By Ian Fletcher
Author, ‘Free Trade Doesn’t Work: What Should Replace It and Why’
Many Americans are already concerned about China’s growing economic challenge to the United States. Indeed, the challenge itself is hardly news anymore. But a new book, Red Alert by Stephen Leeb, argues that Americans have radically misunderstood just what this challenge consists of.
Everyone who has “woken up” to the problem (i.e. not the administration, the U.S. Chamber of Commerce, or the Republican leadership) understands the threat posed by China’s cheap labor and low standards for everything from child labor to environmental protection. Most people who aren’t hopeless laissez-faire ideologues are twigging to the fact that China’s state-directed capitalism is running rings around America’s private-sector capitalism right now. But what few people realize is that China has an even more radical economic strategy up its sleeve, a strategy that aims not just to equal the United States but to surpass it and quite possibly shut America out of the economic future.
The basis of China’s strategy is the fact that the world is heading rapidly into the era of fundamental resource constraints.
Up until the present time in human history, although various natural resources have been scarce enough to fight over, no important natural resource have ever been scarce enough that humanity simply ran out of it.
This, the author argues, is going to change.
The interesting thing is that the resource in question isn’t the usual suspect: oil–though oil is certainly going to become prohibitively expensive as we hunt down the last few drops in harder-and-harder-to-reach places that require more-expensive drilling and extraction techniques for less return. It isn’t gas or coal, either, though these have similar futures.
(Any reader who believes these resources will last indefinitely can stop reading right here; those who are unsure should consult the persuasive analysis in the book itself.)
The resource, paradoxically, is every environmentalist’s dream: green energy.
Huh? How can the world run out of green energy? Isn’t that the whole point?
Oops. In our rush to green energy, we’ve forgotten something. Those pretty blue photovoltaic cells glinting in the sunlight don’t grow on trees. Neither do those magnificent 300-foot windmills or their smaller cousins.
They have to be made, and they are made out of some very scarce materials. (more…)