Go to your newsstand and pick up a copy of Foreign Policy magazine’s July/August 201o issue entitled “The Committee to Destroy the World.” It’s a fascinating, broad analysis of all those countries who don’t play by the rules set out by industrial powerhouses – and why they don’t. If you sweat about the failure of American pension funds, Icelandic treasury bills, or German austerity, then cast also an eye toward North Korea, Zimbabwe and Iran for contrast.
One particular item of interest – failed states aren’t all bad, according to the magazine. They make for cheap and pliable partners for China when it comes to natural resources. We reported on this trend back in 2007 with our STEEP Report series, how China’s massive investment in infrastructure requires a broad range of partners, most of whom then become warmer to the rest of the Middle Kingdom’s strategic goals.
Click on the image for a map of China’s investments in natural resources.
Case in point: the radio program deals primarily with the multi-decade conflict between Keynesians, who believe that well-timed government spending can save flagging economies, and market fundamentalists who belief that the entire economy can be managed through tax cuts and manipulation of the interest rate. The Keynesians protest, “government spending led to winning World War II and got us out of the Depression!” Market fundamentalists tend to argue that the slump of the 1970s proved that it’s not a cure-all – and that only deregulation, tax cuts, and Greenspan’s masterful operation of the interest rates saved us from big government stagnation.