ForaTV, in conjunction with the Australian Broadcasting Corporation, shares another terrific must watch presentation, this time by one of our favorite socioeconomic historians, Niall Ferguson, who in this lecture talks in depth, and with an objective perspective that only few can share, about empires on the verge of decline, emphasizing the precarious position the US has found itself in, now that China's ascendancy is undisputed, and only matched by the accelerating descent of the once great US nation. The fact that Ferguson is Paul Krugman's natural nemesis in all things only makes his insights all that more relevant (not to mention correct). And while the various chapters discuss such key concepts as the limits and implications of complexity theory, the ever increasing portion of US federal revenues attributed to interest payments (surpassing defense spending), China's military sustainability, the limits of Keynesian stimulus, investing in gold and hyperinflationary concerns, the primary highlight is Ferguson's discussion on what may be the primary topic of 2011: whether ot not debt will trigger the collapse of the US. To wit: "Sometime over the next decade the US will reach the crossover point at which it will be spending more on debt service, than it is able to spend on defense...The Chinese have noticed what the rest of the world's investors pretend not to see: that the US is on a completely unsustainable fiscal course with no apparent political means of self-correcting. Ladies and gentlemen, military retreat from the mountains of the Hindu Kush, or the plains of Mesopotamia has long been the harbinger of imperial fall." Recommended viewing.
From the official presentation:
Throughout history the rise and fall of empires isn't slow or cyclical, as we like to think, but arrhythmic...it mostly happens very, very suddenly. America is a superpower on the edge of chaos, according to economic historian and author Niall Ferguson. U.S. debt levels, he says, and its unwillingness to address the problem, has put it in the same category as other great empires which have collapsed throughout the ages.
Ferguson argues the world is changing. There's the rise of authoritarian China as a super-power; a Keynesian president leading a weakened United States; the re-emergence of democratic India as a great power; the continued decline of Japan; and the probability of continued global economic instability ahead.
Is the rise and fall of empires cyclical or arrhythmic? How does economic profligacy -- whether the result of arrogance or naivety -- contribute to the downfall of civilizations? Not to be missed, the address will offer a timely review of primacy, leadership, and the complex factors behind the rise and fall of great powers and civilizations.
The introuction, which incidentally is the weakest part of the hour long presentation, is below, with an indexed link to each section provided below.
01. Introduction 09 min 09 sec
02. Niall Ferguson Opening Remarks 01 min 40 sec
03. Historical Cycles of Empire Decline 07 min 07 sec
04. Complexity Theory 08 min 20 sec
05. Implications for the United States 06 min 22 sec
06. Interest Payments as a Share of US Revenue 01 min 56 sec
07. Failure of Perception 02 min 43 sec
08. Debt Payment Overtaking Defense Spending 06 min 58 sec
09. Q1: Healthcare Reform 04 min 10 sec
10. Q2: China's Military Sustainability 02 min 38 sec
11. Q3: Gold Investing 01 min 24 sec
12. Q4: Political Stability of China 02 min 42 sec
13. Q5: Children Teaching You About Debt / Radical Islam 03 min 57 sec
14. Q6: Advice to Obama 02 min 40 sec
15. Q7: Limits of Keynesian Stimulus 03 min 46 sec
16. Q8: Better Leadership in the West 03 min 27 sec
17. Q9: Fear of Hyperinflation 05 min 09 sec