Systems Dynamics Follow Their Own Rules – and Not Groupthink
While America’s cultural and economic ascendency is portrayed as an End of History ‘normal’, it represents an obvious anomaly, Alastair Crooke writes.
Toward the end of his The Rise and Fall of the Great Powers (1987), “[Yale Historian] Paul Kennedy expressed the then-controversial belief that great power wars were not a thing of the past. One of the main themes of Kennedy’s history was the concept of overstretch – that is to say, that the relative decline of great powers often resulted from an imbalance between a nation’s resources and its commitments”, writes Professor Francis Sempa.
Few in the western Ruling Class even accept that we have reached such a point of inflection. Like it or not, however, great power combinations are fast rising across the globe. U.S. influence already is shrinking back to its Atlanticist core. This shrinkage is not simply a matter of resources vs commitments; that is too simplistic as an explanation.
Metamorphosis is occurring both as the result of the exhaustion of the political and cultural dynamics which powered the previous era, as much as is energised by the vitality of new dynamics. And by ‘dynamics’ is meant too, the exhaustion and coming demise of underlying mechanical financial and cultural structures which in, and of, themselves are moulding the new politics and culture.
Systems follow their own rules – the rules of physical mechanics too – as in, what happens when a further grain of sand is added to a complex, unstable sand pile. Thus, unlike in politics, neither human opinion, nor election outcomes in Washington, will necessarily have the capacity to mould the next era – any more than the opinion of Congress alone can reverse a cascade in a financial sand pile – if big enough – by pouring more sand grains on its top.
The fact is that any expiring groupthink – beyond a certain point on the down-curve – cannot reverse long-term dynamics. In the transition phase from one era to another, it is ‘events’ – ‘events’ which loose-off the truly transformative artillery shells.
In this context, President Xi’s message to the Gulf and other energy-producer states is such an ‘Event’ – one that neatly ‘flips’ an old-entrenched dynamic for a new one. Soltan Poznar has highlighted the framework underlying the proposals made by XI to the Gulf states’ mechanics and implications in his piece, Dusk for the Petrodollar (paywalled):
The old dynamic of oil in dollars in return for American security guarantees gives place to oil for transformative inward Chinese investment, funded in yuan. In some 3–5 years, the petrodollar may be gone, and the non-dollar landscape radically re-worked.
The dominant Élite (Panglossian) view however exudes disdain that the world will change: 2023 maybe be economically difficult for the U.S., due to a mild recession, but this will be nothing more than a run-of-the-mill affair – and that very soon, all the world will return to an U.S.-on-top ‘normal’.
Nonetheless structures – whether psychic, economic or physical (i.e. those related to energy dynamics) are in radical transition. And, consequently, components presently defined as ‘normal’: i.e. two decades of zero interest rates; zero inflation and oodles of newly ‘printed’ credit – turn out rather, to be the abnormal. Why?
Because two twin anomalous structural dynamics were exhausted: Cheap inflation-killing consumer goods coming from China, and cheap inflation-killing Russian energy, both underpinned competitive western production. Consequently, the West lived ‘high on the hog’ of its credit-led expansion, whilst enjoying near zero inflation.
Plainly put, endless cost-free ‘money’ of course is a short-term aberrant condition – one that gives a semblance of prosperity, whilst concealing its distorting pathologies.
Paradoxically however, it was the West that killed its own ‘normal’:
The Trump Administration’s strategists re-discovered the notion of ‘great power competition’ to contain and diminish China, whilst the Biden Administration has gone full throttle on regime change in Russia. The result: Interest rates are spiking and inflation has taken a firm hold – absent those former two ‘inflation-killer’ dynamics.
The real game-changer is rising interest rates which existentially threatens the ‘golden decades of easy, free money’.
The point here is that those former dynamics are not about to U-turn. They have fled the scene. Western classical economists predict either inflation or reces
Article from LewRockwell