“Everybody must take precautions against epidemics to smash the germ warfare of American imperialism!” (1952)

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China is doing something, as Sri Lankans can see in front of our eyes. Slate says they’re behaving “more like a multinational company than a global superpower.” Thomas Friedman says “China is doing moon shots… big, multibillion-dollar, 25-year-horizon, game-changing investments.” Both are empires, and empires rise and fall. How, exactly, has been theorized by people like Joseph Tainter, who basically says that empires prosper when they acquire new resources and crash when they become too complex. Essentially, like a business, if empires have an open market, then good. When things are good they tend to invest in expensive complexity – bureaucracy, schools, buildings, etc. Over time, however, everyone suffers from diminishing returns and all that complexity becomes a liability rather than an asset. When empires fall, they seem to fall under their own weight. Right now America seems to be faltering under its own weight, while China seems to be running free.

Some of the resources China exploits, of course, are its own people and the environment. This, however, is also how America began. The American economy was founded on slavery and the genocide of Native Americans and clearing and exploitation of huge amounts of land. They are now in a position to enjoy the benefits of this resource exploitation without having the resources right in front of them. In the course of their growth, American invested in some complex and expensive systems – Social Security, high finance, a huge military, etc. When the resource use was going good this was fine, they had money coming in to pay for it. Over time, however, every society runs into diminishing returns. What was once very profitable becomes merely so, and then only in appearances. To quote Tainter:

The shift to increasing complexity is at first a rational, productive strategy that yields a favorable marginal return. Typically, however, continued stresses, unanticipated challenges and the costliness of sociopolitical integration combine to lower this marginal return. As the marginal return on complexity declines, complexity as a strategy yields comparatively lower benefits at higher and higher costs. With continuation of this trend, collapse becomes a matter of mathematical probability. (Tainter, pg 127)

I think we’ve all experienced this in our own lives, whereby we invest in luxuries (rent, satellite TV, cell phones) which soon become necessities, mounting expenses that make it harder to adapt to shocks like medical bills or lost jobs. On the societal level, humans adapt more and more complex ways to exploit a resource niche until they’re sucking marrow from the bone, and finally its just bone. When the resource is depleted, the complex resource exploiting machine remains, consuming tons of resources itself (salaries, rents, etc). Take, for example, the music industry, financial services industry, etc. In those cases, they now often take out more value than they add.

China, by contrast, is exploiting the shit out of stuff – including cheap labor, their own environment, and other countries. To quote Friedman:

China is doing moon shots. Yes, that’s plural. When I say “moon shots” I mean big, multibillion-dollar, 25-year-horizon, game-changing investments. China has at least four going now: one is building a network of ultramodern airports; another is building a web of high-speed trains connecting major cities; a third is in bioscience, where the Beijing Genomics Institute this year ordered 128 DNA sequencers — from America — giving China the largest number in the world in one institute to launch its own stem cell/genetic engineering industry; and, finally, Beijing just announced that it was providing $15 billion in seed money for the country’s leading auto and battery companies to create an electric car industry, starting in 20 pilot cities. In essence, China Inc. just named its dream team of 16-state-owned enterprises to move China off oil and into the next industrial growth engine: electric cars.

Not to worry. America today also has its own multibillion-dollar, 25-year-horizon, game-changing moon shot: fixing Afghanistan. (New York Times)

What’s funny is that for all the ‘blood for oil’, the US is not even getting much oil or anything out of its conquests. A few zealots get to claim a moral high ground as world police while the reality, is torture, loss and waste. In fact, if anyone’s making money, it’s China. To quote Slate, “Look at Afghanistan, for example, where U.S. troops have been fighting for nearly a decade, where billions of dollars of American aid money has been spent—and where a Chinese company has won the rights to exploit one of the world’s largest copper deposits.” China also has bigger stakes in Iraqi oil than America.

At the end of the day, empire is a business, and it involves getting more out than you put in. Like prominent families, empire seems to begin with crime, proceed to genteel exploitation, then gets bigger, less industrious, even decadent, then collapses. The only way out, according to Tainter, is getting a new resource to exploit – be it conquest of land, a new energy resource, or a technological innovation.

Right now China is doing better on these counts, exploiting the shit out of everything. America, however, is bloated with defense and entitlement spending and crippled by colonization without benefits in Iraq and Afghanistan. Of course, some sort of technological revolution – particularly energy – seems to be on the books (it better be, seeing as the 20th Century had splitting the atom, cars, and Internet). This will lift all boats and probably give America another shot in the arm. China, meanwhile, is more prone to collapse than the American empire because everything depends on growth, they are riding on a wave of bad debts, human rights abuses and corruption that is only obscured by growth. Take away the growth and this Chinese empire will collapse, like other Chinese empires before it.

What will happen? Who knows. I just feel that things are shifting this way, especially with Indian growth. I don’t like Chinese TV that much, for me the best part of empire, but Sri Lanka for once seems uniquely positioned to benefit from whatever’s going on.

Posted on Tuesday, September 28th, 2010 in China, New York Times, Politics, Sri Lanka, USA.