New major military powers

[XaNDeR]

Admin. Text deleted for use of inappropriate language.

 

[Incognito129]

Correct, & I have never said otherwise. But as Ragnar Nurkse wrote, 'capital is a necessary but not a sufficient condition of progress'. The latter is the part you seem to have trouble with.

Dont try to finish this argument with a false dichotomy. You can grow without solid institutions. You will never grow as efficiently or completely to other countries but you will grow. On the other hand you can have the best institutions in the world, but with no capital investment you have nothing. You dont seem to understand this point.

Not so. Forget models for a while & study real world examples. You will find that there are cases where investment (e.g. a large part of the old Soviet food-processing industry) can destroy value. The raw materials were worth more than the output. If that investment had not been made, & the raw materials had been sold unprocessed, the economy would have been larger. The world is full of cases of investment which has failed to produce growth, in which the goods & effort invested have produced as much growth as a man digging a trench while someone else fills it in behind him. Foreign aid is responsible for some of the most egregious examples, e.g. the infamous groundnut scheme, or the massive CIDA-funded bakery in Dar-es-Salaam. Occasionally, a whole (usually centrally-planned) economy functions on that level for a while.

You've mentioned times when investments have failed. Not even close to a valid point. Obviously when companies or projects that people have invested in fail you lose what you started with.

If you invest productively you will grow. For investment to be productive requires the right conditions, & the right decisions. Wrong institutions, wrong incentives, & wrong decisions will be made, as in the above examples.

Obviously. If your an idiot then it wont matter. The assumption is people are competent. Incompetent people will make investments useless but it doesn't make investments in general useless without institutions and the proper endogenous variables.

When young, & still studying, there is a tendency, easy to fall prey to, to be very enthusiastic about what one has most recently learned. One can become carried away with it. It seems to explain everything, to be . . right. Twenty five years later, having watched things one learned as the latest, cutting-edge ideas having been modified, perhaps completely replaced, & having tested them against the real world & found that they need a bit of bashing & bodging into something less elegant to make them work, one tends to be rather less easily enthused with theories, & tend more towards pragmatic solutions.

Before you go on lecturing me thinking your right you need to be actually right. You dont have an argument, and dont try to take the cowards way out when your wrong.

 

[gf0012-aust]

Before this goes any further. Lets all remember to remain civil to each other.

 

[AGRA]

Moving on from the debate about the NATURE of economics...

Is there such a thing as 'new' major military powers?

While its possible to imagine that someone can challenge the USA will it actually happen?

A very interesting paper that looks at this issue and its effect on militaries is:

SQUARE PEGS FOR ROUND HOLES:
CURRENT APPROACHES TO FUTURE WARFARE AND THE NEED TO ADAPT
by Brigadier Michael G. Krause

http://www.army.gov.au/lwsc/Publications/wp/wp_132.pdf

I'll just cut and paste one very interesting paragraph:

War’s changing character: the US military dominance

The current US military dominance, and the general hegemony that the United States enjoys as the only superpower, is unprecedented in world history. There are several reasons for this. First, there has never before been a single superpower with such wide global interests and rapid and sustained global reach. Second, there has never been a power with global reach with a conventional capability that so exceeds its opponents as to make a conventional contest highly one-sided. Third, the United States is in the position where it has already achieved this domination without exhaustion and need only defend its position to remain pre-eminent. The onus is on others to catch, to match and to surpass. Fourth, the United States is the
key driver, and major underwriter, of many of the world institutions that manage global affairs, and is uniquely placed to exert influence. Unlike nuclear weapons, however, the US dominance can be undone—world history has shown that hegemonic status is not permanent.29 The only difficulty with
this argument is that it is arguing by example rather than the particular circumstances in which the United States finds itself. Just as the current situation of the United States within the world is unique, so might be its staying power.

 

[swerve]

Dont try to finish this argument with a false dichotomy. You can grow without solid institutions. You will never grow as efficiently or completely to other countries but you will grow. On the other hand you can have the best institutions in the world, but with no capital investment you have nothing. You dont seem to understand this point. .

