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Sunday, August 7, 2011

8/7/2011 - The birth of the Super-State : Economy, Society and Shifting Influence in the Modern World

The birth of the Super-State : Economy, Society and Shifting Influence in the Modern World

What makes for a stable society with a stable future ? Some may answer that question with values : a group of individuals who adhere to a set group of rules have a chance of following a stable growth trend and are more able to face dangers of anything exterior to their group. Others may say adaptability : a group of individuals who can change their core beliefs during a time period to survive. Some people will add economics and politics into the equation as variables ; abstract notions that help the group evolve. These two concepts ( which are just a few out of many) are almost impossible to define, given the different models and possibilities that exist, but for the purpose of this thread, let's give it a go...

Politics is what transforms a country in to a state. 'Country' is a geography term used to define the borders of a territory inhabited by a number of people. When rules are set in place by a group inside of a society, rules which everyone must follow, the country becomes a state, or the reunion of three elements : land, a population, and a political machine that governs the populace. That's obviously just a personal definition, and hundreds/thousands of others are certainly more qualified to give a more detailed, in-depth one. But a stable society needs politics, or a group of leaders, to survive... doesn't it ?

The other notion I mentioned is economics. Or to be more general, an economy. Wikipedia states ( yes, I'm quoting wikipedia  ! ) that an economy '' consists of the economic system of a country or other area, the labor, capital and land resources, and the economic agents that socially participate in the production, exchange, distribution, and consumption of goods and services of that area. A given economy is the end result of a process that involves its technological evolution, history and social organization, as well as its geography, natural resource endowment, and ecology, as main factors. These factors give context, content, and set the conditions and parameters in which an economy functions ''. Some of the key points of that short definition that effect an economy would therefore be labor, capital, consumption of goods and services etc... Would a stable society need a specific economic model in place to function properly ? Would the regulation of imports and exports be different, say, in a society of 1000 people, compared to a society comprising many millions of inhabitants ?

This very strange introduction has a point : what makes a stable society ? And what factors can make one society better than the other ? Is a capitalist society better than a communist one ? Is a religious society better than a non-religious society ? Do political leaders have the right to forbid the practice of religion ? Do they have the right to force a population to believe in a certain religion ? Can a society with a majority of powerless poor people and a minority of rich powerful people thrive above other societies ? So you see, many things to think about there...

The main points of this thread will focus on economics, policies of the 20th century and birth of new areas of influence.

The 20th century and the Cold War

The title of this thread is about the birth of the super state. So let's talk about how the 20th century has transformed society, leading to the apparition of States with large influence over others. This is just a quick overview, and is mostly based on my personal opinion ( criticism is welcomed of course ! )

Before the world wars, the states of the world were slowly developing ; in the western world, the industrial revolution at the turn of the 20th century aided the economy and changed everyday life with various innovations, technological or otherwise. After industrialized nations overcame the shock and loss of manpower after the second world war, the reconstruction efforts across Europe and other devastated countries further encouraged the economy, and society entered a period of prosperity. But if we steer away from certain economic aspects, society was divided : the west's economic policies conflicted with the east's communist/socialist ones, and politics would, from 1945-onwards, change the core of society. Even after the fall of the Nazi regime, the western world would simply observe the evolution of another authoritarian regime : the Soviet Union. Yes, there was heightened tension throughout the cold war period, leading to some famous conflicts between the East and West :

The following articles are extracts from here ! 
  1. The Korean War

    Following World War II, the United States and the Soviet Union agreed in 1945 to divide Korea into U.S. and Soviet occupation zones, with the U.S. staying south of the thirty-eighth Parallel. Tension began to mount in early 1950 following the failure of efforts to unite the country. In 1947 the U.S. submitted the Korean question to the U.N. General Assembly for disposition, but Russia refused to go along. South Korea held elections anyway in May 1948 under U.N. supervision, while the Russians set up a puppet government in the north. On June 25, 1950, North Korean troops crossed the thirty-eighth parallel in force. Within hours of the attack, the United States responded.

  2. Vietnam War

    The Vietnam War began in 1957, and was divided into Communist ruled North Vietnam and non-Communist South Vietnam. The North Vietnamese and some of their South Vietnamese supporters fought to take over South Vietnam. […] Opposition to the war began to mount in America. Increased casualties and taxes produced a large drop of support for the war. The Tet offensive also had a major impact. This new phase of the war began on Jan. 30, 1968 wh cities of South Vietnam. This caused Johnson to call for peace negotiations. In March 1972, North Vietnam began a major invasion of South Vietnam. […] The war ended on April 39, 1975 when South Vietnam surrendered.

  3. Cuban Missile Crisis

    On October 22, 1962, Kennedy announced to the public that the Soviet Union had placed nuclear missles (sic) in Cuba, close to 90 miles from the American coast. […] on October 28, 1962 Khrushchev announced that the missles were placed on Cuba for offensive reasons and that now the construction of the sites had stopped. World War III had been averted.

