Superfusion by Zachary Karabell

Chimerica was first coined by Niall Ferguson (one of my favorite authors). He was first to remark on the closeness of US & China’s economies. Our problem (i.e. the rest of the world’s problem) is how USA and China will deal with this. What no one seems to mention is that these countries can destroy themselves and their economies by going to war.

Before WWI, Germany’s and France’s economies where heavily integrated and it certainly did not stop them from war. Mankind has shown himself to be, at times, highly destructive, no matter what the costs. Will China’s rise in power without war? I certainly hope so.

I think that the economic rise of Asia and parts of South American is great. We in the West are rich. Yes, we have problems, and yes, we have poor. However, this has nothing to do with the economic rise of the rest of the world. We have problems in spite of our wealth. This is because it takes more than money to solve human problems.

The full title of this book is Superfusion: How China and America became One Economy and Why the World’s Prosperity Depends on It. Karabell talks about how States try to control commerce for their own benefit. America is no different. They believed passionately in free trade and open markets because in the 20th Century it has served them well. However, the very success of open markets has now undermined America’s power. Karabell talks about how America now faces a new challenge. (See page 292.)

Can America adjust to a world of greater affluence in which it is one of several important pillars? They seem unsure of how to deal with this. But the USA has muddled their way through lots of other problems. There is a quote of “Gods protects fools, drunks and the United States of America”. There are lots of debates on who said this and the exact wording, but you probably have heard of versions of this before. Another quote I like is my Winston Churchill, who said, “America always does the right thing after it exhausts all other possibilities”.

We think of America being heavily involved in the 2 WW’s. However, they did not start them; they just finished them. Yes, the Americans can be aggressive at times, but they do have a short attention span. I think that as long as China doesn’t do anything over stupid, we will get through the rise of China just fine. The Chinese can be overly sensitive and defensive, but I do not think that they are stupid.

In 1946, America ended British supremacy and the British Empire. Britain had asked USA for an interest-free loan of $5B, repayable over a 50 year period. The British were certain that their friend and ally would say yes without so much as a question. Astonishingly, the Americans said no. In the end, America loaned Britain $3.7B at 2% interest. Britain had to terminate any tariffs and duties that privileged its colonies. It had to also abide by the Bretton Woods Agreement of 1944 and make the dollar the reference point for global exchange rates rather than the English pound. (See page 302.)

Will China do this same sort of thing to America? Who knows? However, we are sometimes treated better by our enemies than our friends. See a book review at National Committee on United States and China Relations.

See and hear Zachary Karabell talk about this subject on Carnegie Council’s website. This is a long video of some 60 minutes. You can also see excerpts on YouTube. Is Chimerica coming to an end? See a blog by Niall Ferguson at Chimerica is Heading for Divorce.

On my website is how to find this book on Amazon if you care to purchase it. See Karabell. Also, this book review and other books I have reviewed are on my website at Book Reviews.

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