On the contrary. I have said - twice - and this is the third time. Capital investment is necessary to growth.. Where we disagree is that you maintain that it is the only thing that is necessary. Did you once work for Goskomplan?

You've mentioned times when investments have failed. Not even close to a valid point. Obviously when companies or projects that people have invested in fail you lose what you started with. .

There are cases where misdirected capital investment has a negative impact on the economy which is much greater than merely the loss of the invested capital. I deliberately selected a few examples, all of which are cited in standard texts (the groundnut scheme has been used as an example for 50 years, & used to be in school economics textbooks) to illustrate the phenomenon.

Obviously. If your an idiot then it wont matter. The assumption is people are competent. .....

Exactly! Theoretical models have built-in assumptions. Often, the assumptions are faulty. Among demonstrably faulty assumptions are 1) perfect information (which is why there are models which try to not to assume it) & 2) economic rationality. Note the word "economic" in there. It's a pretty standard assumption in economic models, but in the real world, rational behaviour does not always (actually, it frequently doesn't) conform to an economists definition of rationality. Human behaviour is affected by too many variables for economists to model them.

You are, as you have just made explicit, assuming that when a theoretical model assumes economic rationality, & real life fails to match it, the fault is not in the model but in reality.

BTW, the people responsible for the economically damaging investments I mentioned were highly qualified, expert, academic economists. More doctorates between them than you could shake a stick at.

 

[merocaine]

rational determinism.... the one thing the unites The Harvard school of business, Marxist economic theory and the jesuits!

 

[CodE]

'New' military powers

Moving on from the debate about the NATURE of economics...

Is there such a thing as 'new' major military powers?

Sure there can be such a thing as a new military power. The United States emerged from the shadow of the UK and arguably the French to become a world power. There's no reason why military powers can't rise and fall. Although this process will take a very long time and we may not see it happen in our lifetime.

 

[swerve]

rational determinism.... the one thing the unites The Harvard school of business, Marxist economic theory and the jesuits!

You do realise that if you follow this line of reasoning too far we'll have to kill you? Can't have everyone knowing.

 

[CodE]

You do realise that if you follow this line of reasoning too far we'll have to kill you? Can't have everyone knowing.

what was he even talking about? incredibly confusing! :nutkick - he does need to be careful now though!

 

[Incognito129]

On the contrary. I have said - twice - and this is the third time. Capital investment is necessary to growth.. Where we disagree is that you maintain that it is the only thing that is necessary. Did you once work for Goskomplan?

Hold on. I never said institutions were not necessary. I pointed out the key difference between South and North, being the institutions.

There are cases where misdirected capital investment has a negative impact on the economy which is much greater than merely the loss of the invested capital. I deliberately selected a few examples, all of which are cited in standard texts (the groundnut scheme has been used as an example for 50 years, & used to be in school economics textbooks) to illustrate the phenomenon.

Your point doesn't disprove or reduce the importance of capital. It shows that there are times when investments fail, and they will regardless of institutions. If your point is that human capital is as important, yes it is. But if you were at all familiar with the endogenous growth model you'd know that it states that as long as savings rate + tech and human capital growth rate is larger than the deprecation rate then countries will grow forever. This in itself is ludicrous and probably the biggest reason why endogenous models are not accepted anywhere.

Exactly! Theoretical models have built-in assumptions. Often, the assumptions are faulty. Among demonstrably faulty assumptions are 1) perfect information (which is why there are models which try to not to assume it) & 2) economic rationality. Note the word "economic" in there. It's a pretty standard assumption in economic models, but in the real world, rational behaviour does not always (actually, it frequently doesn't) conform to an economists definition of rationality. Human behaviour is affected by too many variables for economists to model them.

There are models that introduce asymmetric information. You need to assume rationality because you cannot model a bunch of idiots who buy stuff at random. Econometrics touches into this but I didn't go that route.

