The economy: financial versus military strength

1) Financial strength is more important than military strength.

2) Do not expect much regulation of the world's banking sector: the banking system is Anglo-American, and it is based on the dollar. Within this system the USA is a free rider. It has no interest in modifying the system, only in preserving it. ... And the Chinese will do nothing so long as the USA is the world's largest consumer market and US treasury bills retain a high rating.

3) There are three big winners from intellectual property rights (royalties and patents): the USA (53 per cent in 2002), Britain, and Japan. It is not in China's interest to respect these rights.

4) Just as numbers of soldiers and weapons are the best way to win a war, so economic strength - quantity of assets - is the best way to gain market share. The battlefield consists of industries and markets.

5) The birth of a new world order is happening through a transformation of the commercial world such as has never before been seen in the history of mankind. This is only the beginning of globalization.

6) The competitive factors for a nation are:

a) technological-industrial strength

b) substantial financial reserves (China's reserves are more than two trillion US dollars, amounting to 27 per cent of world reserves, compared to the USA's fourteen trillion of debt, 27 per cent of world external debt)

c) possession of a strong, vibrant culture

d) a capacity to send troops quickly to any corner of the world and execute military operations effectively

e) a capacity to learn from and about the world in which we live

f) existence of a certain social consensus in domestic politics

7) Of the twelve largest stock exchanges in the world, five are now in Asia, including three in China alone: the Shanghai Stock Exchange, Hong Kong Exchanges, and Shenzhen Stock Exchange. Economic strength has shifted to the East. This has already happened. There will be no chance of recovering the lead within the next hundred years.

8) Some see the new international marketplace as a battlefield, and the new world order as a return to the middle ages (Minc 1993).

9) Do not be fooled by talk of the knowledge economy and a new service sector as a superior growth strategy. If you do not have significant exports, you are not an industrial power. If you do not have an advanced technological sector, likewise. Britain is learning this lesson the hard way, basically hanging on with its financial sector.

10) If you do not have large financial reserves and know how to use them, you will not be respected as a nation. France gave only ten per cent of the amount that Germany gave to Eastern European countries immediately after the Cold War. Berlin was raised from the ashes to become a world capital in less than ten years. No one had constructed so much so fast before. Now the Chinese are doing the same thing, only faster and more successfully. (Pudong, China's financial centre, was rice fields only seventeen years ago, Chengdu-Chongqing will be the world's new industrial center.)

11) If you want people to be interested in your culture and learn your language, it is not enough to offer free language courses. Your culture must contain certain values, and you must possess knowledge which the world is seeking to acquire.

12) The process of rationalization continues with new force as new technologies are applied to production. Everything in our society is running faster. We have seen many companies disappear and merge in recent decades; that process will continue.

13) Two factors are rapidly changing our society:

a) old technologies are being displaced by new, more efficient and better-adapted technologies;

b) nationalist, Marxist-Leninist, and socialist political systems, including the Scandinavian social-democratic version, are losing ground.

14) There are two kinds of society, those which are predominantly slothful and indolent, and those that are energetic and vigorous. There are those which are self-satisfied and those which will always rise to a challenge. Know how to distinguish between them.

15) Most countries, like most people, cannot resolve their own problems. We debate about whether or not we have a duty or obligation to intervene. Since the war in Iraq the answer for the moment seems to be no ... but as atrocities continue, the question will be not so much whether we should intervene, as how.

16) In Europe, economic growth will occur in the temperate and the northern regions, especially in the Catholic enclaves where moral decay is slower, for instance Southern Germany. Southern Europe favours inactivity; it is not a good place for economic growth. Private-sector companies need the society around them to be healthy. You cannot prosper as a company in a social desert.

17) Islands and peninsulas are the greatest net exporters: Japan, Scandinavia, Taiwan, Singapore. These countries have developed disciplined and energetic cultures.

18) In the West more people are working with product maintenance, fewer with manufacture.

19) Jacques Attali (1978), and many before him, have argued that wars are a consequence of industrial competition in capitalistic society. War allows production to regain its momentum.

20) It won't be so much the big eating the small; it will be the fast eating the slow (Pepper 1999).

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