Alex Mercouris and Alex Christoforou: Missing the point

Alex Mercouris and Alex Christoforou, on their platform The Duran, make some fundamental errors in their evaluation of the future options for the US. They argue that the US has nothing to fear from a reduction in their status. They also claim the `US was responsible for moving manufacturing to China and away from the US.

These are two fundamental errors: firstly, the movement of manufacturing to China was not a move away from the US. The original competition was with Japan and the US moved manufacturing to SE Asia and the Asian tigers. A secondary relocation to China was a continuation of this transfer. If US manufacturers did not move to S EAsia then Japan would both dominate the market either from Japanese production in Japan or Japanese investment in S E Asia. US manufacturing on the US mainland was not a viable option. Banning China or sanctioning China is entirely irrelevant as China is only one step in the global supply chain which would reconfigure itself without China and without relocating to the US. If the world reconfigures into two sectors then much of the supply chain will have to choose between for example in the chip market 60% of the market that is China or 40% of the market that is the West. If there is a wish to access 60% of the market then the producers will need to disinter US equipment from their factories – making US market share even smaller. Chip manufacturing requires a cycle of investment and replacement/reinvestment which requires market sales. By closing the China market to US manufacturers, the US extends the US investment cycles. No amount of US government subsidies can resolve this issue. If China achieves technical parity, with shorter market cycles, then this is sustainable indefinitely with no or little government subsidies. If the US producers require subsidies then this is not long term sustainable. If China achieves technical parity then the 40% market share is under threat giving China an overwhelming incentive to lower prices and flood markets. Anyone relying on US products will be competing against those using cheaper Chinese products.

Another fundamental error is the failure to recognise there are skeletons in the cupboards. It is US hegemony that keeps many things in the dark. Once US unipolar hegemony declines there are many matters that will come out into the open. Let us consider for example the 1.4 million German prisoners of war that were starved to death after WW2 under Western control. There will be many many more such stories that were kept hidden that will begin to see the light of day. It is the US brutal history that requires US hegemony. Without US hegemony the fall of US cultural and political dominance could be swift and dramatic.

There is no happy ending for the US empire that can be happy for anyone else.