Stuff like competent and rational behavior are not out of place assumptions. They may not be true all the time but they are true most of the time and the assumptions hold a majority of the time.

You are, as you have just made explicit, assuming that when a theoretical model assumes economic rationality, & real life fails to match it, the fault is not in the model but in reality.

BTW, the people responsible for the economically damaging investments I mentioned were highly qualified, expert, academic economists. More doctorates between them than you could shake a stick at.

I've never said that. Someone who Admin: Text deleted up an investment doesn't prove anything other than the fact that people can Admin: Text deleted up. There are alot of endogenous models that try to factor this in but you are factoring in a variable with no significant relation to the dependent variable. A growth model is a growth model it doesn't factor when an economy doesn't grow.

 

[gf0012-aust]

Last warning before this thread goes to Valhalla.

If I have indicated in other threads that the use of the scatalogical invective is inappropriate, then one would surely think that the use of the reproductive invective is just as inappropriate. Try and use a thesaurus at least.

Either work out how to have a conversation online without descending into the use of monosyllabic invectives to reinforce your argument - or don't contribute until you've calmed down.

Exercise some discipline.

 

[swerve]

Hold on. I never said institutions were not necessary. I pointed out the key difference between South and North, being the institutions

No, you said the difference was investment. Look at the post where I referred to the parlous economic state of Africa.

Your point doesn't disprove or reduce the importance of capital.

Of course it doesn't. It isn't meant to. For the fourth time, capital is essential. Please stop misrepresenting my point of view.

Stuff like competent and rational behavior are not out of place assumptions. They may not be true all the time but they are true most of the time and the assumptions hold a majority of the time.

Competence & rationality are reasonable assumptions most of the time, true, but rational behaviour is not necessarily economically rational. Human beings have many other motivations. And most of the time does not mean all the time.

A growth model is a growth model it doesn't factor when an economy doesn't grow.

Precisely. It is an explanation of why economies grow, when they do. It is not a prediction that economies will grow. That requires the right policies & institutions, as well as well-directed investment.

This all began with you saying that GDPs per capita (referring to China? Can't be bothered to confirm) will converge on that of the lead country (currently the USA), because that's what the currently most widely-accepted model predicts. What I said (among other things) is that the model does not predict that. It says what will happen in a certain set of circumstances, but those circumstances do not currently exist in every country, so even if perfectly correct, the model does not necessarily apply. The real world does not always match the conditions required by the model. I'm sure Russia does not fit the model, for example, & I doubt China does. Japans convergence came to a juddering halt when it ran into limits imposed by institutional structures - i.e. it didn't fit the model. Etc.

[edited to incorporate correction from GD]

 

[Snayke]

The current US military dominance, and the general hegemony that the United States enjoys as the only superpower, is unprecedented in world history. There are several reasons for this. First, there has never before been a single superpower with such wide global interests and rapid and sustained global reach. Second, there has never been a power with global reach with a conventional capability that so exceeds its opponents as to make a conventional contest highly one-sided. Third, the United States is in the position where it has already achieved this domination without exhaustion and need only defend its position to remain pre-eminent. The onus is on others to catch, to match and to surpass. Fourth, the United States is the key driver, and major underwriter, of many of the world institutions that manage global affairs, and is uniquely placed to exert influence. Unlike nuclear weapons, however, the US dominance can be undone—world history has shown that hegemonic status is not permanent. The only difficulty with this argument is that it is arguing by example rather than the particular circumstances in which the United States finds itself. Just as the current situation of the United States within the world is unique, so might be its staying power.

Well that article is kinda unfair. They enjoy a global reach due to MODERN technology. Of course no prior superpower(besides the British Empire) has had such extensive reach.

Opponents of the US have been militaries that pale in comparason to the US. That would be a good statement if the US had fought an enemy with somewhat of an equal footing. However, the guerillas of South Vietnam were quite effective until Tet.

