Since joining this august body a couple of years ago on Intel Dump, I have read and engaged in discussions of how there is currently no existential threat to the US. Typically, this is in the context of the events of 9/11, the GWOT, and the like.
As the current economic events unfold, my thoughts return to a conversation I had with a friend back around 1963. He was a strategic economist for a major NY bank at the time. He was born and raised in Hong Kong, and did his graduate work at Oxford. Was quite unusual to find a Chinese person in such a responsible position in the "lily white" world of NY banking.
A group of us were enjoying an evening of beer and bull shit at a local tavern. The conversation turned to the "Red Menace". Nothing extreme, but intelligent conversation, much as we generally enjoy in this group. Victor said, "The threat to the US by Communist China is not military. The threat China poses to our existence, as we know it, is purely economic, it is massive and, probably, inevitable."
Victor then went on to address some of the reasoning behind his prediction. At the top of the list was the availability of massive, truly massive, amounts of cheap labor. Once China began to industrialize, this huge labor pool would offer a cost advantage and production capacity previously unknown in the world. I haven’t taken the time to check the stats of 1963, but today, slightly more than one out of every five inhabitants of this planet lives in China. Further, China is nowhere near having tapped the available manpower for industrial production. 76% of the Chinese population still lives in rural areas, versus 25% of Americans.
Victor was not concerned just about "competition", but addiction. He said that once China began to produce inexpensive goods for export, the US would become addicted, and thus dependent upon Chinese goods. And, China could afford to keep their prices low for an incomprehensibly extended period of time, because the vast pool of untapped labor would keep that cost element down considerably as compared to nations where the bulk of the labor pool is employed. He then spoke about the flow of money out of the US, and the resulting "ownership" of the US that could result. He also addressed some of the advantages that a Communist government/economy has in the manipulation of currency, especially the ability to operate without classical market considerations, for an extended period of time.
Now, this was in 1963, and the only significant "trade partner" offering cheap goods was Japan, and back then, Japanese "stuff" had not fully climbed above the "recycled beer can" level. America was still a major producer of the necessities of life purchased by Americans.
In summary, Victor said that all China had to do was begin to industrialize on a scale modest in proportion to its population, establish market inroads in the US and then be patient. Our voracious appetites and quest for a quick buck would succumb to good old patience and overwhelming numbers.
So, my good friends, are we wasting our time worrying about a military existential threat, when our own cultural propensities make us a sitting duck for economic suffocation by China? Does our need to incur debt to grow suffer a major strategic weakness in comparison to China’s almost "cash and carry" economy? Or, to draw on one of JD’s oft repeated phrases, have 19 miscreants with box cutters diverted our attention from 1.3 + billion industrious Chinese?
I’ve just grazed the surface of this issue. I leave it up to your comments to flesh it out!