These are just a few of the conflicts ( for example, there was also the Bay of Pigs incident). Political differences ensured that tension would continue throughout the second half of the 20th century between eastern and western states. After the collapse of the Soviet Union in 1991, a new society was being sculpted : The West had thriving capitalist economies, sometimes hindered in growth by a few events such as the oil crisis of 1972 for example, whilst the East was, to be blunt, a group of a politically and economically fractured States adjusting to new capitalist economic policies. Even if major catastrophes were averted during the cold war period, some events and their importance can't be denied : the birth of the People's Republic of China, the allies of the West and the East that withstand today ( for example, the diplomatic relationship between States such as the US and Great Britain, or China and North Korea). Traces of State communism can still be found today, as Vietnam, the People's Republic of China, North Korea, Cuba and Laos are still communist states. Other traces of the Cold War can be found when looking at the legal texts of international law that bind the States of modern society : trade agreements and diplomatic policies were obviously signed between Western allies during the cold war, whilst other treaties were signed exclusively between the socialist republics of the East, mostly concerning mutual economic aid to help in the growth of these communist economies that were destined to fail by 1991.

So why all this ranting about the cold war and communism ? Well, I think we can all agree that the symbol of capitalism is the US, and that the symbol of modern day communism is the People's Republic of China (PRC). If the PRC is a communist society, does that make it inferior to American society ? China is growing at an exponential rate, and can rely on its resources and manpower as its economy continues to grow. Does the PRC follow the principles of democracy ? If not, how can one explain the PRC's rapid growth compared to other States ?

American Influence : A new economic form

The collapse of the USSR ensured the survival of capitalism, and in some cases made the USA a father-figure of the newly-capitalist economies of the East post-1991. Throughout the years, America has ensured that its influence is as widespread as possible... and isn't afraid to show its power. But an interesting way to look at the USA's influence on global trends is through money : how did and how does America manage to mesmerize others with its culture ? And generally speaking, how can a society be more recognized than others ?

Influence is, in its own, an economic form. Ok, that doesn't make that much sense, so let me explain. If you have a product that you want to sell, how do you go about selling it ? People need to know about your product : what do you do ? You spend money. In a world where money talks, it's impossible to spread the word about a certain product ( if we continue with the preceding example of a product) unless you have money. Yep, advertising costs money. So how about applying this thinking to a more abstract notion, such as influence ? How do political leaders gain a following ? By investing capital in campaigning and outsourcing. Hiring people, making flyers, posters, organizing debates, speeches, hiring venues etc... Influence is a direct result of financial investment.

With the economic crisis of 2008, and the recent problems concerning the debt ceiling talks in the US, everyone is worried. Here is an article from from the 4th of August : '' With debt ceiling talks continuing and President Obama insisting on a long-term solution, the US is just three weeks away from a financial collapse. International investors such as the Chinese and rating agencies are already concerned, so what happens if Washington doesn’t raise the debt limit? ''.

The US economy, being as big as it is, has repercussions throughout the world : if something bad happens in America, European and other economies take the hit also. It also works the other way around : if the US economy prospers, this has beneficial effects on other economic systems in the world. But the sad truth is that the American economy is slowly stagnating and falling in to a dark pit that has no end. European States are also crippled with debt, just look at Greece or Portugal, and now possibly Italy is to follow. The dollar is failing the US system, and the Eurozone is slowly collapsing on itself, sending shock waves through Europe and other countries.

The bottom line is that without money, a product stays in storage and will never sell. With no money, a economic system will fail. With no money, a country's influence stagnates.

North / South divide slowly crumbling

As the countries mentioned before try and solve their financial woes, other states are slowly mutating into economic and political hubs, and are gaining in influence.

For example, the below map shows countries by nominal GDP (PPP) per capita in 2008, IMF estimates as of April 2009. GDP means Gross domestic product (GDP), which refers to the market value of all final goods and services produced in a country in a given period. GDP per capita is often considered an indicator of a country's standard of living. So the higher the GDP, the higher the standard of living :

As you can see, the US sticks out like a sore thumb ; in this case, the sore thumb is indicative of a very high standard of living. Although this map charts the GDP situation per country in 2009, today's situation is most probably still the same. Europe is also showing large GDP, the same for Japan and Australia. But if we look closely at the map, one very small country has the GDP as the US : the United Arab Emirates. One example is Dubai : the two following articles date back to December 2011.


Dubai’s economy is expected to rebound with a four per cent growth in 2011, largely driven by significant buoyancy in trade, logistics, tourism and services sectors, Standard Chartered bank said on Sunday. This vital turnaround for Dubai, after a growth of between 1.5 and two per cent in 2010, comes as the emirates real estate sector braces for bottoming out by end 2011 before gaining stability in 2012, the bank forecasted. […] “We expect Dubai’s services and trade sectors to drive growth by four per cent in 2011, while infrastructure plans in Abu Dhabi will boost the construction and services sector,” he said. Shaher said given Dubai’s role as the world’s third-largest re-export centre as trade activity makes up 40 per cent of the emirate’s gross domestic product, global trade trends would be important.


