This is a strange title, but I think you will understand why I am using it in this blog.
I like to look at history and economics in the Big Picture" where there are no holes bared and all is on the table, but this is not exactly a poker table. It is the plan or strategy for you and me and the USA to be able to enjoy the best quality of life in human history. If that is not a big goal, I don't know what is. There are several big players, or countries who are trying to play this game, but I am going to pick just three. The USA, China and India. There are some other players who are doing their thing, but these are the key ones.
If the objective is to enjoy the best quality of life, exactly what does that mean? It has to be clear that a country can not even start to think about quality of life if they are dirt poor. That means economics and wealth. If the players start off with their table stakes in front of them, the next question has to be where do they place their bets? Here is where it get interesting because none of the players have unlimited money to play. If they had that much, why would they even want to play? Let's start breaking this down.
If there was a way to get all the players in one country to produce the maximum wealth that they could and the players were all equal, the game would be won by the team with the most players or population. That brings up another problem and that is it is not how big the pot is, but how much each player shares in that pot. We are talking about the best quality of life on a per capita basis or the average or median player. This means that the size of the population may or may not be an advantage. Getting interesting isn't it?
Now let's look at each player country and see how they are doing and if they are using the same basic strategy. First off, take India. Here is their strategy. They start off with a large population and a very dense population. They have limited natural resources compared to the size of their population so the export of raw materials is out of the question. They have so many people that they need to import food. On the basis above, it is clear that India is a very poor country, so what can they do? They have to get their wealth from some place else. There are a couple of ways to do that and one is to produce something and sell it to someone else for a profit. Remember the industrial revolution in Europe a few hundred years ago? They were able to pull that off because of the discovery of the potato that allowed fewer people to produce enough food so that the extra people could work in factories, plus the discovery of the New World, they had a lot of customers who were unable to produce those same goods. I see that as a "one time deal" that would be difficult to reproduce. Back to India.
What if India could send agents to other countries where they could produce something of value and then send a share of their earnings back to India? This might work, except why would anyone want to allow India's agents to come into their country and then send wealth back to India? One way would be that these agents were not regular citizens like the people who are immigrating over the Southern border of the USA. How could India make them special? How about specialized education? Remember that with limited wealth resources that they could not afford to educate any citizen who would want. What should they do? Select those few who have the intellect to learn the skills that would allow these agents to immigrate to places like the USA. How about those who do not qualify? Sorry about that, India is going "Place Their Bet" on these special people and let the other deal for themselves. Isn't that what India has done? They bet on the fastest horse rather than bet on "all" the horses. Now, the biggest source of revenue for India is remittances. Their bets seems to have worked.
How about China? They look a lot like India so why are they not following the same plan? Rather than sending their agents abroad to replace local workers and send remittances back to China, they have taken a different strategy. China realized that if they let their population keep growing as India had done that they would have to use most their people just to produce food and thus they would have no workers available to execute India's strategy or that of Europe back in its industrial hay day. China told it citizens that they could only have "one" child. This meant that soon they would have a smaller population to feed and have extra people to manufacture things for export. Like India, China also bet their wealth on only those few who had the intellectual potential to become technically superior. Unlike India who sent their agents to the USA to collect wealth and send it back home, China had an excess of workers who could build product in China and then sell then in the USA. With an excess of cheap labor China could under price products knowing that the USA would purchase their product even if it was on one penny less in price. China also knew that much of the wealth in the USA was the result of the exploitation of things like coal and China could buy that same coal from the USA and smelt steel cheaper back in China and then sell it back too the USA and it worked.
Where does this leave the USA? Rather than bet on winners, the USA distributed their wealth on a more equal basis where everyone got an equal share. The USA went so far as to invest more in those with the least potential than those with the most potential. The USA was more interested in being "fair" than winning the game. Like grass growing, this process proceeded at a snail's pace and few even noticed the growth in the national debit. Most people in the USA had never had it so good, being able to buy products made in China on Amazon and having them arrive in two days while a kid from India made sure that their internet was working at top speed. Rather than spend almost 2 trillion dollars on producing the best educated workforce in the world the USA allowed anyone who wanted to spend 6 or 7 years in college enjoying the good life earning a worthless degree when they could have earned a worth while degree in STEM in 4 years.
This is getting far too long. The bottom line is that the USA has been stiffed by both India and China and we only have ourselves to blame. It happened mostly on our watch and we all should have seen it coming miles away. I don't know about you, but I don't see a way out of this hole for the USA. We have dug far too deep for far too long. If we were to immigrate, where would it be too and could we even compete? Don't answer that last question!