I also don't see the US slipping out of the limelight for quite a while. I read an article about US nuclear primacy. The US can actually win a nuclear war. :/ But you all can be the judge on that one.

http://www.foreignaffairs.org/20060...-g-press/the-rise-of-u-s-nuclear-primacy.html

But its quite true what that article said about using historical examples of superpowers. At the time, it is incomprehensible that they could fall, and we're already seeing the starts of it in terms of economics and even the modernisation of militaries across the globe.

 

[merocaine]

The current US military dominance, and the general hegemony that the United States enjoys as the only superpower, is unprecedented in world history. There are several reasons for this. First, there has never before been a single superpower with such wide global interests and rapid and sustained global reach. Second, there has never been a power with global reach with a conventional capability that so exceeds its opponents as to make a conventional contest highly one-sided. Third, the United States is in the position where it has already achieved this domination without exhaustion and need only defend its position to remain pre-eminent. The onus is on others to catch, to match and to surpass. Fourth, the United States is the
key driver, and major underwriter, of many of the world institutions that manage global affairs, and is uniquely placed to exert influence. Unlike nuclear weapons, however, the US dominance can be undone—world history has shown that hegemonic status is not permanent.29 The only difficulty with
this argument is that it is arguing by example rather than the particular circumstances in which the United States finds itself. Just as the current situation of the United States within the world is unique, so might be its staying power.

Unfortunately this is going to come back to economics, military power is built on economic might, as long as the US maintains its economic lead the lightly hood is its continued hegemony.

The danger is what will happen in the next 20 years? As far as I can see the US has 3 main external threats to its position as the worlds hegemon.
China, if it manages to hold together, and if it manages to turn its impressive economic growth into productivity growth.
India, although further back when it comes to industrialization, it's growth is impressive, it suffers from a certain amount of civil strife (insurgencies) but contains a vibrant political system.
Europe, if it continues on its road to political/economic union, could for a time become the largest economic and military force on the planet, if that occurs it will not for long defer to American political and military leadership, as it has long since stopped deferring to it economically.

 

[Snayke]

merocaine, economic growth is increased production. China's economic growth means they are continually producing more each year. I'm not sure what you mean when you say "turn its impressive economic growth into productivity growth".

 

[Ozzy Blizzard]

economic growth dosent = industrial capacity. Economic growth includes services. GDP is the agregate ammount of economic activity within a nation, not just how much stuff they made.

 

[Snayke]

Sorry I was confusing the production of goods and services with industrial capacity. :/ Should be specific though!

 

[ainanup23]

NEw Powers

Well the new powers like India and China are well on their march, but ?I don`t think they are ever aggressive or will attack any nation unlike US or UK. These do have global power ambitions but if they are being defensive in arming themselves . India and China are growing economically , and launching an military attack on any perceived rival will affect their own economies. China is arming themselves fearing US domination , while India is doing the same given China`s defence procurement. [stay on topic]

US and other powers require INdia`s help in keeping the sea lanes of Indian Ocean free for smooth flow of shippings plying to and fro SE Asia and the west .

 

[crobato]

Economic growth is not mutually exclusive. The picture being painted here is that if one guys goes up, the other guy goes down. That's not the case. When one guy goes forward, it tends to bring the other guys along, and the collective momentum of all the participants help each other. Japan's recent economic resurgence, for example, has a lot in connection with China's. China also covered up the US massive debtfall and by exporting cheap products, also exports deflation to the US, which in turn means more capital to invest elsewhere, towards China and India which then exports again. You can see a cycle of mutual economic interdependence that leads to one place then another and then back, and then feeds that cycle again.

So economic growth is a network that actually bolsters everything within.

But at the same time, the risk is that if one goes down, he takes down the others with it. Potentially, it works like a domino principle and can be quickly catastrophic. The one thing we don't have a historical precedence now is that information today moves at the speed of light, not at the back of a horse. Thus a stock market collapse here, and wham wham wham all over the place around the world within a day. You can change from tycoon to pauper overnight.

 

[Snayke]

You're referring to globalisation?