Globalization and American Hegemony

James Constant

A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. democracy  will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promisethe most benefits from the public treasury, with the result that  every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship.Attributed to Alexander Tytler (1747-1813)

        Supply side economics tells us that supply creates demand (Say's Law) so government must make it easy for producers to rev up production and hire workers who then will buy their products. Demand side economics tells us that demand creates supply (Keyne's Law) so government must make it easy for consumers to spend money inducing producers to make products for them. Republicans are supply siders and Democrats are demand siders. What is wrong with this picture? In one word, globalization.

        Global demand created American hegemony and now destroys it. As with the erstwhile empires of England, France, Holland and Portugal, America now faces the problem that it can no longer afford domestic production and increasingly depends on foreign production through debt. To survive, America's corporations turn overseas to sell excess domestic production. After WWII America was the sole global producer and global demand in the last part of the 20th century brought enormous wealth to these shores. That wealth was imprudently and democratically distributed. The rich got richer and the middle class and workers lived the American dream with money, houses, cars and other gadgets, while foreigners watched some in awe and others in contempt. America's wealth outspent the Soviet Union an d extended its reach to every corner of the earth because its global intake of wealth supported both guns and bread. This has now come to an end. America's global intake now exceeds its outflow.

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