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Ferguson/Fallows on China
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This 75-minute dialogue between Niall Ferguson and James Fallows, about China and its relationship with the U.S., is nuanced, detailed, and thought-provoking.

(My view here is colored by the facts that a) James Fallows has been my favorite journalist since I started reading his Atlantic articles back in college and b) I want to somehow, somehow, learn to speak like Niall Ferguson. Scottish accent and all? I think so.)

Anyway, Ferguson and Fallows really argue here—in the way two smart people argue over dinner, not in the way that people argue (“argue”) on cable news. It’s always surprisingly thrilling to see people actually think on camera.

To set it up, the point they don’t dispute is that, right now, the world’s most important entity is “Chimerica”—the blended economies of China and America. At this point, even after the economic shocks of 2008 and 2009, they are still inseperable, and incoherent without each other.

Ferguson and Fallows disagree on what happens next. Ferguson says Chimerica is doomed, and get ready for a painful disruption. Fallows, fresh off of three years living in China, is more optimistic—he thinks the relationship is flexible, durable, and many-faceted.

I saw Niall Ferguson debate Peter Schwartz here in San Francisco, and all I gotta say is: I wouldn’t want to face off with this guy across a stage. He is erudite, to be sure; but he also carries and deploys his erudition in a particularly cutting way—like an Oxford don James Bond.

Anyway, I emerged from the 75 minutes mostly on the side of Fallows—but I always appreciate Ferguson’s gloomy, ultra-realist point of view. Also, Fallows follows up here.

July 13, 2009 / Uncategorized

11 comments

What does “ultra-realist” mean in this context?

* Sometimes it means: discarding any ideological considerations in favor of material ones, specifically those of power politics and the security of states.

* Sometimes it means: conceiving of power politics as a zero-sum game, where one state’s relative advantage always comes at another’s (and usually EVERY other’s) disadvantage.

* Sometimes it means: seeing global affairs as an existential struggle to the death between actors, where every nation is one misstep away from total annihilation, or worse, shuddering irrelevance.

This veers dangerously close to the “national greatness” obsessions of conservatives or Heideggerian pretensions of neoconservatives. The best response to this is ridicule, as practiced by Brad DeLong:

“I sometimes think that liberal individualism is something like the intellectual and moral equivalent of the best modernist design

Matt says…

I think another plausible explanation for “ultra-realist” in this context is an acknowledgment that states sometimes engage in negative-sum games, like arms buildups or trade restrictions; that productive relationships can sometimes be fragile, especially in hindsight; and that the close entwinement of China and the US means that each has the power to hurt the other significantly. What would happen if China decided to start selling US Treasury bonds, or simply slowed its rate of purchase? Or if the US put a 10% tariff on Chinese goods in retaliation?

This is a slightly cynical and negative view of the relations between nation-states, to be sure, but it’s more a sense of “everyone could get screwed” than “the strongest shall prevail”… more Ecclesiastes than Heidegger.

(Personally, I lean more toward the Fallows perspective, but I think Ferguson gives an important caution against excessive optimism.)

It’s closest to your first option, Tim. Ferguson has a line in the dialogure that goes something like: “Of course merchants don’t wish for war or conflict. Unfortunately, merchants don’t make the strategic & political decisions.” (Except he said it much more elegantly than that.)

The best articulation of modern realism that I’ve run across is The Tragedy of Great Power Politics by Mearsheimer. It’s so insanely well-argued — and so NOT “national greatness” conservatism, so NOT mere militarism — that it’s hard to walk away w/out incorporating at least part of it into your thinking. That was my experience, in any case. I definitely don’t think it 100% describes the world, but I think it’s a useful tool — and frankly a more coherent framework than you can find almost anywhere else.

Anyway, I think that’s generally where Ferguson falls — especially the “tragedy” part of it. He’s a pessimistic liberal — that is, a liberal of the OLD sort.

Yeah, when I think of honest-to-goodness realism, I think of John Mearsheimer – who was a teacher of mine at Chicago. I think what I was trying to get at is that sometimes people who pose as “ultrarealists” in fact aren’t very realist at all.

It’s funny I came away from this favoring Ferguson – not necessarily in his comparisons to the Kaiser’s Germany – but in his assertion that Chimerica as we know it is coming to an end. That the future holds a more tense, less co-dependent relationship between what will be the world’s two superpowers. (Though I think it remains to be seen in the next few years if China does in fact shake off its bonds to the US – the real tell for Ferguson’s future.) For example, (and perhaps Mr. Mearsheimer would agree, stopping power of water and all) I found Ferguson’s argument very compelling that China’s naval rise was much more than the limited objective of Taiwan.

The most important of the cautionary notes from either Fallows or Ferguson though I thought was Fallows’ point (which he re-emphasizes in his blog post) that anything can happen. However much Ferguson’s arguments won me over, I thought Fallows’ nuanced temperances were consistently the most important points expressed here. China is not some monolithic “China”, for example. Yes, it’s unlikely we’ll see a war over Taiwan, but…? We can predict all we want about the stability of the regime, but, really, who knows?

Thanks for pointing us to this, Robin. Really enjoyable to watch.

“Of course merchants don’t wish for war or conflict. Unfortunately, merchants don’t make the strategic & political decisions.”

As a general statement this seems patently falsifiable in certain important cases which happen to be both highly influential and highly successful.

Not that that’s necessarily relevant here.

Peter says…

Hear hear!

Peter says…

Oh boy, another tangential rant!

We own half the world, oh say can you see

And the name for our profits is de-mo-cra-cy

So, like it or not, you will have to be free

— Phil Ochs, c1966

Right! I mean, it all depends on what you’re selling – and what the relationship is between the state and the merchants.

You could say that what’s more important and more general than the strategic decisions of the state are the ways that monopolies or oligopolies on violence are exercised. State actors exercising their power would just be a special case of this. And of course states can always lease their monopolies on violence to other folks – colonists, militias, security agencies – or have it stolen from them – rebel groups, organized crime, de facto states, all of which usually have an economic as well as a political substrate.

@Saheli, @Peter and @Tim: Interesting point… I’m struggling w/ how best to think about this. Because yes, on one hand, war (or at least prep for war) is a big business. On the other hand, I do think Ferguson is right: rational merchants prefer a peaceful, trading world to a warring, locked-down world. Even (especially?) arms merchants? They want to sell their stuff to everybody!

But how do we use this insight to evaluate Ferguson’s & Fallows’ claims?

Fallows says: The commercial and cultural bonds between these countries are wide and deep. Linkages exist on all these levels. Don’t bet on a sudden separation. Ferguson says: If commercial and cultural links were the key factor, then Germany wouldn’t have made war on England. Merchants aren’t thinking about long-term resource strategy and geopolitics.

So, okay, yes, there are always some merchants who profit from war. But what does that tell us about the Chimerica relationship (if anything)? Most of the bonds of trade between the U.S. and China are of the non-military variety.

Let me put it this way: merchants don’t want peace, buyers do. Buyers want to be able to buy from as many sellers as possible, because that increases quality and decreases price. And merchants/sellers want buyers. So merchants usually want peace. But it’s a conditional good, twice over, not an essential one.

Let’s scale it from min to max.

1) Merchants want to sell their goods;

2) Merchants want to sell their goods to everybody;

3) Merchants want to sell their goods to everybody and be the only wholesale buyer and only retail seller of those goods.

So, most of the time, it’s #2. It’s the terminal logic of #3 that drives hard/soft mercantilism, colonialism, organized crime, and other kinds of violence in the name of capitalism. And sometimes, just #1 is enough.

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