Dubai's economy is expected to grow 3-3.5 per cent in 2011, while inflation should remain below 4 per cent, a government official said on Wednesday. […] Last week, the UAE economy minister Sultan bin Saeed Al-Mansouri said the UAE's gross domestic product was expected to grow between 3 per cent and 3.5 per cent in 2011. The GDP is expected to reach 1 trillion dirhams ($272.3 billion) in 2010, the minister added.

Now, Dubai is just a city, and not a State ; obviously the GDP of the US outweighs the GDP of the United Arab Emirates by quite a lot ! But the UAE, that was highly dependent on oil exports and natural resources has a more diversified economy, which relies now mostly on tourism and real estate ( although natural resources do still play an important role). The UAE is changing rapidly, and who knows, maybe revenue from tourism and other sectors will outweigh the profits generated solely by exports of natural resources ? Another question is, how will this new found influence spread ? Will surrounding countries benefit from the riches of a city that is isolated financially compared to the GDP of its neighbouring countries ?

Here's another map showing nominal GDP ( '' A gross domestic product (GDP) figure that has not been adjusted for inflation '') :

Although the map key is missing, it's safe to assume that the darker colours indicate higher GDP. Compared to the earlier map, this one doesn't take into account inflation : as you can see, a lot of other countries are on the same footing as the US and many European countries, like India, the PRC, Russia and Brazil.

Concerning the North / South divide, more and more southern countries are contributing to and benefiting from world's economy : From wikipedia, '' As of early 2007, South America is experiencing great economic development, with Venezuela, Colombia, Argentina, Uruguay and Peru growing their economies by over 8% per annum. Brazil's economy, on the other hand, is expected to grow by a more sluggish pace during the year. South America relies heavily on the exporting of goods. On an exchange rate basis Brazil (the seventh largest economy in the world and the second largest in the Americas) leads the way in total amount of exports at $137.8 billion dollars followed by Chile at $58.12 billion and Argentina with $46.46 billion ''.

Emerging Super-States : The People's Republic of China and India

China is the most populous state in the world with 1,370,536,875 inhabitants ( Source ) and India is second with 1,210,193,422 inhabitants ( Source ). The two most populous states are both in Asia, an area where poverty is very slowly being replaced by a society mutating because of technological advances and innovation. ( To see how the number of inhabitants are predicted to be like in the future, click here )

After the Cold War, only the United States appeared to fulfill the criteria to be considered a world superpower, although some scholars no longer consider it to be one. The term second superpower has also been applied by scholars to the possibility that China will emerge as second superpower on par with the United States. Also, Brazil, the European Union, India, and Russia are also thought to have the potential of achieving superpower status within the 21st century.
Source ).

Concerning the force of the PRC's army, journalist Malcolm Moore states that '' For now, Beijing wields enough power to keep the US in check in the Pacific and to discourage Taiwan from relying too heavily on American support. In the future, the Pentagon believes that the PLA could extend further into the Pacific, using its fleet to control shipping lines and oil concessions. The “pace and scale” of the PLA’s modernization has been “broad and sweeping”, the Pentagon said. But, for now, China’s modern army “remains untested” ''.

Posted on January the 16th of this year, the '' Top 10 Most Powerful Countries in 2011 '' lists the PRC's in second place : '' 2. China is rapidly emerging as the next global superpower, now boasting the world’s largest manufacturing sector and (arguably) the biggest economy in terms of real GDP. Furthermore, they have calculatedly taken a lead in many of the world’s most prospective and hi-tech sectors, e.g. renewable energy, hi-speed railways and supercomputers. ''

Another country that is growing is India : '' The two hands to produce count for more than that one mouth to feed, after all. Driven by a sterling demographic dividend, continuing structural reform and globalisation, India is poised to accelerate its growth rate to 9-9.5% over 2013-15, even as China will cool down to a more sedate 9% by 2012 and to 8% by 2015. '' ( Source ). Since 1991, India's GDP rate has grown at a fast rate :

2002 : 4.3
2003 : 8.3
2004 : 6.2
2005 : 8.4
2006 : 9.2
2007 : 9
2008 : 7.4
2009 : 7.4
2010 : 10.4

For graphical representation, click here )

India is also part of the BRIC, a grouping acronym that refers to the countries of Brazil, Russia, India and China, which are all deemed to be at a similar stage of newly advanced economic development. It is typically rendered as "the BRICs" or "the BRIC countries" or alternatively as the "Big Four".

That's it folks ! Hope you enjoyed this thread, and I hope It made you think a bit about just how much the world we live in is changing ! To finish of this thread, here's a recent article from the dailymail :

Dailymail Article

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