July 25, 2005


I have, on this blog and forums I have visited over the last couple of years, warned of the impending decline of the American economy. Of course, my theories and warnings were met with dissent from those who practice the belief in American cultural and economic supremacy. Others simply have a hard time digesting negative reality and stick their heads in the sand in the hope that if they can’t see reality, reality can’t see them.

The most common dissent from detractors, to my proposition on economics, is that it is invalid to assume a “Zero sum” in economics. For those who may not know, zero sums in the context of economics, is when one or more entities cannot experience a gain unless one or more entities experience a correlated loss. The opposite of "zero sum" in economics is the theory or belief of infinite wealth for all, meaning that simultaneously, it is possible for everyone to hold tremendous wealth.

I have never argued that an absolute zero sum exists in economics. What I have argued is that the economics of a planet of over 6 billion people is much closer to the extreme of absolute zero sum, than it is the opposite extreme of infinite wealth and opportunity. One thing that discredits the infinite wealth theory, in practice, is our dependence on finite resources to generate real wealth. There is finite supply of “prime” real estate or productive land and there is a finite and depleting supply of oil reserves, which fuels all modern economies. Meanwhile, the earth’s human population continues to grow, increasing demand for finite wealth producing assets and resources, while supplies remain stagnant or decrease. It does not take a mathematician to figure out the consequence of supply not keeping pace with demand.

On another note, there are many people, primarily black conservatives, who talk about the decline of “black America” as if black America is a vessel that sails in the global sea independent of white America. The fact that black people decks are flooded more than others is not an indication of black failures, because we are not navigating the running the ship. The water flooding the lower deck is not an indication of the navigational failures or faulty construction of black people, but rather, white America. You see, black people are aboard the vessel America and as the vessel sinks, the groups disproportionately on the lower deck will get the most water. This is what is happening in America and hence what appears to be black failures is really an indication of much greater failure of the navigation and structural integrity of the vessel America, run by white America.

The truth of the matter is that while America is feeling good about itself by juxtaposing itself with other Americans and the relative problems they have, many other nations are starting to surpass America in future economic indicators like educational attainment and so forth. Asia is experiencing a renaissance that is promoting its rise and Americas fall. The rise of China and India and its resultant effect on America should be a glaring indicator that yes….economics is much closer to zero sum than people want to believe. If it was not true, the rise of China, India or any other previously undeveloped nation should have no negative consequence upon any other countries, but it does.

I won’t go on further, but will provide this link to a FORTUNE magazine recent article concerning America’s economic future.


We’re not building human capital the way we used to. Our primary and secondary schools are falling behind the rest of the world’s. Our universities are still excellent, but the foreign students who come to them are increasingly taking their educations back home. As other nations multiply their science and engineering graduates—building the foundation for economic progress—ours are declining, in part because those fields are seen as nerdish and simply uncool. And our culture prizes cool.

Many iconic U.S. firms—Coca-Cola, Procter & Gamble, Texas Instruments—already do most of their business and employ most of their workers outside the U.S. Conversely, some of the most American brands you can think of—Hellmann’s mayonnaise, Jeeps, BV California wines—are owned by non-U.S. companies (Unilever, DaimlerChrysler, and Diageo, respectively). To complicate matters further, many products of U.S. companies are made outside the U.S.—Maytag refrigerators are no longer made in Galesburg, Ill., but in Mexico—while many non-U.S. companies make products here—your new Toyota may have come from Kentucky. Now add a few more twists: Your Dell laptop may have been assembled in Malaysia from parts made by American companies in Thailand.

All those university graduates in China and India threaten U.S. living standards in another way. Paradoxically, it’s not because they’ll end up working for U.S. employers, but because some of them won’t, finding jobs instead with domestic companies in their own countries. That’s a problem for America if many of those graduates are top students in science and engineering.

For the U.S. the loss of technology leadership could be historic. Without that advantage, there would be little to prevent living standards in the world’s interconnected economies from equilibrating. The rest of the world’s living standards would rise, and—at least in the near term—America’s would decline.


At 12:05 PM, Blogger bombsoverbaghdad said...

I couldn't agree more. I read that Fortune article, and though written from the perspective of the paranoid white male, is on point with regard to the poor STATE OF education in the US. The fact of that matter is that the masses of children and teens in the US are not being properly education, especially in the math and science fields. In the workplace, America is trying to replace its poorly educated citizens with foreigners. Less-than-rich Americans should be up in arms, but they (we) are asleep at the switch.

At 12:44 PM, Blogger Noah TA said...

Given the aversion of certain educational pursuit by Americans...do you think that those who do try to excell will be ostracized for "Acting Asian". LOL. BLacks educational lagging is often linked to this myth of fearing "acting white". So what fear is keeping white Americans from competing on par with Asians globally? Is it the fear of "acting asian"?

At 1:58 PM, Blogger Constructive Feedback said...

You are amazing Noah.

