Sunday, September 5, 2021

How to Overthrow a Superpower?

If China intends to usurp America’s position of superpower, then it will not use military means. The cost of militarily defeating America will be too high and no nation, which is ruled by wise leaders, will attempt to precipitate a war with America. The world is not in a mood to fight a great war (though things might change in the future if the American side becomes weaker). There are non-military ways of forcing the American order (Pax Americana) to fade out of the world.

While America possesses considerable military strength, it is not a military power. Its key strengths are economic, technological, diplomatic, and bureaucratic. The four instruments through which America exercises power over other nations are: (1) The dollar which is the default currency in international transactions; (2) the financial markets; (3) the American patent system; (4) the geopolitical bureaucratic institutions—the UN, the World Bank, the IMF, the WEF, and the WTO.

Through its control of the dollar and the bonds and securities markets, America has the power to meddle in the financial sector of most countries. Since the dollar is not pegged to gold, America is in a position to raise any amount of debt. Other countries are forced to pick up American debt and allow American inflation to percolate into their economy because they need access to dollars and the financial markets. America’s most lucrative export is the dollar.

The patent system was established to protect intellectual property in case the invention was novel, non-obvious, and useful. But after 1990, the patent system was corrupted to serve the interests of the American multinationals. These multinational companies have filed a massive number of dubious patents which give them a stranglehold over most sectors. The world’s digital industry is now dominated by oligarchs who have cornered the important patents.

The geopolitical bureaucratic institutions were founded by America and its allies to preserve a world order which would offer them a distinct advantage. Occasionally, it might seem that the UN is not passing resolutions which safeguard the geopolitical interests of America and its allies, and the institutions such as the World Bank, IMF, WEF, and WTO are not doing enough to safeguard their trading interests, but the actions of these institutions are generally aimed at empowering Pax Americana.

If these four instruments are compromised, America will lose its economic, technological, diplomatic, and bureaucratic power, and will not be in a position to dominate the world. 

China has made some solid gains in these four areas in the last 15 years. If China can convince a significant number of nations to use another currency for their International transactions, if it can take control of the global financial markets, if it can provide patents which will counter the power of American patents, and if it can provide a new global bureaucratic system, then American power will decline and Pax Americana will become irrelevant.

The transition from Pax Americana to another geopolitical system (which might be led by China and its allies) during the next 20 to 30 years will be largely bloodless. A few minor military engagements cannot be ruled out, but these will not impact the global balance of power. The important contests for world dominance are right now happening in the economic, technological, bureaucratic, and diplomatic areas.

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