus on political books.

When I was too ill to do these visits for a time, I used Amazon to order the bestsellers every four months. But I prefer the bookstore, because in addition to books it has all the leading periodicals.

How to Read a Book(store) in 4 Easy Steps

I usually find a comfortable chair and stack 20-30 volumes and magazines on the table or floor next to me. Then I skim everything that looks interesting. That’s Step 1.

Step 2 consists of reading the books and articles that really pique my interest. I read them closely, and take notes in my notebook. Step 2 takes at least three hours and sometimes a lot more. If needed, I go back for a second day of reading.

Step 3 is buying the books and periodicals I want to have in my personal library, and Step 4 is re-reading them and organizing my notes from the trip and writing as needed.

On this trip, my travel plans got delayed, so I ended up staying longer than expected. I perused the business bestsellers and added more books to Step 2. Then I skipped to Step 4 and studied three books I’d already read over the last two days.

When I do these bookstore research trips, I’m always looking for something special. I want to see developing trends, new directions, and significant key words that signal where cutting-edge thought is headed. Only once in a while do I find a truly Big Trend, one which promises to remake the future. “Pooled Sovereignty” is just this kind of trend.

Sovereignty Broken Down

Sovereignty is the final say on something, or, having the ultimate power. The American framers were so concerned with the abuses caused by the limitless power of the British government that they established America with split sovereignty.

This meant that the federal government had just twenty powers, all listed and numbered in Article I, Section 8 of the Constitution. The final say, or sovereignty, over everything else was left to the states, or to the people – and the states were limited in their respective constitutions.

The people were ultimately sovereign.

Moreover, just in case the federal government tried to ignore the Constitution and usurp sovereignty from the states and the people, the framers divided the smaller portion of sovereignty given to Washington D.C. into three branches and established checks and balances to keep too much power from accumulating in any one place.

For decades scholars, students and interested citizens from both Left and Right have warned that sovereignty is centralizing in Washington, that split sovereignty is being replaced by a massive centralized sovereignty—all power in one place.

Pooled sovereignty is even worse. This occurs where international organizations or treaties make the final decisions for the people, regardless of what national governments say. Indeed, some of the most damaging choices being made today are decided without the consent of Congress or the Supreme Court – not to mention the states or the people. They are made by treaties, the United Nations, G-20, World Bank, International Monetary Fund and other international organizations.

Most Americans turn off their thinking when they hear this list of international agencies—but the elite perk up with interest. This is where the buzz is.

The breeding ground for a global system that supports pooled sovereignty is found in top universities, and it is promoted by the bureaucratic elite in many nations. Much of what occurs in Washington only makes sense to those who understand this drift toward globalization.

The Grand Design

For example, a push for increased government spending, debt and regulation on small business (even in the face of recession and a struggling economy) make perfect sense if the goal is to shift the American economy away from international leadership to global participation—to make the U.S. economy and government more like those of Europe and Asia.

Stimulus, universal health care, less entrepreneurship (through increased levels of government regulation)—all are necessary to create an American economy that can fit seamlessly with the industrialized European/Asian nations.

Another step in this process is to end the use of the U.S. dollar as the world’s reserve currency and replace it with an IMF or other currency. The IMF has already proposed this change, and international support for it is growing.

Just to be clear: When the dollar replaced the British pound as the world’s reserve currency in the 1970s, the average net worth of nearly every home in Britain fell more than 30% the day after the change. The British economy has still never fully recovered, nearly forty years later.

If the same change comes to the U.S., we will likely experience a worse economy for the next four decades than we have over the past four years.

Unfortunately, as Forbes reported, “It’s hard for the State Department to imagine an international agreement to which America is not part.”[i] Republican and Democratic presidents since FDR have drastically decreased American freedom using treaties. This is bad for Americans, good for pooled sovereignty.

Ultimately, there are two types of leadership that can turn this around: presidential leadership, and citizen leadership.

We Need You to Lead Us

Sadly, few presidential candidates (from either party) and exactly zero elected presidents since 1959 have effectively pushed back against this growing threat.

As for the American citizenry leading the charge: find out what percentage of your friends can tell you the details in the Law of the Sea Treaty, the Rome Statute, or UN Agenda 21, and that is a predictor of how likely the people are to effectively lead.

In fact, this lack of citizen leadership means there is little incentive for presidents to take action against pooled sovereignty. Or to put this in practical terms, a half-century with a bad economy is likely ahead.

Unless something changes…

We need citizens who study what our government is doing, who read treaties and court cases and executive orders, etc. Without this, the age of American prosperity will continue to decline.

Where to start? The three books I closely studied at Barnes and Noble are an excellent beginning. If you are liberal, try Drift by Rachel Maddow. Conservatives will probably prefer Dick Morris’s book Screwed. If you’re an independent, read them both. In addition, everyone should read How Do You Kill a Million People by Andy Andrews. Just reading these books and the documents they cite would be a great study on current America.

The future belongs to our citizens—and the level of our citizenship will determine what happens in the years and decades ahead. If we are Type B citizens (who vote, go to jury duty, and watch the news), we’re going to witness the decay of American freedom and prosperity.

We need Type A citizens, who in addition to voting and jury duty also deeply study the issues, government documents and decisions our government officials are making. We can only influence things if we know what’s really happening.

And: Next?

The second day at Barnes and Noble, the intercom announced that children’s reading time was starting. I took a break from reading and walked over to see America’s future. One mother brought her small son, and she read a thick book while he enjoyed reading hour alone. I was surprised they went ahead with the reading hour when only one child showed up. I don’t know why others didn’t bring their children, and I wonder what kind of America this boy and his peers will inherit.

I asked his mother what book she was reading. It was titled—no lie—City of Lost Souls. I wish that boy had been joined by an army of his peers—preparing to lead.

All through history, free people have been nations of readers. When the people oversee the government, they remain free. When they don’t…

Category : Aristocracy &Blog &Book Reviews &Citizenship &Constitution &Current Events &Foreign Affairs &Government &Independents &Leadership &Statesmanship

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