I really love prognosticators – honestly, I do.
Most of my personal exposure to the crystal ball comes from the yearly statements and advertisements from my provider of RESP’s (to you non-Canadians, a Registered Education Savings Plan that allows a tax-deferred account for the sole purpose of financing your child’s Frat House exploits when they go to the Ivory Tower of their choice / the one that will take them).
Of course, I know it is expensive, and that saving early and often (like voting in some jurisdictions) is the sure path to victory. But how much? Oh, please, how much?
Like latter day Delphic Oracles, the actuarial cadre declares that ceteris paribus, if the trend continues unabated, the cost of a four-year degree for your little Johnny or Sally will be the equivalent of the GDP of Slovenia – every year!
What do to?! Well, like the good sales associate says, you need to double down on the pre-authorized withdrawals, of course.
Now, all of this is based on what is, in essence, a linear path of causality. That is, the crap that you dealt with this year was three percent stinkier than last year’s manure. Now, just imagine what the olf factor of that steaming pile, amortized over 15-20 years would be?
You could increase your monthly contributions from $200 to $5000 in order to gain some piece of mind (and lose your home and other possessions in the process), but this whole strategy is predicated on one idea, that if something cost ten percent more this year, add another ten percent each and every year ad infinitum.
Well, life don’t work like that, do it?
The philosopher Bertrand Russell used to talk about the life of a turkey. For a year, each day of its life is one of relative indulgence – food, water, and care in abundance. The turkey, for 364 consecutive days, lives the Life of Reilly. Why, then, should this bird assume that Day 365 is going to be any different? But then, instead of a pail of delicious organically grown corn, Farmer Brown shows up wielding a very shiny – and very sharp – axe.
Oops.
Much of the talk about China seems to follow this same trajectory – ever upward, unfailing and unblinking. By a certain proscribed date, we will all live in the shadow of the dragon. Oooohhh. Sends shivers up the spine!
Hu Jintao’s recent visit to Washington, and all of the trees that gave their lives in order to allow commentators to expound their theories and thoughts, got me thinking about how seriously we should be taking all of this.
While former US Defence Secretary Donald Rumsfeld’s oratorio about ‘knowns’,’unknowns’ and ‘known unknowns’ stands as a classic alliteration of the phenomenon (alongside former Canadian PM Jean Chretien’s “da proof is a proof” monologue), they point to a central fact of global politics and life. In my own words, everything falls into three categories: the stuff you know, they stuff you don’t know, and the stuff that you had no idea existed to begin with.
So, what’s that got to do with China? Okay, dear friends, let’s break it way down, old school.
First, the things we know:
1. China’s got an enormous crapload of people and a government that is in a hell or a rush to get where we in the West are in a very short time;
2. China has the ability to harness domestic resources (human and natural) in a way that no one else can;
3. What China does not own herself, she have a crapload of cash to pay for it.
Now, the things that we don’t know:
1. When is China going to surpass the US?
2. What will China do with their newfound status?
3. What are China’s intentions globally?
4. Will China play by the same rules as the West, or seek the West to play by her rules?
Okay, now let’s add a little flavor to the mix with the stuff that may, or may not exist – the ‘Black Swan’ stuff:
1. Can the Communist Party hold onto power? Will there be a Tiananmen part deux?
2. Will there be a peasant revolt – over living standards, over the cost of food or fuel?
3. Will a buildup of China’s military siphon off too many resources?
4. Will China’s one-child policy alter the nation just as it becomes prima inter pares?
5. What happens when affluent Chinese want more from their government?
6. What happens if the PRC government infrastructure runs itself ragged trying to shut down every website and blog that pops up, like a ‘Whack a Mole’ game on steroids?
7. What happens when the PRC, like the West’s dealings with OPEC in 1973, finds itself beholding to resource rich countries that want more clout in the global marketplace?
8. What about social cohesion? Despite the predominance of Han Chinese, there are many ethnicities in the PRC. Even outside that, the dialects are so different that many can hardly understand what their countrymen are saying – like English to French to German.
9. What about peer competitors? India, for example, shares a border, a history of tensions, a rapid GDP growth rate and a population that will surpass China within the next 3-4 decades.
In short, the things we think will happen, or are confident in predicting, may very well define the path we take. Far too often, however, our path gets interrupted by things we either did not consider, or things we could never have predicted (like the credit crisis...hellooo?)
One human failing is to assume that everything falls into some neat little package with a bow.
While I am more of a Hayek / Von Mises guy, I acknowledge the prescience of John Maynard Keynes' observation that "In the long run, we are all dead." More true to my upbringing would be the rough-hewn bromide about opinions being like a particular orifice in that everyone has one, and they usually stink.
In the end, I think that the safe money is that, in the short- to medium term, China will grow to a degree of prominence that we will all have to sort out how the world is going to work going forward. China, too, will have to figure out its relationships – both with its international partners and with its own citizens.
The world has an interesting way of rebalancing itself. The rise of one power usually spurs the rise of a peer competitor, or a grouping, to act as a counterbalance.
If China enjoys its own ‘unipolar moment’, I suspect that the rest of the world will, by some means, make it as shortlived as that enjoyed by the United States.
That I believe, whether or not my kid’s degree ends up costing me everything – including the clothes on my back.