I have thoroughly addressed your claims of "Zero Sum". I told you previously that Zero Sum is only applicable when the "entire pie" of a given market has been defined and developed. In the context of this world - IT HASN'T reached this point.

Interestingly enough though you talk about the imperialism of the United States you actually cowar in the knowledge that your lifestyle as you know it will sink if America does as well. Despite your "Africa-talk" I hear little mention from you about seeking to actively develop this as a safe landing for the American Black in the wake of America's economic collapse.

Maybe instead of a collapse it will be a closing of the gap between America and the rest of the world. Dispite your fears about China, as I recall China' GDP is only 11% the USA's rate. They have a long way to go. They have tremendous unemployment. As peasants come from the interior lands to the coasts looking for employment their challenges will multiply.

On another note, there are many people, primarily black conservatives, who talk about the decline of “black America” as if black America is a vessel that sails in the global sea independent of white America.

If BC's talk about the "decline of Black America" it is reserved for the SOCIAL AND CULTURAL elements.

In truth THE PROGRESSIVES have been the loudest criers. When this country expereinced a technology boom those suffering from the ailment of CONDITIONED HOPELESSNESS coined the term "the digital divide".

A few weeks ago I posted the story about innovators in the country of India who are creating a $100 PC to allow the poor in their country to have access to a computer. You heard no such innovation from the usual suspects in the USA.

Let us be certain - the fate of the USA versus the fate of Black people in America are two correlated by SEPERATE concepts.

I call for more local economic development so that if relocation is necessary due to unforseen events these PROCESSES can be executed regardless of the land that you now reside - as I told you was the case in ChinaTown in Oakland CA.

At 2:14 PM, Blogger Noah TA said...

Finite Energy resources Renaldo, negates your theory Renaldo. Economies ARE dependant upon FINITE supplies of oil to fuel their economies. Thus, economic growth and hence wealth and hence the PIE is constrained by ENERGY prerequisites. If the prerequisite is FINITE, in practice, if not theory, then the allocation of finite energy supplies will determine which economies can grow. It is true that as long as supply can meet demand that zero sum does not manifest. However, the hyper consumption of capitalism has resulted in the depletion or allocation of resources faster than they can be replenished naturally or viable substitutes found.

Again, please explain to me how the USA economy is threatened by the growth of China and India’s economies if not for zero sum dynamics at play here.

At 4:48 PM, Blogger Constructive Feedback said...

What you call 'finite' energy is not the case. You are basing your claim on what we know today. I am sure that back in the day you would have believed that the Earth was flat.

With the growning expense of oil other alternatives will become more palatable. Today we could build a nuclear power plant who's function is to seperate hydrogen atoms from water.

Secondly just as you know not the concept of VALUE you fail to understand the concept of MARKETS.
The United States is by far the largest consumer MARKET in the world. With China supplying an increasing amount of our demands this is putting pressure on US production.

As more MARKETS are created around the world then this will mean more people able to afford and DEMANDING certain goods that are a part of their STANDARD OF LIVING that has increased.

The world's MARKETS have plenty of expansion. The USA is about 1% of the world's population yet produces 25% of the world's GDP. With the growth of these other nations we will see a net growth in the size of the WORLD'S MARKET. This is good news for the WORLD's POPULATION regardless of the impact on the USA diminished role as economic superpower.

At 8:58 PM, Blogger Noah TA said...

Am I basing my case on what we know today? Yes. Are you basing your case on conjecture and something unproven today? Yes. Which is more credible, the known or the unknown? Application or theory?

Your argument is so weak that you have to use a logical fallacy to attempt to make point. You want to suggest that because people once thought that the earth was flat and was wrong means that everything that we think we know today should therefore be just as suspect. A bank robber wore a hat. The next day a guy walks in the bank with a hat and hence he is likely a bank robber. That is tantamount to your use of people thinking the earth was flat. It has absolutely nothing today with what people think about the fate of Energy.

I don’t know what you said after that last point…and I don’t think that you do either. Anyway, you have not answered how it is that the growth of employment in China and India and their lower wage rates affect wage rates and employment in the USA negatively? Why are certain industries in America losing out to the growth of these same industries in other nations? If there was no zero sum, none of this would be happening.

At 5:55 AM, Blogger Dell Gines said...

You are making an incorrect analysis. Economics is not based upon finite resources. The undergirding premise of economics is productivity. 'Finite' resources enable productive, but the presumption that finite resources will never give way to a theoretical infinite resource (IE solar power) is not necessarily correct. Economics is about the unit of production per unit of time.

As countries become more productive, the become wealthier. The reason many countries are not productive is because of inefficient, or corrupt government policies that hinder free market growth. Many of these, particularly in Africa, were set in tale spins through white supremacy, and other gestappo European tactics.

America as a whole is wealthier today than 40 years ago, because of the ability to be more productive. Productivity is driven by human capital, of which many blacks lack in relation to whites on a per capita basis (I say by design).

