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Monday, 11 July 2011

Final Days?

The Last Economic Superpower:
The Retreat of Globalization, The End of American Dominance,
and What We Can Do About It

Joseph P. Quinlan (McGraw-Hill, 2010)

To attempt to explain the current global financial situation in 250 pages would be an impossible feat. There are just far too many factors, each requiring a thousand pages of cross-referenced footnotes. Yet in The Last Economic Superpower: The Retreat of Globalization, The End of American Dominance, And What We Can Do About It, author Joseph P. Quinlan not only gives it a shot, but also throws in a history of how we came to be where we are now, and how to ride out the waves into the future.

The sheer magnitude of material and knowledge needed to aptly encompass all this, would require a year-long college course at least, so it should come as no surprise that Quinlan’s account comes often across as rudimentary at best, and seemingly naive at worst.

But I’m sure he knew when he undertook the monumental task, that result would be inevitable to a certain degree. The reader must understand at the onset that the author (if for no other reasons than to satisfy his publisher and save a few forests) had to do a lot of skimming and generalizing in order to make his ultimate point in a reasonable amount of space.

So with that grain of salt taken, does Quinlan manage to encapsulate the general concept of the world’s financial state? Mostly. It’s a valiant effort and he is academically and professionally qualified to assert his opinions. He teaches at New York and Fordham Universities, and is Managing Director for US Trust, Bank of America Private Wealth Management.

However, I’m not so certain that such credits, or any credits, qualify an individual to accurately predict the financial future. Not just Quinlan, but the term “financial forecaster” seems almost oxymoronic in that those who know capitalism and economics inside out are often plagued with tunnel vision so myopic that they are unable to fathom the human aspects that constantly throw wrenches into their logical machines. 

Not just human compassion, but the other end of the spectrum as well: human greed and manipulation of any processes that are enacted. A healthy dose of chaos theory needs to be calculated into the mix before any conclusions can be reasonably arrived at. Not only do unpredictable human elements need to be predicted, but human needs, other than money, need to be taken into consideration as well.

If one tackles the issue from the perspective that America cannot be a successful nation without dominating the world, and that the very word “success” is considered synonymous with monetary wealth and dominance, then your results can not be anything other than skewed. That myth of Western thinking is a hindrance rather than a help to the personal happiness of its citizens, at least when looking forward. With all that in mind, if a couple of centuries of professional economic forecasting has led us to the fragile state of today, then why would we place any credence in the advice of contemporary prognosticators and strategists?

But I digress. Given all that, including my own aversions and suspicions, The Last Economic Superpower does manage to be an interesting and informative read, offering insight, at least, into how we arrived at our current place economic situation, domestically and throughout the continents.

Quinlan talks about the “golden era” of the fifties and sixties when Detroit was the envy of the world, before OPEC flexed its substantial muscle. The rise of European and Asian countries since then, up to today’s perceived threat from China and India, are all circumstances that have left America in a very unfamiliar and tenuous position. He also wisely looks south toward Venezuela and the rising concerns from that direction as well. All of this is true, of course, but any plans that are embarked upon to negate these threats simply cannot come to fruition. Not in the twenty-first century. The rules have simply changed.

The suggestion by Quinlan that America, and everyone else, strives instead for cooperation for the global good, is likely the best that can be done – but with the assumption that everyone else will be planning a cut-throat self-interest maneuver while smiling and shaking your hand. Such is the nature of capitalism. Such is the nature of man.

If it isn’t too fatalistic, I would suggest America comes to terms with the fact that it is no longer king of the castle. It’s someone else’s turn to lead the parade now. China, India and Venezuela will not be bullied back into the shadows now that they have had a moment in the sun. America’s challenge is not how to keep them down, but how to work with them as the power structure shifts. The prudent way for America to seek the most economically (and politically) stable future for its citizens is to move with the shift, rather than push against it, and that will require an entirely new mindset. Whether or not that is possible remains to be seen, and it will certainly involve some severe growing pains, but once it’s understood that no alternate plan is feasible, maybe it is possible.

I must admit I was surprised and impressed that Quinlan argued in favour of being reasonable and accepting of change for a brighter future. He also lays out his book in a concise, fluent and organized fashion, making it easier for the reader to comprehend the enormity and complexity of the issues and challenges he discusses.

I don’t think I would go as far as calling The Last Economic Superpower a must read, but it is a well thought-out and interesting look into our recent past, present, and near future from an economic perspective. And that makes it a worthwhile read.

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