So to look at your 'finite' resource lets analyze one gallon of gas. Gas is finite, however it is possible to develop technology that makes the use of one gallon of gas more 'productive', therefore while there is sufficient gas to power economic growth, and we are more productive, we will become wealthier.

In addition, as mentioned above, the potential is their to switch to substitute 'finite' and potentially 'infinite' sources of fuel. IE nuclear and solar. So your theory is flawed based upon the faulty assumption that their won't be switch to alternative fuels of both finite and infinite sources.

Let's look at real estate (although over population must eventually occur unless we go off world). One unti of land today is much more productive than it was 100 years ago. In addition, as market forces work in a theoretical ideal, each unit of land would be utilized to its maximum level of efficiency.

However you are correct in that infinite wealth is a theoretical scenario. The appropriate structures have to be in place to govern the wealt producing markets. When you have a system, such as the US that, through white supremacy, has skewed the market in its favor (even though it has cost them wealth) then you can easily see if wealth is the process of human capital and economic capital, why blacks are behind.

At 8:38 AM, Blogger Noah TA said...

All movement in life is dependant upon an energy source and supply. For your life to manifest it requires caloric energy to sustain itself. If you decide to expend more muscular energy by running or jumping you will need to increase your caloric intake to fuel the desired movements, lest your body begins to feed off itself to fuel the activity.

Economics is no different. It is a life activity predicated on the action verbs of consumption and production, both of which necessitate energy expenditure to manifest. If consumption and production are to grow, so must the input of energy to fuel it. Whatever your working definition of economics is does not really matter or change the fact that it requires energy to bring to fruition.

Again, it is irresponsible to count your money before it’s in the bank. It’s irresponsible to go out and make a major purchase on the assumption or belief that you are eventually going to get a good paying job. By the same token it is irresponsible to deplete the finite supply of the energy source you are dependent upon based upon the belief or confidence that you will come up with another, just as feasible, when it runs out.

The question is simply not can humanity develop an alternative source, the question is can it be developed “seamlessly” allowing a smooth transition. The answer to that I believe is NO. The interim will be catastrophic for global economies. Besides, as with any addiction, one generally has to “hit bottom” before they change their ways.

Wars are simply part of human nature and economics and the allocation and control of scarce will be the major trigger for the next major world war.

In regards to unit of land being more productive...thats not the point. The point is only one entity can hold ownership of the land at once. If the land is the conduit to the wealth and the few own most of the land then the many can never gain the wealth from the land because it is in the posession of the few....with no NEW or prime land being added to the pie

At 12:18 PM, Blogger kiesha said...

What an interesting blog, comments included.

At 8:06 AM, Blogger Faheem said...

One of the things that is constantly over looked is America’s growth and productivity did not occur in or under this new Global economy. In an effort to attaint wealth for as cheap as it can be attained, the U.S. has constructed laws and treaties that allow businesses to be rewarded for moving their business out of Country. While it may be difficult to see the end result of this, we can see small manifestations of what it will be like in the long run. With major companies laying off workers in the thousands because they have moved their business overseas or across the boarder for cheaper labor, we see a rise in the GDP of those nations and in their standard of living. Subsequently, the opposite is happening in America, jobs are being lost, once middle class families have fallen out of the middle class. The U.S. is basically sponsoring its on decline by way of capital building industries moving jobs off shore to increase their bottom lines. As an IT professional I can bare witness to this phenomena by way of unemployed and under employed IT professionals I worked with in the past.

Try telling a man who has went from 60k a year to 35k a year things are getting better. The irony is that his job that once paid him 60k is now being done in India for 35k but of course the standard of living in India is far lower than here in America and 35k in India can go pretty far in comparison to here in America. America is actively participating in its fall, of which I don’t particularly have a problem with; my only concern is the diversionary tactics of blaming the fall of America on cultural and moral failings of the populace when it can be proven that with the exporting of jobs comes crime and all other forms of behavior driven mostly by Poverty. A great example of this was properly presented in Michaels Moore documentary Roger and Me where we witness a middle class flint Michigan go from that to the murder capital; did it happen because of moral failings and cultural deprivation, NO! It came to be only after jobs were lost and the people became desperate. The contemporary attacks on Mexican men and women coming in to this country and doing jobs for cheaper is another example of the kind of rage that is fostered by the loss of jobs. There are no minute men on the borders if there was no job loss.

At 11:02 AM, Blogger NmagiNATE said...


One thing I know that's overlooked is how the American economy and lifestyle has more or less required American families to be TWO-INCOME families. That didn't seem to be the case some 40 some odd years ago.

Then, one income became hardly enough. Now, TWO INCOMES for a lot of people barely allows them to get by.

There is something to be said for a country that DOESN'T prepare it's people for large economic structural changes...

Let the BLIND Patriots continue to sing as the ship goes down.


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